Tuesday, September 30: Today in Gold and Silver

NEW YORK ( TheStreet) -- The gold price didn't do much on Monday.  It ticked down at the 6 p.m. open in New York on Sunday night---and the Far East low came at 2 p.m. Hong Kong time on their Monday afternoon, an hour before London opened.  The 'high' of the day came at 1 p.m. BST in London---and it was down hill from there into the 5:15 p.m. electronic close, with gold closing virtually on its low tick.

The high and low for the Monday trading session were recorded by the CME Group as $1,223.90 and $1,215.30 in the December contract.

The gold price closed yesterday at $1,215.00 spot, down $4.40 from Friday's close.  Net volume was pretty light at around 95,000 contracts.

As usual, silver got sold down at the Sunday evening open in New York, hitting its low of the day at 1:00 p.m. Hong Kong time.  The subsequent 'rally' ended at the noon London silver fix---and then traded pretty flat until just before 3:30 p.m. EDT.  At the point, a thoughtful soul came along and sold the price down about a dime in the thinly-traded New York access market.

The low and high were reported as $17.43 and $17.635 in the December contract.

The silver price was closed in New York on Tuesday at $17.46 spot, down 20 cents from Friday.  Net volume was on the lighter side at 26,500 contracts.

Platinum traded more or less flat, but set a new low tick for this move down either side of 2 p.m. Hong Kong time.  The price rallied back above the $1,300 spot price mark, but that wasn't allowed to hold---and platinum was closed at $1,299 spot, down a couple of bucks.

The palladium price popped for eight bucks the moment that trading began at 6 p.m. in New York.  After that it didn't do much of anything until it jumped up another five dollars or so just before 11 a.m. in New York.  Palladium closed up $14 from Friday's close.

The dollar index close on Friday afternoon in New York at 85.64---and the proceeded to do very little during the Monday session, trading 15 points either side of unchanged---and then closing at 85.61---down a small handful of basis points.  It's 'high' tick was 85.79---which came around 1:40 p.m. in Hong Kong.  Nothing to see here.

The gold stocks opened in positive territory, but within 30 minutes were back in the red---and that's where they stayed for the rest of the day, closing on their low tick, as the HUI finished down 1.06%---and breaking the 200 barrier for the first time since last December, closing at 199.55.

The chart pattern for the silver equities was very similar, but they got sold down harder, as Nick Laird's Intraday Silver Sentiment Index closed down 1.88%---and also on its low tick of the day.

The CME Daily Delivery Report for Day 1 of the October delivery month showed that 419 gold and 61 silver contracts were posted for delivery within the Comex-approved depositories on Wednesday.  In gold, the big short/issuer was Canada's Scotia Bank with 418 contracts---and Barclays was the only long/stopper of note, with 233 contracts in its client account---and another 173 contracts in its in-house [proprietary] trading account.

In silver, the only short/issuer of note was Jefferies with 52 contracts.  HSBC USA stopped 37 of them.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Monday trading session showed that 2,979 gold and 414 silver contracts are still open in October, but I expect these number to decline rather precipitously within the next 24 hours or so, as the last of the October roll-overs get reported to the CME.  The picture should be much clearer by the time Wednesday's column gets posted---and don't forget to subtract the Day 1 deliveries from these numbers.

There were no reported changes in GLD yesterday---and as of 6:28 p.m. EDT yesterday evening, there were no reported changes in SLV, either.

The U.S. Mint had another sales report.  They sold 4,000 troy ounces of gold eagles---1,000 one-ounce 24K gold buffaloes---325,000 silver eagles---and a surprising 2,000 platinum eagles.

Over at the Comex-approved depositories on Friday, there was no in/out movement of gold worth mentioning, but it was another very decent day in silver once again---and although only 5,059 troy ounces were reported received, there was 692,827 troy ounces shipped out.  The big withdrawal was at the CNT Depository.  The link to that activity is here.

Here's a chart that Nick Laird passed around late on Sunday evening MDT---and it shows that 50.26 tonnes of gold was removed from the Shanghai Gold Exchange during the week ending September 19.   Of course the headline mentions it---and Koos has lots more to say about this in a story I have posted in the Critical Reads section.

I have a decent number of stories for you today---and I'll leave the final edit up to you once again.

¤ The Wrap

So why is so much silver flowing into the SLV, particularly in light of the lack of gold flowing into GLD and the crummy price action? I can’t uncover or imagine a sinister plot by the bad guys---aka the collusive commercials on the COMEX---and by process of elimination must assume it represents value buying motivated by the incredibly cheap price of silver. Plus, the buying in SLV looks widespread, since no large buyer has revealed a 5% holding (18 million shares) yet---and we have not seen a conversion of shares to metal which would suggest a large buyer was seeking to shield [its] identity. If the large recent deposits of metal into SLV are bearish in any way, I can’t see it. - Silver analyst Ted Butler: 27 September 2014

It was a nothing sort of day in gold and silver yesterday, but neither one was allowed to close in positive territory.  Da boyz took another slice off the platinum salami---and palladium was the only winner on the day.  Even copper was closed at a new low for this move down.

As usual, here are the charts for all four precious metals---and this time I've included the 6-month chart for copper.  It's the same story in this metal, as JPMorgan et al continue to engineer prices lower, buying every long position that they force the technical funds/Managed Money to sell, along with buying the long side of every trade these same traders go short.

As I write this paragraph, it's 2:30 p.m. in Hong Kong on their Tuesday---and 2:30 a.m. in New York.  The London open is thirty minutes away.  With the exception of silver, the precious metals are up a hair---and platinum is back above $1,300 spot for the moment.  Volumes in gold and silver are vanishingly small---gold around 9,800 contracts, and silver at 3,100 contracts.  The dollar index is down a handful of basis points.

Today, at the 1:30 p.m. EDT close of Comex trading, is the cut-off for this week's Commitment of Traders Report.  Just eyeballing the above charts---and provided nothing untoward [to the upside] happens in the precious metal market for the remainder of the Tuesday trading session---we should continue to show further improvement in the Commercial net short positions in all four precious metals, including copper.

I suppose we could get more oversold than we already are, but we're at extremes rarely seen in the last decade---and there has to be a limit to the amount of long positions that the technical funds have left---or are prepared to sell---or how short they're prepared to go when prices are this far below their respective 50 and 200-day moving averages---which are now grotesque amounts in all four precious metals, which you can see at a glance in the above charts.

And as I check the precious metal charts at 4:30 a.m. EDT, I see that nothing much has changed in the last couple of hours as far a prices are concerned.  Gold volume is up to 15,000 contracts, with silver volume a hair over 5,000 contracts---which are still very much on the light side.  The dollar index is back to unchanged.

If the powers-that-be really want a little inflation to show up on Planet Earth, all they have to do is let the precious metal prices run up from here---and that would take the rest of the commodity complex with them.  However, the problem is that once started, it would be difficult to stop.  But the way I see it at this point, the gold card is the only one they've got left to play---and it remains to be seen if they're desperate enough to do it, either in incremental amounts, or in a revaluation.

The COT structure is certainly set up for a bullish run to the upside---and as both Ted Butler and I have stated for many years, all JPMorgan et al have to do is stand back, do nothing---and let nature take its course.  However the negative side of that is that all the world's precious metal ETFs---including GLD and particularly SLV---will probably require more metal than exists, or is available.  So if it does play out that way, it will be interesting to watch if JPMorgan and HSBC USA resort to shorting the shares in these ETFs in lieu of depositing metal, which is what they've done in the past.

With in/out activity in silver at the Comex-approved depositories screaming of a hand-to-mouth existence---and the counterintuitive deposits into SLV continuing unabated, there's obviously something going on under the hood which we are not yet privy to.

We'll just have to wait to see how this all plays out.

Today is the last day of the month---and the quarter---and nothing will surprise me as far as price action is concerned when I roll out of bed later this morning.

And, having said that, here's the Kitco gold chart as of 5:35 a.m. EDT.  The other three precious metals are under price pressure as well, but da boyz and their algos are really putting the boots to gold at the moment.  It's not a new low for this move down yet, but the trading day is still young.

But before heading in that direction, I'd like to mention The Grand Cayman Liberty Forum that's being held at Marriott - Grand Cayman from November 16 to November 20, 2014Casey Research presenters will be Doug Casey, Terry Coxon, Jeff Clark, Nick Giambruno and Paul Rosenberg.

For more information you can telephone 1-800-926-6575---or check out the website linked here.

See you tomorrow.

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