Wednesday, November 12: Today in Gold and Silver

NEW YORK ( TheStreet) -- Gold rallied a few dollars in early Far East trading, but that ended about 9:45 a.m. Hong Kong time.  The price got turned over at that point, hitting its low tick minutes after 1 p.m. in Hong Kong---and from there it rallied in fits and starts to its 2:15 p.m. EST high tick.  It got sold down into the 5:15 p.m. electronic close.  It appeared, at least to me, that every rally attempt during the Tuesday session got capped before it could get too far, although the final sell-off appeared to have been dollar index related, as it happened to all the other precious metals, except palladium.

The low and high ticks were reported by the CME Group as $1,145.50 and $1,172.50 in the December contract.

The gold price closed in New York yesterday at $1,162.90 spot, up $11.30 on the day.  Net volume was pretty decent once again at 155,000 contracts.

The silver chart for the Tuesday session looked the same as the gold chart, except for the fact that the low price of the day came about 8:45 a.m. GMT in London.

The low and high in this precious metal were recorded as $15.445 and $15.88 in the December contract.

Silver finished the Tuesday session at $15.70 spot, up a whole 9 cents on the day but, like gold, would have obviously closed much higher than that if allowed to trade freely, which it obviously wasn't.  Net volume was around 33,000 contracts.

Platinum spent most of the Far East session in positive territory, but began to get sold off around 2:30 p.m. Hong Kong time, with the low of the day coming at noon in Zurich.  After that it traded like gold and silver, with its high tick coming shortly after 2 p.m. EST as well.  From there it got sold down hard---back to almost unchanged.  Platinum was closed up a buck.

As you can see from the chart below, palladium traded the same as platinum, with the only difference being that the high of the day came minutes after 12 o'clock noon in New York---and it traded almost ruler flat after that---finishing up 9 dollars on the day.

The dollar index closed late on Monday afternoon in New York at 87.78---and after dipping a bit in mid-morning trading in Hong Kong, rallied to its 88.03 high shortly before 10 a.m. GMT in London.  From that point it drifted quietly lower until the London p.m. gold fix---and from there headed lower in a much more dramatic fashion until 'gentle hands' appeared to rescue it at the 87.38 mark around 2:15 p.m. EST, which turned out to be the high tick in three of the four precious metals.  From there it 'rallied'---and finished the Tuesday session at 87.59, which was down 19 basis points from its Monday close.

Here's the 6-month U.S. Dollar index---and I'm still of the opinion that, looking at the RSI trace, this rally is pretty much done.  Time will tell---and not too much I would think.

The gold stocks gapped up a percent and change at the open yesterday---climbing to their high around 2:20 p.m. EST, before selling off a bit into the close.  The HUI finished up 3.89% on the day.

The silver equities follow a very similar pattern to the gold stocks, but Nick Laird's Intraday Silver Sentiment Index closed up 4.74%---and was up over 6 percent at one point.

The CME Daily Delivery Report was another bust, as nothing was reported for delivery in either gold or silver tomorrow.

The CME Preliminary Report for the Tuesday trading session showed that there were 29 gold contracts still open in the November contract, up 3 from Monday's report.  Silver's November o.i. was down 12 contracts to 110.

It was another day with a withdrawal from GLD.  This time it was a more modest amount, as an authorized participant took out 28,832 troy ounces.  And as of 8:59 p.m. EST yesterday evening, there were no reported changes in SLV.

Just as a point of interest---since the end of October 538,228 troy ounces of gold have been withdrawn from GLD---and over the same period 514,335 troy ounces of silver have been added to SLV.

Once again there was no updated short positions posted for either GLD or SLV by the good folks over at  They're late.

The folks over at Switzerland's Zürcher Kantonalbank updated their website early this morning with the latest data for their gold and silver ETFs as of November 7---and this is what they had to report.  Both ETFs were down---gold by 39,131 troy ounces---and their silver ETF by 461,980 troy ounces.

There was no sales report from the U.S. Mint.

It was another quiet day over at the COMEX-approved depositories on Monday, as only 8,037 troy ounces of gold were reported received---and 2,668 ounces were shipped out.  In silver, nothing was received---and a smallish 148,847 troy ounces were shipped out, with the deliveries split between three different warehouses.

I'm happy to report that I don't have all that many stories for you today---and I hope you find the odd one of interest in the list below.

¤ The Wrap

There still seems to be a disconnect between the relative holdings of metal in the leading metal Exchange Traded Funds (ETFs). While not declining at the rate of last year when 40% of the gold departed the big gold ETF, GLD; the reductions in gold ETF holdings continued this week. The amount of gold held in GLD has now slipped to levels not seen since 2008. In contrast, since 2008, metal holdings in the big silver ETF, SLV, have roughly doubled and have remained steady over the past few years. The price of silver is down substantially both on an absolute and relative to gold basis, yet appears to be held much stronger by investors than has been the case in gold. Other than price manipulation, I’m at a loss to explain how that could be, by looking at relative price performance. - Silver analyst Ted Butler: 08 November 2014

After the Friday/Monday up/down price scenario, it's entirely possible that 'the powers that be' will take away yesterday's gains.  So, although I was happy to see the rallies in all four precious metals yesterday, I'll wait until prices are substantially higher before I believe it, or begin to reach for the party favours.

Here are the 6-month charts for all four precious metals, WTIC---along with the 6-month U.S. dollar index for the second time in today's column.

Of course the precious metal prices are miles below their respective 50 and 200-day moving averages, so unless the U.S. dollar begins to head south with a vengeance, a distinct possibility based on the 6-month chart above, the Managed Money in the technical fund category are going to be in no hurry to head for the exits on their monster short positions in all the 'Big 6' commodities.  It will be interesting to see how this all shakes out over time.

And as I type this paragraph, the London open is fifteen minutes away---and three of the four precious metals are trading a bit higher than their respective closes in New York on Tuesday afternoon.  Net gold volume is already getting up there at 34,000 contracts---and silver's net volume is 4,900 contracts.  Roll-overs are pretty decent, which certainly wasn't the case with the big volume present this time on Tuesday morning.  The dollar index is down 13 basis points.

Yesterday was the cut-off for Friday's Commitment of Traders Report---and eye-balling the five trading days just past, I'd guess that we'll see further improvement in the COT Report, but because of the wild price volatility during the reporting week---coupled with over-the-moon volume on those days---I certainly wouldn't bet any money on it.

Improvement or not, the set-ups in all of the 'Big 6' commodities, at least from a COT point of view, are still wildly bullish.

And as I send this off into cyberspace at 5:05 a.m. EDT, I see that the current highs for gold, silver and platinum came minutes after 2 p.m. Hong Kong time, which is about the usual time 'da boyz' show up when they begin to exert price pressure before the London open.  Gold's net volume is now up around the 46,000 contract mark---and silver's net volume is about 7,400 contracts.  Of course the dollar index began to rise minutes [now up 11 basis points] before the London open, but all four precious metals were past their highs before that event occurred.

Based on what I see at the moment, I'm not overly optimistic about how the remainder of the Wednesday trading session may unfold.  I'd love to be spectacularly wrong, of course---but we'll have to see how the trading day progresses, particular once JPMorgan et al show up for work at the COMEX open.

See you tomorrow.

Ed Steer

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