Friday, September 19: Today in Gold and Silver

NEW YORK ( TheStreet) -- Not surprisingly the HFT boyz and their algorithms were busy right from the moment that trading began in New York at 6 p.m. on Wednesday evening, taking gold down another few bucks.  The price recovered from there---and then traded flat until at, or just after, the noon London silver fix on their Thursday morning.  At that point the boyz showed up again and took gold down to a new low for this move down about five minutes before the 8:20 a.m. Comex open.  Gold rallied off that low---and then got cut off at the knees again at, or shortly after the 10 a.m. EDT London p.m. gold fix.  It then traded flat for the remainder of the Thursday session.

The CME Group recorded the low and high ticks as $1,216.30 and $1,228.70 in the December contract.

Gold closed in New York yesterday at $1,224.80 spot, up $1,60 on the day.  Net volume was very decent at 145,000 contracts.

Brad Robertson sent us the 5-minute tick chart for gold----and you can see that more that 90 percent of the volume occurred during the down-up move between the London silver fix and 10:40 a.m. EDT.  Add two hours for New York time.

Silver was subject to the same treatment, so I'll spare you the play-by-play, as the chart pattern was almost a carbon copy of gold's.

JPMorgan et al put the lumber to platinum and palladium as well---and also during the same time period---and they both closed at new lows for this move down as well.  Here are the charts.

The dollar index closed late on Wednesday afternoon in New York at 84.73---and then rallied to its 84.81 high at 8 a.m. Hong Kong time on their Thursday morning.  From there the index slid lower for the remainder of the Thursday trading session---and closed at 84.29---down 44 basis points on the day, giving up a large portion of its gain from the Fed news on Wednesday.

You will carefully note, dear reader, that none of the precious metals gained anything back on Thursday that they lost during the "sell precious metals/buy the dollar index" rampage that went on, on Wednesday.  It never works like that, or rather, it's not allowed to work like that.

The gold stocks opened lower and moved lower until they rallied a bit along with gold once the London p.m. 'fix' was in.  Despite the fact that the gold price traded flat from there, the stocks continued to weaken---and the late-day rally that started minutes before 2 p.m. EDT also sold off a bit into the close as the HUI finished down another 1.32 percent.

The silver equities began the same way as gold, but there was no late-day rally to save them, as Nick Laird's Intraday Silver Sentiment Index closed down another 2.27%.

The CME Daily Delivery Report showed that zero gold and only 6 silver contracts were posted for delivery within the Comex-approved depositories on Monday.  Nothing to see here.

The CME Preliminary Report for the Thursday trading session showed that there are 24 gold and 379 silver contracts still open in the September delivery month---minus the contracts mentioned in the previous paragraph.

There were no reported changes in GLD yesterday---and as of 9:38 p.m. EDT yesterday evening, there were no reported changes in SLV, either.

The U.S. Mint had another tiny sales report.  They sold 1,500 troy ounces of gold eagles---and that was all.

There were no reported deposits in either gold or silver over at the Comex-approved depositories on Wednesday.  There was a 4,212 troy ounce withdrawal in gold---and 244,249 withdrawn in silver.

In keeping with my schedule in San Antonio, I've kept the number of stories down the bare minimum once again.

¤ The Wrap

This was the real lesson of the 2011 price run – unlike 1980, silver ran to $50 without a big buyer, just as it will likely be on the next big move up. The actions taken in 2011 to smash the price – two $15 declines in a week or less – because they were so in your face, will be hard to replicate in light of how accepted the manipulation premise has become. So many more observers are aware of the silver manipulation today that the actions of 2011 will not be easily replicated. But if you think such outrageous efforts to smash the price will succeed, then the solution is simple – sell at $50.

I don’t think corrupt government and exchange officials will turn back silver at $50 the next time it gets there; leaving only one resolution, namely, that the price must burn itself out to the upside. Here’s how the price of silver will truly explode – with no artificial exchange interference, all the buying from both investors and industrial users must be satisfied by actual selling or because the price gets too high to consider buying. In that case, almost by definition, the price must go a lot higher than $50. - Silver analyst Ted Butler: 17 September 2014

Well, dear reader, it was another day of engineered price declines across the board in all four precious metals---with all of them occurring during the same time frame, which is hardly indicative of a free market.  Here are the 6-month charts for all four precious metals, so you can see the salami slicing both on Thursday and Wednesday.

The other interesting aspect of Thursday's new lows was the fact that da boyz didn't have the fig leaf of a skyrocketing dollar index to hide behind.  This time they had to do the dirty with the dollar heading down to a 44 basis point loss on the day vs. the 66 basis point rally it had on Wednesday.  Pinning the rise and fall of the precious metals on what's going on with the dollar index is such bulls hit---but we hear it a lot.

Just like yesterday, I'm filing early again---and as I write this paragraph, it's 12:30 p.m. Hong Kong time---and the London open is still two and a half hours away.  The gold price got sold down five bucks or so in early morning trading in the Far East, but then rallied back above unchanged by noon in Hong Kong---and has now been sold back down to unchanged.  It was the same in silver, but it's now about a nickel below its Thursday closing price in New York.  Platinum and palladium aren't doing much.  Gold volume is already north of 26,000 contracts, which is monstrous for this time of day---and silver's volume is already at 4,200 contracts, which is more than double what it was this time yesterday.  The dollar index isn't doing a thing.

Today we get the Commitment of Traders Report for positions held at the close of Comex trading on Tuesday---and Ted and I are hoping for a more impressive set of numbers than we got in last Friday's report.  It's too bad that Wednesday and Thursday price action won't be included, as both days set new lows yet again for this move down in all four precious metals---and on big volume as well.  But whatever the numbers are, I'll have them for you tomorrow.

And as I sent this off into cyberspace at 2:14 a.m. EDT, I see that the gold price is jumping around a bit, silver is down---and platinum and palladium still aren't doing much.  Gold volume is now over 40,000 contracts, an astounding number for this time of day---and silver's volume is north 6,000 contracts, a pretty big number as well. The dollar index is up a handful of contracts.

That's all I have for today.  Since today is Friday, I shan't hazard a guess as to how the trading action will go for the remainder of the day, but nothing will surprise me, nor should it you.

Have a good weekend, or what's left of it if you live west of the International Date Line---and I'll see here tomorrow.

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