Wednesday, November 26: Today in Gold and Silver

NEW YORK ( TheStreet) -- NOTE:  Even though it's Thanksgiving Day in the USA tomorrow, I will have a column.  But it will be posted on the Saturday time schedule.

The gold price peaked out on Tuesday at the London a.m. gold fix and then got sold down back below the $1,200 spot price by 1:10 p.m. GMT---10 minutes before the Comex open.  The ensuing rally back above $1,200 got hit by the HFT boyz a minute or so before 8:30 a.m. EST---and 30 minutes later, gold hit its low tick of the day.  After that it rallied back to the $1,200 pot mark at or just before the London p.m. gold fix, which was minutes before 10 a.m. in New York.  The price dipped a few dollars after that, but rallied to close a hair above the $1,200 mark.

The low and high ticks, such as they were, were reported by the CME Group as $1,189.00 and $1,202.20 in the December contract.

Gold closed the Tuesday session at $1,201.20 spot, up $2.90 from Monday's close.  Gross volume came close to 360,000 contracts, but only netted out to 62,000 contracts, even lower than Monday's net volume.

The silver price didn't do much, hitting its low of the day shortly before 1 p.m. Hong Kong time.  From there it rallied to its high tick around 8:25 a.m. GMT in London.  From the high of the day, the silver price got sold down to its low of the day at 9:01 a.m. EST---the same minute as gold hit its low.  From that point silver rallied until 10:30 a.m. EST---and then sagged down until 12:30 p.m. EST [the same as gold]---and from there it rallied until around 3:30 p.m., before trading sideways into the close.

The low and high ticks were recorded as $16.435 and $16.69 in the December contract.

Silver's gross volume was a bit more than 125,000 contracts, but netted out to only 16,500 contracts, which is a very tiny amount.

Platinum rallied early in Far East trading on their Tuesday but rolled over, hitting its low of the day around 1 p.m. Hong Kong time.  From there, it rallied until about noon in Zurich.  It had a down/up dip from 8:30 to 9:00 a.m. in New York, just like gold and silver---and from shortly after 10 a.m. EST, it chopped sideways in a fairly tight range into the 5:15 p.m. close of electronic trading.  Platinum closed up an even $20.

Palladium took another run at the $800 spot price mark, but ran into a willing seller about 9:45 a.m. EST when it looked it was about to blast above that mark.  After that, it got sold back down to unchanged on the day.

The dollar index closed late on Monday afternoon in New York at 89.15.  From there it didn't do much until it spiked up to its 88.30 high at the 8:20 a.m. EST Comex open.  Then it headed south with a vengeance, hitting its 87.84 low minutes after 11 a.m. in New York.  After that, it didn't do a lot, closing at 87.89---down 26 points on the day.

The gold stocks opened unchanged---and rallied a percent or so within the first hour---and then drifted quietly lower until 12:30 p.m. EST.  The gold price began to rally at that point, as did the gold shares---and they really put on a burst in the last 30 minutes of the New York trading session, as the HUI closed up a very respectable 3.94%.

The silver equities followed a very similar pattern---and Nick Laird's Intraday Silver Sentiment Index closed up 4.40%.

The old wives' tale that big movement in the precious metal shares is a precursor to a rally in the metals themselves is about to be put to the test.  Here's an article from the Internet site headlined " Gold stocks surge in massive volumes" that reader M.A. sent our way late last night.

The CME Daily Delivery Report showed that 4 gold and 2 silver contracts were posted for delivery within the Comex-approved depositories on Friday.

The CME Preliminary Report for the Tuesday trading session showed that gold open interest in November dropped by 7 contracts and is down to 4 contracts still open.  Silver o.i. dropped from 28 contracts down to 2 contracts.  These few contracts are what is posted for delivery on Friday in the previous paragraph, so the November delivery month is done.

There were no reported changes in GLD yesterday---and as of 9:35 p.m. EST yesterday evening, there were no reported changes in SLV, either.

I note that the folks over at the Internet site updated their short positions for both GLD and SLV for the period ending November 15---and here's what they had to say.

The short position in SLV blew out by 17.53%, from 14.85 million shares/troy ounces to 17.45 million shares/troy ounces.  The new short position represents 542 metric tonnes of the stuff, or approximately 1,745 Comex good delivery bars---eight days of world silver production.

In GLD, the short position increased by 17.37%---from 1.51 million troy ounces, to 1.77 million troy ounces.  That's 55 metric tonnes of the stuff.

Allowing a short position to exist in a physical metal fund is one of several reasons I wouldn't own either one of these ETFs.

The good folks over at Switzerland's Zürcher Kantonalbank updated their gold and silver ETFs with data as of the close of trading on Friday, November 21.  Their gold ETF declined by 19,567 troy ounces---and their silver ETF also declined, by 21,585 troy ounces.

There was another decent sales report from the U.S. Mint yesterday.  They sold 4,000 troy ounces of gold eagles---1,000 one-ounce 24K gold buffaloes---and 211,500 silver eagles.

There wasn't much gold movement over at the Comex-approved depositories on Monday.  There was 2,290 troy ounces reported received---and 2,432 troy ounces shipped out.

It was totally different in silver, of course, as 943,300 troy ounces were received---and 1,357,141 troy ounces were shipped out.  The link to that action is here.

I have a decent number of stories in today's Critical Reads section---and I hope you have the time to read all the ones that you find of interest.

¤ The Wrap

The U.S. Mint continues to produce and sell Silver Eagles at their maximum production capacity, but sales are still rationed, indicating more demand than supply. As with the unusual demand for wholesale bars in the COMEX silver inventories, the great demand for Silver Eagles is usually a free market mandate for higher prices according to the law of supply and demand. But the operative term is free market mandate and, once again, the only plausible explanation for great silver demand and lower prices is a market that is being manipulated.

Still, we have crossed the 40 million oz mark in Silver Eagles sold this year, only the second such year in the 28 year history of the program. And yes, I still believe it has not been broad retail demand that has accounted for the record Silver Eagle sales these past few years, but a certain Mr. Big. For some reason, Mr. Big hasn’t taken a shine towards Gold Eagles, as year-to-date sales are down close to 40% this year compared to last and even more compared to the past few years. I suppose if you are going to manipulate prices more in one commodity compared to another, it would follow that you would buy much more of the more manipulated item – silver in this case. - Silver analyst Ted Butler: 22 November 2014

Except for the rather strange down/up move after the Comex open yesterday, nothing much should be read into yesterday's price action.  However, the rather strange goings-on in the gold price feeds on many other Internet sites yesterday that Nick Laird pointed out should not be forgotten---but as of this moment, I've heard nothing further about it.

Here are the 6-month charts for the 'Big 6' commodities.  Only palladium is currently above its 50-day moving average---and Dr. Copper set a new low price tick for this move down, but only by a fraction of a cent.  WTIC came close to a new low---and with the OPEC meeting in Geneva tomorrow, I'm sure that we'll see further volatility in the oil price, along with natural gas.

Yesterday was the day that the large traders had to be out of their December positions in the Comex futures market---and everyone else has to be out by the close of trading today, as there won't be much in the way of volume on Thursday, as the markets are closed in the U.S.  Friday is First Notice Day for the December delivery month---and I'll have all of that, plus the latest Commitment of Traders data in Saturday's missive.

And as I write this paragraph, the London open is about 20 minutes away.  The gold price got sold down below the $1,200 spot mark shortly after trading began in the Far East on their Wednesday morning---and its rally attempt above that mark shortly after 3 p.m Hong Kong time met the same fate.  Net volume is amazingly light at just under 6,000 contracts, with most of the trading now in the new front month, which is February.

Silver got sold down 15 cents or so, with its Far East low coming about 12:30 p.m. Hong Kong time---and it hasn't done much since.  Silver's net volume is a shockingly low 1,500 contracts and, like gold, the greater percentage of the trading activity is now in silver's new front month, which is March.

Based on these net volumes, nothing should be read into the current prices of either metal.

The platinum price isn't doing much, but palladium is crawling towards the $800 spot price mark once again---and I would guess that this rally attempt will meet the same fate as the one yesterday.

The dollar index isn't doing a thing.

Yesterday was the cutoff for this Friday's Commitment of Traders Report---if there is a report, that is.  I'll ask Ted today, as he keeps track of such things---and I'll let you know tomorrow.  Just eyeballing the charts for the reporting week just past, I'd guess that we'll some minor deterioration in the short positions in both silver and gold, but with the big volume/rollover activity we'd had in the last several days, I certainly wouldn't bet the farm on that outcome.

And as I send today's effort off to Stowe, Vermont at 5:20 a.m. EST, I see that all four precious metals have been sold down off their highs of the day---and only palladium is up from Tuesday's close in New York.

Net volume in gold is still very tiny, about 9,000 contracts or so---and silver's net volume is barely over the 2,000 contract mark, so nothing much should be read into the current price action except for the fact that palladium's attempt to break through the $800 price mark was turned back once again, although the trading day is still young.

The dollar index is up about 10 basis points.

Based on what I see at the moment, it seems that there won't be much net volume today, as traders in New York will be anxious to get out of the office early, as I'm sure they will have their sights set on an early start to what for most will be a long weekend.

That's all I have for today which, like yesterday, is more than enough.  I wish all my American readers a happy Thanksgiving---and if you're one of the lucky ones, a good long weekend as well.

See you here tomorrow.

Ed Steer

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