Thursday, September 18: Today in Gold and Silver

NEW YORK ( TheStreet) -- The gold price didn't do much during most of the Wednesday trading session.  But that all changed at precisely 2 p.m. EDT when Janet spoke---and that was that.  The initial down spike at that time didn't amount to much, but about forty minutes later the HFT boyz put in an appearance and quickly had gold down to a new low.  The sell-off ended at precisely 4 p.m. EDT---and from there it traded sideways into the 5:15 p.m. close of electronic trading.

The high and low ticks were recorded by the CME Group as $1,240.50 and $1,222.00 in the December contract.

Gold finished the Wednesday session at $1,223.20 spot, down $11.70 from Tuesday's close.  Net volume was 125,000 contracts with a big chunk of that occurring between 2 and 4 p.m. in New York.

Here's the New York Spot Gold [Bid] chart on its own, so you can see the Comex trading in more detail.

Brad Robertson sent along the 5-minute tick gold chart---and you can see the big volume on the engineered price decline.  Don't forget to add two hours for EDT.

The silver chart was very similar except for a brief [and capped] rally at the Comex open.  Then it traded sideways until 2 p.m.---and you already know the rest.

The high and low in silver yesterday were recorded as $18.80 and $18.49---however, it wasn't a new low for silver, as that would be tough to do, as the metal is basically sold out to the downside.

Silver closed on Wednesday at $18.52 spot, down 16.5 cents from Tuesday.  Net volume was 32,500 contracts.

And here's the New York Spot Silver [Bid] chart---and for the most part, it looks similar to gold's.

Platinum hit its high of the day about half an hour before Zurich opened---and it was all down hill to its 4:30 p.m. EDT low.  It recovered a few bucks into the close---and it, too, hit a new low for this move, down 13 bucks on the day.

Palladium hit its high just before lunch in Zurich---and it, like platinum, got sold down as well, closing almost on its low, down an even ten bucks---but nowhere near a new low.

The dollar index closed late on Tuesday afternoon in New York at 84.07---and traded basically flat until a few minutes before Yellen opened her mouth at 2 p.m.  The dollar rallied---and then retreated but, once again, it looked like the HFT boyz spun their algorithms---and away went the dollar to the upside.  I'm sure there was a certain amount of short covering involved, but it didn't start by itself.  The dollar index closed at 84.73---up 66 basis points on the day---and massively in overbought territory.

And here's the 3-year dollar index to put what's currently happening in some sort of historical perspective.

The gold stocks traded a tad lower for most of the New York session yesterday, but after the initial sell-off at 2 p.m. EDT, they had the audacity to rally into positive territory before the HFT boyz and their algorithms showed up---and it was all over, except for the crying, as the HUI closed down 2.45%.

The silver stocks followed an identical pattern, but Nick Laird's Intraday Silver Sentiment Index closed down 'only' 1.88%.

The CME Daily Delivery Report showed that only 1 gold and 9 silver contracts were posted for delivery within the Comex-approved depositories on Friday.

The CME Preliminary Report for the Wednesday trading session showed that there are 28 gold contracts still open in September, down 4 contracts from yesterday's report.  In silver, there are 389 contracts still open, after 233 contracts were subtracted for the deliveries posted for today.

There were no reported changes in GLD yesterday but, once again, there was another big deposit into SLV.  This time an authorized participant added 959,072 troy ounces of the stuff.

The good folks over at Switzerland's Zürcher Kantonalbank updated their website with the latest activity in their gold and silver ETFs---and they're still going down.  As of the week ending last Friday, their gold ETF shed another 7,507 troy ounces---and their silver ETF dropped by 99,636 troy ounces. 

There was a tiny report from the U.S. Mint yesterday. They sold 3,000 troy ounces of gold eagles---and that was all.

There was no in/out movement in gold over at the Comex-approved depositories on Tuesday.  However, silver more than made up for it as 591,510 troy ounces were received---and an eye-watering 2,447,550 troy ounces were shipped out.  The deposit was at CNT---and 90 percent of the withdrawal was from Brink's, Inc.  The link to that action is here

The in/out movement in Comex silver, along with the continued deposits into SLV are simply stunning---and it's for good reason that Ted Butler can't figure out why more people aren't talking about it, as this is big news.

While on that subject, here's a timely chart that Nick Laird slid into my in-box yesterday.  It shows the total weekly silver holdings of all transparent silver ETFs---and the big increase in the last couple of months [to a new all-time high] is all because of the silver pouring into SLV.

I have less stories today, but I hope you find the odd one of interest.

¤ The Wrap

Almost eerily, the exact same cause (insufficient physical supply) resulted in the silver price run to $50 in 2011. Unlike what occurred in 1980, there was no coordinated manipulative buying in the price run in 2011; only broad-based investor buying, particularly in the publicly traded silver Exchange Traded Funds (ETFs), like SLV. If the crooks at the CFTC and CME had been able to pin the 2011 silver run to futures speculators manipulating the price upward, they would have taken that action by now. The reality is that there was no Hunt-like culprit to blame for the 2011 price run, so the actions taken by the regulators to cause prices to crash were strictly to bail out silver short sellers, particularly JPMorgan; just like occurred in 1980. - Silver analyst Ted Butler: 17 September 2014

I'd forgotten all about the FOMC meeting, so I was shocked when I first say the swan dive in gold and silver once I'd checked into the hotel in San Antonio.  But once I discovered the reason, all became clear.  It was just JPMorgan et al using this opportunity to kick the crap out of these two metals once again, especially if they could set new lows in the process, which they proceeded to do in both gold and platinum.

Here are the 6-month charts for all four precious metals as of yesterday's close.

It's not even lunchtime in Hong Kong as I check on trading in the Far East---and it should have come as no shock to anyone that the HFT boyz and their algorithms were standing at the ready when trading began at 6 p.m. EDT in New York yesterday evening.  All four precious metals got smacked---and both gold and platinum set new lows for this move down.

Not surprisingly, volumes in gold and silver are very decent as well---15,000 in gold and 4,000 in silver, which is very high for this time of day.  Of course I'm sure that the technical funds/managed money were pitching longs and going short in all four precious metals, with JPMorgan et al gobbling up the opposite side of those trades.  The dollar index is down 9 basis points as of 11:15 a.m. Hong Kong time.

I'm off to bed, as it's been a very long day---and after yesterday's surprise, nothing will faze me when I check the charts this morning.

See you tomorrow.

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