Precious metal shares get crushed again. Withdrawals from both GLD and SLV yesterday. No sales report from the the U.S. Mint---and big in/out movements in both gold and silver at the Comex-approved depositories on Monday.
NEW YORK ( TheStreet) -- The gold price didn't do much of anything---and the smallish rally that began shortly after the London open, wasn't allowed to get far---and it didn't do much after that. The gold price traded in a nine dollar range on Tuesday---and the highs and lows aren't worth looking up. Gold finished the Tuesday trading session at $1,168.20 spot, up $2.90 on the day. Net volume was decent at around 128,000 contracts. Of course silver was under selling pressure right from the 6 p.m. open in New York on Monday evening---and was down two bits by 11 a.m. Hong Kong time. It traded flat from there until about 9:30 a.m. GMT in London, before rallying a bit, but wasn't allowed to get above its Monday closing price. From there it chopped sideways to lower for the remainder of the Tuesday session. The high and low ticks are barely worth looking up---$16.165 and $15.905 in the December contract. Silver closed yesterday at $16.03 spot, down 11.5 cents on the day. Net volume was 31,500 contracts. Platinum attempted to rally at the open on Monday evening, but ran into the HFT boyz within 30 minutes---and was down over fifteen bucks by 11 a.m. Hong Kong time. It rallied a hair after that, but ran into more selling pressure just before lunch in New York---and at one point was down $21 dollars, but was closed down 16 bucks. Palladium got sold down five bucks in early trading, but was back to unchanged by noon in Zurich. But that was it for the day, as the HFT boyz were relentless after that, snuffing out every rally attempt---and guiding the price lower. 'Da boyz' closed palladium down 19 dollars on the day. It should be obvious from the chart that $800 was the 'do not cross' line for this metal. The dollar index closed late on Monday afternoon at 87.29---and traded lower for the entire Tuesday session---and a rescue attempt was made when it fell below the 87.00 mark. The index closed at 86.995. The gold stocks opened down---before rallying a bit into the London close, which was 11 a.m. EST in New York. After that it was all down hill---and the HUI finished the Tuesday session down 3.91%, barely off its low tick. The silver stocks got crushed, as Nick Laird's Intraday Silver Sentiment Index closed down a whopping 5.53%. Although it's convenient to blame darkling forces, I would think that a large mutual fund or two had to liquidate positions for redemption reasons whether they wanted to or not, as the shares were brutalized far worse than the price action would indicate possible. We've certainly seen a lot of this in the last 30 days. But the question still remains on down days like this---who were the buyers? The CME Daily Delivery Report for Day 4 of the November delivery month showed that 3 gold and 8 silver contracts were posted for delivery within the Comex-approved depositories on Thursday. The CME Preliminary Report for the Tuesday trading session showed that gold open interest for November dropped 10 contracts to 55 contracts---and silver's November o.i. declined by 8 contracts down to 125 contracts. All of this minus the contracts in the paragraph above for delivery on Thursday. There were withdrawals from both GLD and SLV yesterday. Authorized participants withdrew 76,592 troy ounces of gold---and a chunky 2,073,283 troy ounces of silver. The good folks over at Switzerland's Zürcher Kantonalbank updated their website with their gold and silver ETF data as of the close of trading on Friday, October 31. Their gold ETF declined by another 22,500 troy ounces---and their silver ETF shed another 44,260 troy ounces. There was no sales report from the U.S. Mint yesterday. It was a big in/out day for both gold and silver at the Comex-approved depositories on Monday. In gold, 23,469 troy ounces were reported received---and a whopping 345,120 troy ounces were shipped out. The link to that activity is here---and it's worth a quick peek. In silver, there was 600,508 troy ounces received---and 910,229 troy ounces shipped out the door on Monday. And, like Friday, all the activity was concentrated in the CNT Depository and Canada's Scotiabank. The link to that action is here. I don't have all that many stories today, so that makes your final edit much easier.
¤ The Wrap
A few words on the brutal two-day sell off [last Thursday and Friday] and what I have read as to its cause – basically Thursday’s decline was due to the Fed’s ending of Q.E. and Friday’s decline was due to Japan’s acceleration of monetary ease. I don’t mean to be disrespectful of others’ opinions, but those explanations were contradictory and nonsensical. Let me see if I can’t back up my assertion. Gold and silver declined sharply for one reason only – technical fund selling on the COMEX. Of course, we’ll have to wait until [this Friday's] Commitments of Traders Report (COT) for confirmation; but there has been massive technical fund selling on every price decline in gold and silver for months and years. In fact, there never has been a significant decline in the price of gold or silver without technical fund selling (and commercial buying). Based upon history and the basics of how technical funds operate - selling on price declines and buying on rallies – and considering that new multi-year price lows are the strongest sell signal possible for technical funds, there is little question that the technical funds (in the Managed Money category of the report) were the big sellers last Thursday and Friday. - Silver analyst Ted Butler: 01 November 2014 It was a nothing sort of day in both gold and silver yesterday, as JPMorgan et al mostly concentrated on the other four commodities of the 'Big 6'---platinum, palladium, copper and West Texas Intermediate. Here are the 6-month charts for each, so you can see how successful they've been in getting the technical funds in the Managed Money category to go even more short than that already are. Crude oil is at a new low for this move down. Ted Butler's comments on gold and silver in his quote above also applies to every other commodity that is currently under assault in the Comex futures market---and now even the grains aren't immune to the 'silver disease'---as he puts it. And on the other side of this commodity coin is the U.S. dollar index which is at a record high for this move up---and it's an absolute certainty that the technical funds in the Managed Money category now hold a record long position. And as I type this paragraph, the London open is thirty minutes away---and the HFT boyz and their algorithms have been hard at work in all four precious metals once again. Both gold and silver printed new lows for this engineered price decline to the downside---and platinum and palladium are rapidly heading in that direction as well. Gold volume is north of 55,000 contracts, with virtually all of it in the current front month, which is December---and that's a sure sign that it's all of the HFT variety, as there are virtually no roll-overs out of the December contract. Ditto for silver, as the net volume there is 14,000 contracts. You'll note that the [current] lows all occurred at exactly the same time, so this was obviously a co-ordinated attack---nothing free-market about this at all. Here's the Kitco gold chart as of 2:41 a.m. EST. The dollar index, which had been as low as 86.95 just before lunch Hong Kong time, has 'rallied' up to 87.23 at the moment. Maybe it's just me, but this assault on the precious metals appears to have some urgency to it. I've had a few readers wonder out loud whether this engineered price decline will continue until the Swiss gold referendum has come and gone. I have no idea, nor does anyone else. We'll find out in the fullness of time. It's just too bad that none of today's price/volume activity will show up in Friday's Commitment of Traders Report, as the cut-off for that---and the companion Bank Participation Report---was at the close of Comex trading yesterday. And as I fire this off into cyberspace at 5:30 a.m. EST, JPMorgan et al are still hard at it, with new lows in both gold and silver. At their new [for the moment] low price ticks, gold was down 24 dollars, silver was down about 85 cents---and platinum and palladium were down 27 bucks apiece. Here's the Kitco silver chart as of 5:29 a.m. EST. Gold net volume has now blown out to around 82,000 contracts, with some decent roll-over activity now that London is open. Silver's net volume is a bit over 24,000 contracts. The dollar index continues to power higher---and is now up 57 basis points. As Jim Rickards said some time ago, JPMorgan et al should totally embarrassed by how obvious their price management scheme has become. But it's equally as obvious that they don't give a flying &*@# what anyone thinks or says---even First Majestic Silver's CEO, Keith Neumeyer. And as for what may happen during the New York trading session today, one should be ready for anything, as 'da boyz' go for the kill. How did it come to this? Before heading off to bed, I'd like to mention the fact that Nick Giambruno, the Senior Editor over at the InternationalMan.com Internet site is launching a brand new publication entitled " CRISIS SPECULATOR"---and you can read all about it by clicking here. See you tomorrow.