Wednesday, September 10: Today in Gold and Silver

NEW YORK ( TheStreet) -- It was a very quiet day on Tuesday with not much happening during Far East and London trading session.  That all changed starting at 11:40 a.m. EDT when the HFT boyz showed up with their algorithms---and it appeared that a new low for this move down was set at, or very close to, the 1:30 p.m. Comex close.  From there it rallied a few bucks before rallying anew starting around 3:15 p.m.  A thoughtful non-for-profit seller put a pin in that rally balloon a few minutes after 4 p.m.---and  the price didn't do much after that.

The high and low ticks were reported by the CME Group as $1,258.90 and $1,248.10 in the December contract.

Gold finished the Tuesday trading session in New York at $1,255.80 spot, up 30 cents from Monday's close.  Net volume was around 113,000 contracts.

Here's the New York Spot Gold [Bid] chart on its own so you can see the finer details of the Comex and electronic markets in New York yesterday.

Brad Robertson sent us the 5-minute gold tick chart---and you can see the associated volume that went with the price action.  Remember to add 2 hours for EDT.

After the obligatory down tick at the open on Monday night in New York, the silver price made quite a few attempts to break above its Monday closing price in New York, but didn't quite make it.  Once Comex trading began however, there was some price pressure---and 'da boyz' printed a new silver low as well for this move down shortly after 12 o'clock noon in New York.  After that, it traded almost the same as gold, including the nifty rally that began at 3:15 p.m. EDT---which also got cut off a the knees minutes after 4 p.m. by a willing seller.

The low and high ticks were reported as $18.89 and $19.155 in the December contract.

Silver finished the Monday trading session at $19.055 spot, up 3.5 cents from Monday.  Net volume was 30,500 contracts.

And here's the New York Spot Silver [Bid] chart.

Platinum and palladium weren't spared by the HFT algorithm yesterday, either.  Platinum, which is now hugely oversold, was closed down 12 bucks, but well off its low tick.

Palladium really got it in the neck yesterday starting at the London p.m. gold fix---and by 12:15 p.m. EDT, most of the damage had been done---and 'da boyz' closed it down by 24 bucks.  It was a dollar or so lower than that on the day as well.

The dollar index closed late on Monday afternoon in New York at 80.30.  From there it chopped to its 84.56 high, which occurred at precisely 9:00 a.m. BST in London on their Tuesday morning.  Then it drifted unsteadily lower, closing at 84.17, which was down 13 basis points on the day---and 39 points off its high tick.

The gold stocks rallied slightly into positive territory at the open---and then slowly began to sink back into the red, hitting their lows just before the 3:15 p.m. EDT rally began in both gold and silver.  They popped back into positive territory in no time---and the HUI closed up 1.48%.

The silver equities followed a similar path, except their time in positive territory didn't last long---and they got sold down much harder than the gold shares.  They were down by almost 3 percent at their 3:15 p.m. EDT low---and the subsequent rally in Nick Laird's Intraday Silver Sentiment Index cut the loss to only 0.86%.

The CME Daily Delivery Report showed that zero gold and 227 silver contracts were posted for delivery within the Comex-approved depositories on Thursday.  In silver, the two largest short/issuers were ABN Amro and R.J. O'Brien with 138 and 77 contracts respectively.  There were 11 different long/stoppers. The link to yesterday's Issuers and Stoppers Report is here---and it's certainly worth a quick look.

The CME Preliminary Report for the Tuesday trading session shows that there are still 24 gold contracts left open in the September delivery month, which is unchanged from Monday's report.  But the number of silver contracts left open in September rose by 90 yesterday, so there are now 977 contracts left to deliver in September---from which you can subtract the 227 contracts mentioned in the prior paragraph.

There were no reported changes in GLD yesterday---and as of 9:40 p.m. EDT yesterday evening, there were no reported changes in SLV, either.  But when I was editing today's efforts at 3:55 a.m. EDT, I was shocked to see that there was another addition to SLV.  This time it was 1,438,770 troy ounces.  Was this deposited to cover an existing JPMorgan short position?  Since the beginning of the month, 3.12 million ounces of silver have been added to SLV---and 9.7 million troy ounces were added in August---and since August 1, silver prices have been engineered lower to the tune of almost two bucks.  During the same time period, GLD has shed about 320,000 troy ounces.

We should get the new short positions for both GLD and SLV this evening sometime---and that will be up until the end of August.  The 3.12 million ounces added so far this month, won't show up in shortsqueeze.com's numbers until almost the end of September.

There was another sales report from the U.S. Mint.  The sold 1,000 troy ounces of gold eagles---500 one-ounce 24K gold buffaloes---200,000 silver eagles---and 100 platinum eagles.

Once again there was big movement at the Comex-approved depositories on Monday.  In gold, nothing was reported received, but 56,748 troy ounces were shipped out, with most of it coming out of Scotiabank's vault.  The link to that activity is here.

In silver, there was 601,494 troy ounces received---and 1,222,262 troy ounces shipped out the door.  All the activity was at the CNT Depository---and Brink's, Inc.  The link to that action is here.

Happily, I don't have all that many stories for you today---and that suits me just fine.  You as well, I would assume.

¤ The Wrap

Let me take another shot at trying to highlight why this COMEX physical turnover, unique to silver among all commodities, has captured my attention. There are six COMEX-approved silver warehouses---four in the vicinity of New York City and two not that far away in Delaware and Massachusetts. There is not a lot of silver mining or smelting occurring in this narrow area of the Northeastern US, although this is clearly a hub for distribution and transportation. This year some 900,000 oz of silver on average have moved into or out from these six warehouses on a daily basis.

Converting world annual silver mine production to the same five day work week as COMEX inventories are reported (800 million oz divided by 250 days), the daily world mine production of silver comes to 3.2 million oz each business day. The daily average movement of silver into and out from the COMEX silver warehouses at 900,000 oz is equal to 28% of total world daily mine production, even though the world mines and refines silver in areas far from the narrow area where the COMEX silver warehouses are located. - Silver analyst Ted Butler: 06 September 2014

[And as an aside to what Ted say above, it's a very good bet that just about every good delivery bar that's been received or shipped out of these six Comex-approved depositories during the last three years or so, has some pretty awesome 'frequent flyer' points attached to them. - Ed]

I don't have much to add to my prior comments about any of the four precious metals, as JPMorgan et al took all four of them to new lows yesterday in these ongoing engineered price declines.

Here are the 6-month charts for all four metals.

Are we done to the downside?  Beats the hell out of me.  JPMorgan et al along with their HFT buddies can do anything they want.  But there are limits to how low these prices can be driven---and as Ted Butler said in his Saturday column---and again on the phone yesterday---if we're not there already, we aren't far off.  I'm sure he'll have more to say about this to his paying subscribers in his mid-week commentary later today.

And as I write this paragraph, the London open is less than 15 minutes away---and prices did absolute nothing in Far East trading on their Wednesday.  Of course silver had it's obligatory down spike at the 6 p.m. open in New York on Tuesday evening---and it's still down as of this writing.  Net gold volume is around 15,000 contracts---and silver' net volume is 4,500 contracts.  The dollar index is basically unchanged.

As I said in The Wrap yesterday, I was kind of hoping that JPMorgan et al would get this over with on Tuesday, as I would like all the data in Friday's Commitment of Traders Report, as yesterday at the close of Comex trading was the cut-off for that report.  And whether it was the bottom or not, there's an excellent chance that all of it should be reported in a timely manner.

And as I send this off to Stowe, Vermont at 5:20 a.m. EDT, I note that all four precious metals are being guided lower---and are below yesterday's closing prices in New York---and palladium is once again at a new low for this move down.  It wouldn't surprise me in the slightest if 'da boyz' had the other three precious metals at new lows before the trading day is done in New York today.  Gold's net volume is now 25,000 contracts---and silver's volume is up to 6,500 contracts net.  The dollar index is still up a tiny amount.

Based on what I see here, nothing will surprise me from a price perspective when I check out the Kitco charts after I fire up my computer later this morning.

And before heading out the door, I'd like to point out that the Casey OnePass has been opened for a very brief period of time.  You have until this Friday to sign up to save $1,749 on the full subscription package.

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I'm off to bed.  See you here tomorrow.

This is an abbreviated version of Ed Steer's Gold & Silver DailySign-up to have to the complete market review delivered to your email inbox each morning for free.

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