Precious metal equities give back most of Friday's gains. Another withdrawal from GLD---and no change in SLV. A small sales report from the U.S. Mint---and not much in/out activity in gold or silver at the Comex-approved depositories on Friday.
NEW YORK ( TheStreet) -- Not surprisingly, the gold price got sold down the moment that trading began in New York on Sunday evening. It was down eight or so dollars right up until 11 a.m. GMT in London---and then the HFT boyz showed up. There was a tiny rally between noon and 1 p.m. EST---and then it was down hill some more until 4 p.m. EST in electronic trading. From that point it rallied a few dollars into the 5:15 p.m. close of electronic trading. The high and low tick were reported as $1,177.50 and $1,146.70 in the December contract. Gold finished the Monday session at $1,151.60 spot, down $26.90 from Friday's close in New York. Volume was heavy, but a lot of it was rollovers out of the December contract, so it only netted out around 164,000 contracts, which is still very decent. Silver also got bashed at the New York open on Sunday evening, but managed to recover to unchanged---and stayed that way until shortly after 1 p.m. Hong Kong time before the selling pressure began. The London low came around 1 p.m. GMT, which was about 20 minutes before the COMEX open---and every rally attempt after that wasn't allowed to get too far. The high and low tick were reported by the CME Group as $15.88 and $15.48 in the December contract. The silver price closed on Monday afternoon in New York at $16.61 spot, down 22 cents from Friday. Net volume was 35,000 contracts. Although platinum and palladium rallied a bit in early morning trading in the Far East on their Monday, both ran into selling pressure the same as gold and silver, with the lows in both these metals coming very late in electronic trading in New York. Platinum was closed down 9 bucks---and palladium by 6 dollars. The gold shares gapped down almost 2 percent at the open---and never looked back, closing just off their low tick of day day, as the HUI closed down 6.11%. Even though silver closed down only 22 cents, the silver equities got clubbed even harder than their golden brethren, as Nick Laird's Intraday Silver Sentiment Index closed down 6.68%. That the second time in six trading days that after a big gain, the precious metal equities gave back most of, or all, their gains from the previous day. One wonders how that happens in a free market… if it's a free market, that is. Once again the CME Daily Delivery Report showed no activity in gold or silver within the Comex-approved depositories for Thursday. The CME Preliminary Report for the Monday trading session was a 'no show.' I checked their website at 3:25 a.m. EST this morning---and it still showed Friday's final numbers. The website should have been updated with Monday's data hours ago. Another day---and another withdrawal from GLD. This time an authorized participant withdrew 57,666 troy ounces. And as of 7:30 p.m. EST yesterday evening, there were no reported changes in SLV. I was expecting an update on the short positions of both GLD and SLV either Friday or yesterday---and as of 3:29 a.m. EST this morning, there have been no changes posted at the shortsqueeze.com Internet site. There was a small sales report from the U.S. Mint yesterday. They sold 3,500 troy ounces of gold eagles---and 500 one-ounce 24K gold buffaloes. There have been no silver eagles sales since the big announcement a week ago that they were all sold out---and one has to wonder, despite what the mint said, if there will be another 2014 silver eagle minted or sold this year or not? There wasn't a lot of in/out movement in both gold and silver at the Comex-approved depositories on Friday. In gold, 16,075 troy ounces were reported received---and 2 kilobars were shipped out. The 'in' activity was at Canada's Scotiabank. The link to that activity is here. In silver, nothing was reported received, and 99,396 troy ounces were shipped out---all from the CNT Depository. The link to that activity is here. I note that Endeavour Silver Corp. reported its financial results for the third quarter yesterday---and they were anything but stellar. That's 100 percent due to the JPMorgan price management scheme in the precious metals. I did note that at the end of the quarter they were holding 523,526 troy ounces of silver and 937 ounces of gold in their bullion inventory. Maybe they're finally wising up as well. I hope that this idea spreads to other primary silver producers---and the sooner the better. I have a lot of stories for you today---and I'll happily leave the final edit up to you.
¤ The Wrap
My prime indicator of conditions in the wholesale silver market – turnover or movement of metal into and out from the COMEX-approved silver warehouses – continue to flash signs of tight supply. Inventory not in great demand tends to sit there; stuff in high demand gets turned over more frequently. By that measure, I don’t know how physical silver turnover in the COMEX warehouses can get turned over more frequently than it has this year, averaging more than 4.5 million oz each week. This week, more than 6.5 million oz either came in or were shipped out of the six COMEX silver warehouses, as total inventories slipped by 600,000 oz to 179.9 million oz, not far from inventories at year end. Annualized, this week’s movement is the equivalent of almost 340 million oz or more than 40% of total world mine production. This has never occurred in any other commodity and, as such, one would think the phenomenon would at least draw some attention. - Silver analyst Ted Butler: 08 November 2014 Well, we weren't given much time to enjoy the big Friday rally, because what the market gave us on that day, the HFT boyz and their algorithms took away on Monday. Here are the 6-month charts for the four precious metals, plus West Texas Intermediate. I mentioned at the top of the column that the two big rallies in the gold stocks that we've had during the last six trading days---one on Monday Nov 3---and the other on Friday, were immediately followed by down days that negated all, if not more of the gains of the previous day. Here's the 30-day HUI chart that shows that. I can't believe that this is happening by accident. But you, dear reader, are entitled to your own opinion. And as I write this paragraph, the London open is about twenty minutes away. Gold rallied a bit in early Far East trading before getting turned over shortly before 10 a.m. Hong Kong time. The current low came minutes after 1 p.m. in Hong Kong---and the price has now rallied back to slightly above unchanged from Monday's close. The trading pattern in the other three precious metals were virtual carbon copies of what happened in gold and, except for silver---surprise, surprise!---they are now back above unchanged from their close in New York yesterday afternoon. Gold's net volume is already very high at just under 32,000 contracts---and silver's net volume is pretty chunky at 5,400 contracts. Almost 100 percent of the volume in both metals is in the current front month, with no roll-overs worth mentioning---and that's a sure sign that virtually all of the trading activity is of the HFT variety. That will certainly change once London opens for business. And, not that matters, the dollar index is up 10 basis points at the moment. The only good thing about Monday's smack down in both gold and silver is that it will certainly improve the structure of Friday's Commitment report, especially in gold. That is, of course, if nothing untoward happens to the upside during the remainder of the Tuesday trading session, since the Comex close today is the cut-off for this report. Of course I would be more than happy to see prices blow sky high---and to hell with the COT Report. And as I hit the send button on today's column at 5:10 a.m. EST, I note that not much is happening in any of the four precious metals, as all are hovering around the unchanged mark at the moment. Net gold volume is now around the 46,000 contract mark---and there still isn't much in the way of roll-over activity. Silver's net volume is just under 8,000 contracts. The dollar index, is just above the 88.00 mark, up 25 basis points from its close in New York late yesterday afternoon. That's all I have for today, which is more than enough---and I'll see you here tomorrow.