Thursday, September 25: Today in Gold and Silver

NEW YORK ( TheStreet) -- The gold price didn't do a lot during the Wednesday trading session---and the high, if you wish to dignify it with that name, appeared to come shortly after the London open.  The 'low' came around 11:30 a.m. EDT---and the price didn't do much after that.

The high and low ticks are barely worth the effort of looking up, but they were reported as $1,226.70 and $1,216.20 in the December contract.

Gold ended the Wednesday session in New York at $1,216.60 spot, down $6.30 from Tuesday's close.  Net volume checked in at around 123,000 contracts.

The silver price didn't have much direction yesterday.  The 'high' came about forty minutes before London opened---and the 'low' was at the 3 p.m. BST London p.m. golf fix---and the subsequent 'rally' didn't get far.

The CME Group reported the high and low ticks as $17.87 and $17.51 in the December contract, which is the current front month---and the next big delivery month.  It's the same for gold as well.

Silver closed on Wednesday at $17.675 spot, down 10.5 cents from yesterday---and net volume was very brisk at 47,000 contracts.

Platinum rallied up until shortly after Zurich opened---and that was pretty much it for the day, as that white metal got closed virtually on its low tick of the day---as da boyz took a $12 gain and turned it into a $12 loss.

Palladium's high tick, which came at the same moment as platinum's high tick, had that metal up ten bucks.  But JPMorgan et al showed up once again---and the gain ended up being only two dollars by the end of the Wednesday session in New York.

The dollar index closed late yesterday afternoon EDT at 84.70---and then didn't do much until just before noon in London.  At that point a rally began that topped out at the 85.07 mark.  It fell back to 84.95 by 11:00 a.m. EDT---and then rallied weakly, closing the Wednesday session at 85.06---up another 36 basis points.

The dollar index is up 6.5 percent since July 1.

Here's the 3-year dollar index chart once again to put this current rally in some sort of historical perspective.

The gold stocks opened in the red, but by just after 10:30 a.m. EDT were back in the black.  That lasted for less than twenty minutes---and they never got a sniff of positive territory after that.  The HUI finished down 1.21%---erasing half of Wednesday's gain.

The silver stocks were down 2 percent by shortly after 10 a.m. EDT---and the subsequent rally only got a whiff of unchanged before it got sold down once again.  The absolute low came at 2:30 p.m. in New York---and they rallied a bit into the close, as Nick Laird's Intraday Silver Sentiment Index closed down 1.74%.

The CME Daily Delivery Report showed that zero gold and 10 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 just 13 gold and 70 silver contracts left open in the September contract.

There were no reported changes in GLD yesterday, but that can hardly be said about SLV, as another 2,397,420 troy ounces of silver were reported deposited by an authorized participant.

When I typed the above number, it seems strangely familiar, so I checked the deposit of about that size that was made into SLV on Tuesday---and that worked out to 2,397,570 troy ounces, so I'm wondering out loud if there was an error of some kind, such as double counting.  I'll find out today---and then report on this tomorrow, so stay tuned.

The good folks over at the Internet site updated their website with the short positions in both SLV and GLD as of the close of trading on September 15.

In SLV, the short position declined from 14,299,000 shares/troy ounces down to 13,729,200 troy ounces, a decrease of only 570,000 shares/troy ounces, or 3.98%.  During the reporting period, a hair over 8.0 million troy ounces of silver was deposited, so it's obvious that the remaining short position in SLV is of the 'plain vanilla' type---and JPMorgan, along with any other authorized participant, are no longer short the metal in SLV---and 'value investors' have been depositing the metal and taking shares in lieu of the physical, which is a rather strange way to do things.

GLD went the other way, as the short position increased from 1,339,090 troy ounces up to 1,551,990 troy ounces, an increase of 212,900 ounces, or 15.90%.  This sounds like a lot, but in the grand scheme of things it really isn't---and all of it would of the 'plain vanilla' variety as well.  In some respects I'm surprised it was as low as that considering the price action in gold during the reporting period.

The folks over at Switzerland's Zürcher Kantonalbank updated their website with the current data from both their gold and silver ETFs for the week ending on Sept 19.  Once again both ETFs declined during the reporting week, as their gold ETF sold off 31,200 troy ounces---and their silver ETF was lower by 132,814 troy ounces.

There was another sales report from the U.S. Mint yesterday.  They sold 2,500 troy ounces of gold eagles---500 one-ounce 24K gold buffaloes---and 35,000 silver eagles.

There was no gold deposited over at the Comex-approved depositories on Tuesday, but 35,497 troy ounces were shipped out.  Virtually all of it came out of Canada's Scotiabank---and the link to that activity is here.

And, for a change, there was virtually no action in silver, as nothing was reported received---and a tiny 17,443 troy ounces were shipped out.

I have the usual number of stories for a mid-week column---and here's hoping that you'll find the odd one that interests you.

¤ The Wrap

Technical funds are speculators (and so are commercials in reality). The quantities of contracts being sold short by the technical funds are so massive that those quantities can’t help but crush prices. This is what should be focused on and is shockingly clear in the dominant pattern of increasing technical fund short sales over the past two years.

Take the current decline in silver prices to new four year lows. From the July 29 COT Report to last week’s report, technical funds (in the managed money category) sold nearly 34,000 contracts of new short contracts in COMEX silver, as silver prices fell nearly three dollars. I would not be surprised if the technical funds added as many as 5,000 or 6,000 new shorts in the COT report coming this Friday. It is not possible that the aggressive short sale (all on new price lows) of the equivalent of 170 to 200 million oz of silver wouldn’t drive the price of silver lower. This is the guts of the silver manipulation, not wild conspiracy theories. - Silver analyst Ted Butler: 24 September 2014

Except for palladium, it was another down day for the precious metals on Wednesday---and platinum set a new low for this move down as well.

Here are the 6-month charts for all four---and the platinum chart is the standout.

And as I write this paragraph, London has just opened---and I see that the HFT boyz have been busy in all four precious metals once again, with platinum at a new low for this move down again, and the other three precious metals are well below their late afternoon closing prices in New York on Wednesday.  Gold volume is just under 25,000 contracts net---and silver's net volume is a bit over 10,000 contracts.  Both these numbers are pretty heavy for this time of day.

The dollar index, which had done nothing through most of the Far East trading session, began to rally shortly after 2 p.m. Hong Kong time---and less than an hour before the London open.  It's currently up 26 basis points.  All four precious metals were already at their lows of the day before the dollar index began to rally, so it's not possible to pin their price movements on that.

It's obvious that the bear raids in the precious metals, copper and oil, by JPMorgan et al have reached a new level of ferocity the likes of which I, nor anyone else reading these words, has ever seen since I began tracking these markets back in 1999.  The powers-that-be are pulling out all the stops on this one.  When it all ends is now impossible to tell.  One thing is for sure, is that the engineered price declines we've been witnessing for the past couple of months have nothing whatsoever to do with supply and demand.  It's all paper games between 'da boyz' and the technical funds in the managed money category.

And as I send today's column off to Stowe, Vermont at 5:15 a.m. EDT---I see that the HFT boyz set a new low gold price, or perhaps a double bottom shortly after London opened.  It's hard to tell which---and that won't be known for a while yet.  At the moment, gold is rallying a bit.

Ditto for silver.

Net gold volume is now a hair under 40,000 contracts---and silver's net volume is north of 14,000 contracts.

Platinum also set a new low by a dollar or so after the London open---and palladium got slammed by 14 bucks at the same time, but is well off its low tick at this point.  The dollar index is now up 35 basis points, but as I mentioned earlier, this is just a fig leaf for the HFT boyz and their algorithms to hide behind, as with the exception of palladium, most of the lows were set before the dollar index made its big move just before the London open.

I'm off to bed---and I haven't a clue as to what to expect when I power up my computer later this morning, but I'll mentally prepare myself for any eventuality.

See you tomorrow.

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