Tuesday, September 23: Today in Gold and Silver

NEW YORK ( TheStreet) -- The gold price rallied a hair in Far East trading on their Monday morning, but that all ended at 9 a.m. Hong Kong time as the HFT boyz and their algorithms took an eight or nine dollar slice off the golden salami.  After that, the price didn't do much until shortly after 11 a.m. EDT---and the rally that began at that time got dealt with in the usual manner at one minute before noon, before it got too far into positive territory---and it wasn't allowed to close there.

The low and high tick were reported as $1,208.80 and $1,221.00 in the December contract.

Gold closed in New York on Monday at $1,214.80 spot, down $1.40 from Friday's close.  Net volume was 131,000 contracts.

Silver opened flat on Monday morning in the Far East but, like gold, the HFT traders and their algorithms showed up at 9 a.m. Hong Kong time as well---and within an hour had silver down over 50 cents.  From there it rallied in fits and starts back to just above unchanged by noon in New York---and at that time met the same fate as the gold price---getting closed down on the day.

The low and highs were reported by the CME Group as $17.865 and $17.325 in the December contract.

Silver finished the trading session on Monday at $17.73 spot, down 6 cents from Friday's close.  Net volume was a stunning 74,000 contracts.

Platinum and palladium had charts very similar to the gold charts, but mini versions---and both metals, like gold and silver, were closed at a new low for this move down. Platinum was closed down 12 bucks---and palladium was closed down 9 bucks, but was briefly below $800 during the day.  Here are the charts.

The dollar index close late on Friday afternoon in New York at 84.78---and then climbed to its 85.85 'high' tick of the day around 11:20 a.m. EDT.  From there it slid lower---and closed at 84.70, which was down 8 basis points from Friday.

The gold stocks gapped down---and then stayed down for the remainder of the day, except for a small rally around noon when gold rallied as well.  Even though gold made it into positive territory for a bit---and only closed down a dollar or so, the HUI closed down another 2.89%.

The silver equities headed for the basement the moment that trading began in New York.  The noon rally didn't last---and the stocks continued lower---and Nick Laird's Intraday Silver Sentiment Index closed down a chunky 3.64%.

The CME Daily Delivery Report showed that zero gold and 220 silver contracts were posted for delivery on Wednesday.  The biggest short/issuer was Jefferies by far with 188 contracts.  There were about 10 long/stoppers, none which really stood out---and the link to yesterday's Issuers and Stoppers Report is  here if you wish to check it out.

The CME Preliminary Report for the Monday trading session showed that there are 16 gold and 387 silver contracts still open in September, from which you can subtract the 220 silver contracts in the prior paragraph.

There was 57,698 troy ounces of gold withdrawn from GLD yesterday---but it was totally different over at SLV, as there was another monster deposit.  This time there was 2,397,570 troy ounces were added by an authorized participant.

I forgot all about Joshua Gibbons, the " Guru of the SLV Bar List" while was in San Antonio, so I'll make amends here.  As of the close of trading last Wednesday, this is what he had to say: " Analysis of the 17 September 2014 bar list, and comparison to the previous week's list---4,844,010.2 troy ounces were added (all to Brinks London). No bars were removed or had a serial number change.

The bars added were from: Solar Applied Materials (2.8M oz), Henan Yuguang (1.4M oz), Nordeutsche (0.3M oz), and 4 others.  As of the time that the bar list was produced, it was over-allocated 594.3 oz.  All daily changes are reflected on the bar list, except the 959,072.0 oz deposit last night (17 September 2014).

About 2.5M oz of the deposits were bars that had been in SLV before, with another 2.3M oz of fresh bars."

There was a decent sales report from the U.S. Mint.  They sold 3,700 troy ounces of gold eagles---500 one-ounce 24K gold buffaloes---660,000 silver eagles---and 100 platinum eagles. 

There wasn't much activity in gold at the Comex-approved depositories on Friday, as only 3,407 troy ounces were shipped out---and nothing was reported received. 

The silver activity was off the charts once again, as 2,656,293 troy ounces were reported received, with all the action at Brink's, Inc.--- CNT---and Canada's Scotiabank.  Only 165,152 troy ounces were shipped out.  The link to that activity is  here---and it's worth a look.

Nick Laird sent us this chart on the weekend.  It's the weekly deliveries from the Shanghai Gold Exchange right up until September 12, 2014---and as you can tell, the chart is doing what it's supposed to, moving from lower left to upper right.

I've kept the stories down to as few as possible, but there's still a lot.  The final edit is yours.

¤ The Wrap

Certainly, the signals in silver from everywhere I look are much different than the prices being set on the COMEX . Despite the pronounced price weakness, investment holdings in the big silver ETF, SLV, have grown and not shrunk, both on an absolute basis and relative to the big gold ETF, GLD.  Even though the price of silver has gone down---and has gone down relative to gold’s price, there are no indications of investment selling of physical silver, only indications of buying.  

There is no compatibility between price action and the holdings in the two largest public investment vehicles in silver and gold. One would appear to be wrong, either the collective behavior of silver and gold investors when it comes to physical metal holdings or the price-setting mechanism on the COMEX . This is a disconnect that demands an eventual re-connection. The easiest re-connection must involve a radical change in the price of silver and not a change in collective investment behavior. The price of silver is wrong, not public reaction to a price thought too cheap. - Silver analyst Ted Butler: 20 September 2014

Another slice out of the salami in all four precious metal yesterday, particularly in silver, as all hit new lows for this move down.  And as you already know, da boyz are after silver in a big way, as it's the problem child for both JPMorgan and Canada's Scotia bank.  I would guess that between them, they hold a bit over half of the entire short position of the 'Big 8' traders in the Commercial category of the Commitment of Traders Report.

Here are the 6-month charts for all four precious metals.  Platinum is most likely at its most oversold position in many years---and that goes for the other three precious metals as well.

And as I write this paragraph, the London open is 15 minutes away.  With the exception of silver, the other three precious metals are all up a tiny amount on the day.  Gold volume is a bit over 15,000 contracts, which isn't overly heavy---but silver's volume is very brisk at 7,700 contracts.  The dollar index is flat.

Today is the cut-off for this Friday's Commitment of Traders Report---and I would guess that we'll see new records pretty much across the board in gold and silver---and close to records in platinum and palladium as well.  Of course that depends on today's price action, so we'll see how things turn out as the trading day progresses, particularly in New York.

And as I fire this out the door to Stowe, Vermont at 5:00 a.m. EDT, I see that the prices of all four precious metals went vertical shortly after 9 a.m. BST in what had all the hallmarks of a 'no ask' market---and it remains to be seen how long JPMorgan et al allow these rallies to last.  Judging by the volumes in both gold and silver at the moment, they are hard at work as sellers of last resort.  Right now [4:50 a.m. EDT] net gold volume has exploded to a bit over 35,000 contracts---and silver's net volume is 14,000 contracts.  So unless a black swan of some type shows up, it's a pretty good bet that these rallies will meet the same fate as every other rally.

Here are the gold and silver charts as of 4:45 a.m. EDT---9:45 a.m. BST in London.

I'm back home in Edmonton now that the Casey conference is done.  I was amazed at the quality of not only the speakers, but also the calibre of the attendees.  After talking with many---and I'm happy to report that the "can do" spirit is still very much alive in America.  I was delighted to meet so many readers while I was there---and I was humbled by their kind words.  So a profound "thank you" hardly seems adequate.

After flying for a good chunk of Monday, I must admit that I'm a pretty tired puppy.

I'm off to bed---and after watching the early morning action in London, nothing will surprise me when I power up my computer later this morning.

See you tomorrow.

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