Friday, November 21: Today in Gold and Silver

NEW YORK ( TheStreet) -- The gold price chopped lower in Far East trading until 1:30 p.m. on their Thursday morning.  The ensuing rally got rolled over at 11:00 a.m. GMT---and was sold down until shortly before noon in New York.  Another rally commenced at that point---and that one lasted until around 3:30 p.m. EST, before chopping a few dollars lower in the the 5:15 p.m. electronic close.

The low and high ticks were reported as $1,176.20 and $1,196.60 in the December contract.

Gold finished the Thursday session at $1,194.50 spot, up $11.40 from Wednesday's close.  Net volume, although significantly lower than Wednesday's volume, was pretty decent at around 147,000 contracts.

Silver had a familiar pattern---getting sold down to its low tick of the day in morning trading in the Far East---and then rallying to is 11 a.m. GMT high in London.  From that point it got sold down pretty hard until the Comex open---and then it flopped and chopped around with a positive bias for most of the rest of the Thursday trading session in New York.

The low and high were recorded by the CME Group as $15.955 and $16.32 in the December contract.

Silver closed in New York yesterday at $16.25 spot, up 12 cents from Wednesday.  Net volume was 29,500 contracts, or thereabouts.

Platinum and palladium had similar charts to gold.  Their respective lows were in morning trading in the Far East---and they both chopped quietly higher until mid-afternoon in New York---and then didn't do much after that.  Platinum closed up 17 bucks---and palladium was up 6 dollars.  Here are the charts.

The dollar index closed in New York late on Wednesday afternoon at 87.69---and worked its way up to its 87.92 high shortly before 9 a.m. in London.  From there it got sold down to its 87.51 low tick at 9:30 a.m. EST.  Then it rallied [in very volatile trading] for the remainder of the day, closing in New York at 87.70, which was basically unchanged from Wednesday's close.

The intraday price swings in the dollar index are starting to get pretty wild, with the Thursday session being very much a continuation of what went on, on Wednesday.  Here's the 5-day chart to put my comments into some sort of 'historical' perspective---and it's price action one wouldn't hope to see in a reserve currency, let alone the world's major reserve currency.

The gold stocks gapped up about 3 percent at the open before sagging a bit into the New York lunch hour.  From there they rallied anew before getting sold down a bit in the last thirty minutes of the Thursday trading session.  HUI finished the day up 2.37 percent.

The silver stock followed a similar path, but rallied far more substantially during the latter part of the trading day before they too got sold off a bit heading into the close.  Nick Laird's Intraday Silver Sentiment Index closed up 2.65%.

The CME Daily Delivery Report showed that 16 gold and zero silver contracts were posted for delivery within the Comex-approved depositories on Monday.

The CME Preliminary Report for the Thursday trading session showed that gold open interest in November remained unchanged at 28 contracts---minus the 16 contracts in the previous paragraph, of course---and silver's November o.i. has remained unchanged all week at 88 contracts.  I suppose that there's still a possible delivery surprise coming out of left field between now and next Friday, but from this data it's obvious that the November delivery month will close out quietly as we approach first notice day for the December delivery month.

There were no reported changes in GLD---and as of 9:33 p.m. EST yesterday evening, there were no reported changes in SLV, either.

Since yesterday was Thursday, Joshua Gibbons, the " Guru of the SLV Bar List," updated his website with the goings-on inside SLV as provided by the Internet site at the close of business on Wednesday---and here is what he had to say--- "Analysis of the 19 November 2014 bar list, and comparison to the previous week's list:  3,450,391.8 oz were added (all to Brinks London).  No bars were removed or had a serial number change.

The bars added were from Korea Zinc (0.8M oz), Krasnoyarsk (0.8M oz), Kazakhmys (0.5M oz), KGHM (0.4M oz), and 18 others.  97% of the bars were never in SLV before (although some were dated 2012/2013).

The overallocation cannot be calculated, as part of one deposit was not completed reflected on the bar list, as there is about 957,379 oz of Tuesday's 2.4M oz deposit that is not yet reflected on the bar list."

The link to Joshua's website is here.

The U.S. Mint had a smallish sales report yesterday.  They sold 1,000 gold eagles---500 one-ounce 24K gold buffaloes---and 25,000 silver eagles.

There's a story posted in the Critical Read section about the current silver eagles sales from the U.S. Mint.  It's headlined " Eagle sales November 17 to satisfy voracious investor demand"---and you can just click on the headline if you want to read it now.

There was no gold or silver received at the Comex-approved depositories on Wednesday, but decent amount of both metals were reported shipped out.  In gold, there was 48,225 troy ounces removed from the Scotiabank warehouse---and the link to that activity is here.  And in silver there was 630,404 troy ounces withdrawn, most of which came from the CNT Depository---and the link to that action is here.

Well, The Central Bank of the Russian Federation updated their website with their October data yesterday as I said they would.  However, I was rather underwhelmed by the number of ounces of gold that they bought for their reserves during that period---only 600,000---as their governor said that they had purchased 150 tonnes of gold for their reserves so far this year.

Nick added it all up year-to-date---and I checked it myself as well---and it only comes to 133.5 tonnes.  As I mentioned in yesterday's column, they had to add 1.2 million ounces to get to the 150 tonne number, which they obviously didn't.  But the figures are what they are---and here's Nick's excellent chart.

I have a fair number of stories for you again---and I'll let you play the part of the editor once again.

¤ The Wrap

I remain amazed that the world continues to miss the most important distinction between gold and silver, namely, how much of each exists. After all, something has to explain why the world’s investors are completely unaware of the physical and financial facts surrounding silver. I’ll tell you straight out – if there were only $15 billion worth of gold inventories in the world, I’d probably be a bigger gold bull than silver bull - if you can imagine that.

Fifteen billion dollars is such a pitifully small amount for what might exist in world inventories for either gold or silver that it would be reason enough to buy either if that valuation applied. Well, it does apply to silver and doesn’t apply to gold where the amount of gold in the world is measured in the trillions of dollars ($6.5 trillion, to be precise). Furthermore, very little of the $15 billion worth of world silver inventories is available for sale – according to ETF and inventory flows. I can’t prove it, but I doubt that if someone tried to buy just one billion dollars’ worth of physical silver currently (60 million oz), the transaction could not be completed below $30. - Silver analyst Ted Butler: 19 November 2014

Despite the positive close yesterday, gold wasn't allowed a sniff of the $1,200 spot price mark---but the gold price is getting dangerously close to its 50-day moving average [currently $1,208 the ounce] which has now drifted down to within fifteen bucks of yesterday's closing spot price.  The silver price is almost a dollar away from its 50-day moving average, so there's miles to go in that metal.

Here are the 6-month charts for gold and silver, so you can see this for yourself.

Once JPMorgan et al allow one or both of these metals to break above their respective 50-day moving averages, we'll find out in a hurry whether they'll step in front of them as sellers of last resort once again and kill them with little or no gains---something they've done twice already this year.  If they don't, then their respective prices will fly.  And as both Ted and I have stated on many occasions--- nothing else matters---and it doesn't.

And as I write this paragraph, the London open is fifteen minutes away.  Gold and silver prices are unchanged from yesterday's close in New York, but both platinum and palladium popped a bit in the last half hour or so.  Net gold volume is around 18,000 contracts---and silver's is almost microscopic at 2,500 contracts.  The dollar index is rallying off its earlier low---and is down 7 basis points at the moment.

Both Ted Butler and I are more than interested in how the Friday trading session unfolds today, as we've had two surprise Friday rallies in a row that came totally out of the blue---and both times the 'Big 8' traders used [or most likely engineered] these rallies to cover significant amounts of their short positions in silver---and gold as well.  As Ted said in the quote in The Wrap section of my Thursday column, it appeared that the strange price volatility on Wednesday was engineered by 'da boyz' for the same purpose.

Today at 3:30 p.m. EST we get both Commitment of Traders Reports for positions held at the close of COMEX trading on Tuesday.  We've had the second of the two big Friday rallies in both gold and silver during the reporting week---and I'll be more than interested in what these reports tell us.  I'll have it all for you in Saturday's column.

And as I fire today's column out the door at 5:59 a.m. EST, I note that gold and silver got sold down below yesterday's close in New York, shortly before 9 a.m. GMT in London---and are now back above unchanged, but gold is still being held below the $1,200 spot price mark.  Both platinum and palladium are still up on the day and attempting to break out to the upside.  Net gold volume is now around 53,000 contracts---and silver's net volume has blown out to 10,000 contracts.  The dollar index, which was down 7 basis points when I last reported on it fifteen minutes before the London open, took off to the upside minutes after the London open---and now stands at 88.03---up 33 basis points at the moment---but off its 10:00 a.m. GMT high tick.

I'm somewhat surprised that JPMorgan et al didn't use the dollar rally to beat the living snot out of the gold and silver prices when that happened, but the day is still young---and the COMEX trading session is dead ahead.  But the fact that they didn't may mean they have other problems at the moment.

As I alluded to a few paragraphs ago, in light of what happened during the prior two Friday's trading sessions, the Friday session today could prove interesting---and absolutely nothing will surprise me when I check the charts later this morning.

That's all I have for today.  Enjoy your weekend, or what's left of it if you live west of the International Date Line---and I'll see you here tomorrow.

Ed Steer

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