Tuesday, November 4: Today in Gold and Silver

NEW YORK ( TheStreet) -- Gold got hammered right out of the gate at 6 p.m. on Sunday evening, hitting a new low for this move down in the spot market at 8 a.m. Hong Kong time.  It rallied from there, hitting its high tick at the noon silver fix in London---and that was it for the day, as the price got sold down progressively lower during the New York trading session.

The low and high ticks were reported by the CME Group as $1,173.40 and $1,161.00 in the December contract.

Gold was closed at $1,165.30 spot, down $7.60 on the day.  Net volume was very much on the lighter side at  108,000 contracts, with 30,000 of those coming before the London open.

Silver got taken to the woodshed at the Sunday night open---and was down almost 45 cents at its low, which came around 8:30 a.m. Hong Kong time. [This appeared to be a new low tick to the downside in silver, but the 6-month silver chart in The Wrap indicates otherwise.] From that point, silver rallied slightly into positive territory in a rather choppy fashion until the price got capped starting shortly before 1 p.m. EST.  It got sold down a bit at that point---and back into negative territory---before trading sideways in the 5:15 p.m. close.

The low and high tick were recorded as $16.22 and $15.74 in the December contract, which was an intraday move of more than 3 percent.

Silver finished the Monday session at $16.145 spot, down 3 cents from Friday's close.  Net volume was very decent at 37,000 contracts, of which 9,000 or so came before the London open.

Here's the New York Spot Silver [Bid] chart on it own so you can see the rather questionable price 'action' around 1 p.m. EDT.

Platinum followed a similar pattern, with the low tick coming about 8:30 a.m. in Hong Kong, followed by the high of the day which came at the noon silver fix in London [1 p.m. Zurich time]---and from there it traded quietly lower in the close.  Platinum was closed up 3 dollars on the day.

Palladium had a tiny down/up move on Sunday night as well, but from there it traded almost ruler flat until shortly before 10 a.m. in Zurich.  From there it rallied to its high at the noon silver fix in London [1 p.m. Zurich time]---and from there it sold off a few bucks going into the London p.m. gold fix---and then traded ruler flat once again into the 5:15 p.m. EST close.  Palladium finished the Monday trading session right on the $800 the ounce mark, up 9 bucks from Friday.

The dollar index closed late on Friday afternoon in New York at 86.91---and then rallied in fits and starts up until its 87.40 high that came about ten minutes before the 1:30 p.m. close of Comex trading.  From that point it chopped a few basis points lower into the close, finishing the Monday session at 87.29---up another 38 basis points.

The gold stocks traded around either side of unchanged until about 11:45 a.m. in New York---and then chopped higher into the close, with the HUI finishing the Monday trading session up 2.68%.  Here's Nick's chart.

It was the same story for the silver equities up until 10:45 a.m.---and then they took off as well, but rallied much more convincingly, with most of their gains coming by 1 p.m. EDT, which is the point at which the silver price  ran into "all the usual suspects".  From there they traded flat into the close, as Nick Laird's Intraday Silver Sentiment Index closed up a very decent 4.82%.

The CME Daily Delivery Report for Day 3 of the November delivery month showed that zero gold and 22 silver contracts were reported for delivery within the Comex-approved depositories on Wednesday.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Monday trading session showed that gold open interest in November is now 65 contracts, up ten contracts from yesterday's report.  Silver's November o.i. increased by 14 contracts to 133 contracts, minus the 22 contracts posted for delivery tomorrow.

There were no reported changes in GLD yesterday---and as of 7:36 p.m. EST yesterday, there were no reported changes in SLV, either.  But when I was editing this column at 3:55 a.m. EST, I was amazed to see that an authorized participant had added another 1,150,108 troy ounces.

As I sort of expected, there was another big sales report from the U.S. Mint to start off the new month.  They sold 12,000 troy ounces of gold eagles---2,500 one-ounce 24K gold buffaloes---and 625,000 silver eagles.  If I had to bet ten bucks, I'd bet on the fact that these sales were made on Friday, but were shoved into the new month.  If they'd been included in October sales, they would have pushed silver eagles sales well over the 6 million mark---and further into record territory---and that would just never do, would it?

There were no reported in/out movements in gold over at the Comex-approved depositories on Friday but, once again, there was very decent in/out activity in silver, as 592,820 troy ounces were reported received---and 912,591 ounces were shipped out the door.  Virtually all of the activity was at the CNT Depository and Canada's Bank of Nova Scotia.  The link to the silver activity is here.

Here are the 2-minute tick charts for the October intraday price movements for both gold and silver.  Once you average out all 23 trading days in October, the underlying price pattern becomes obvious and, as is always the case, they both have 'shape' to them.   A freely-traded commodity in anything would not have a chart pattern that looked like this.

In gold, the low came exactly an hour after the 6 p.m. open in New York---and the high tick of the day came a minute or so after 12 o'clock noon Hong Kong time/midnight EDT in New York.

In silver, the October low tick came at 11:15 a.m. EDT---and the high tick was at shortly after 1 p.m. Hong Kong time/1:00 a.m. EDT.

But the most important takeaway from these charts, besides the fact that the prices are being actively managed, is that there are no spike lows at any of the daily fixes---the two in gold and one in silver---to be found on either chart.  It was the same in September as well.

'Da boyz'---having been caught with their fingers in the cookie jar at the p.m. fix---have changed tactics, which is more than obvious in these charts.

Taking a trip down memory lane, here's what the 5-year moving average for gold used to look like before that Barclay's trader got caught banging the p.m. gold fix a year or so ago.  As you  can see, this pattern has been replaced by something new---but the 'fix' is still in.

And just for curiosity sake, here are the gold charts for the 23 trading days in October, with a different colour for each day---" rainbow spaghetti soup" is what Nick called it.  It's hard to believe from looking at the multicoloured mess below, that when the 2-minute ticks from each trading day are averaged out over the entire October trading month, that the price management scheme is laid bare---but it is.  And it's even more obvious in the 60-month/5-year rolling chart above.

I have a very decent number of stories for you today, so I hope you have the time to read the ones that interest you.

¤ The Wrap

There remain these two parallel universes: First, there’s "The Truman Show" world: Japan's Kuroda has essentially nothing to do with the great U.S. bull market. It is instead driven by robust economic fundamentals, including strong GDP and corporate profits. The U.S. is simply the best place in the world to invest – and American equities are a friggin’ slam dunk, all-in buy. King Dollar is confirmation of all that is good in the U.S.

But the alternative universe is a totally different world: Kuroda is one of a very select group of leading central bankers working desperately to sustain a runaway global financial Bubble. There’s an historic experiment in “money” printing that is at the brink of failure. Around the world there are speculative financial market Bubbles of unprecedented proportions at risk of bursting. History’s Greatest Credit Bubble already has serious cracks. Moreover, the incredible widening gap between (The Truman Show) securities prices and deteriorating (bursting Bubble) fundamental prospects boosts the likelihood of a global market accident. - Doug Noland, The Prudent Bear: 31 October 2014

It's obvious that despite the lows of last Friday, that JPMorgan et al are still around, as they set a new low price tick for [spot] gold in early Far East trading on their Monday morning---and came very close in silver.  Another of the 'Big 6' commodities that set a new low engineered price for this move down on Monday, was West Texas Intermediate Crude---and you can see that in its 6-month chart posted below.

I was happy to see the precious metal shares do as well as they did yesterday, so it's obvious that there was some serious bottom fishing going on---and I'll be more than interested to see how they perform going forward.

And as I write this paragraph, the London open is twenty minutes away---and every rally attempt in gold during the Far East trading session got sold down before it could get very far---and a the moment the gold price is basically unchanged from Monday's close in New York.  As usual, silver got sold down at the open in New York on their Monday evening---and is still down about two bits on the day.  Platinum got hit for $20 in the first couple of hours trading---and is still down 9 dollars at the moment.  Palladium is back below the $800 mark at $796.

Gold's net volume is just over 27,000 contracts---and virtually all of it is in the December contract, so it's a given that it's mostly of the HFT variety.  Silver's net volume is already north of 7,000 contracts.

The dollar index, which had been down a bit more than 20 basis points, hit its 87.08 low tick at exactly 1 p.m. Hong Kong time---and has been in rally mode ever since---and is only down 5 basis points at the moment.  Here's the U.S. Dollar Index chart for the first two hours or so of trading on Tuesday---and you can see the precise timing of the low tick, so you know that this wasn't free-market forces at work.

Today, at the 1:30 p.m. EST close of Comex trading, is the cut-off for this Friday's Commitment of Traders Report---and as I pointed out in yesterday's column, if we get through yesterday and today with no significant price moves to the upside in either gold or silver, the COT Report and companion Bank Participation Report should certainly be one for the record books.  The Monday price action was more than helpful in that regard---and now we just have to get through today.

Of course I'd be delighted if the precious metals blasted off regardless---and to hell with what these reports may or may not show---but since we're this close, I'd be happy if they held off for another nine hours or so.

Of course with both gold and silver this far below their respective 20, 50 and 200-day moving averages, the price could remain comatose for many weeks or months before the Managed Money traders are forced to cover as moving averages are penetrated to the upside.  However, it could happen anytime for other reasons and, as always, the timing is unknown.

And as I hit the send button on today's column at 5:20 a.m. EST, gold is still chopping around unchanged---and silver has rallied a bit, but is still down 17 cents from yesterday's close.   Platinum is heading lower again---and almost back at the low it hit in early morning trading in the Far East.  Palladium is about unchanged.  The dollar index hasn't changed much, either.

I wish I knew what to expect for the remainder of the Tuesday trading session, but I haven't a clue.  So nothing will surprise me when I check the charts later this morning.

See you tomorrow.

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