¤ The WrapSo 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, 2014. Casey 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.