Friday, December 5: Today in Gold and Silver

NEW YORK ( TheStreet) -- The gold price traded quietly lower all through Far East and early London trading on their respective Thursdays.  A rally began at, or just after, the noon London silver fix.  That rally got capped and sold down starting just before 9 a.m. EST, with the New York low coming at 9:45 a.m.   It struggled higher from there until shortly before the London close---and from there chopped quietly lower into the 5:15 p.m. close of electronic trading.

The gold price was kept in a ten dollar price range yesterday, despite the face plant in the U.S. dollar index, so I shall dispense with the low and high ticks.

Gold finished the Thursday session at $1,206.50 spot, down $3.10 from Wednesday's close.  Net volume was on the lighter side at 122,000 contracts.

Like gold, silver didn't do much going into the lead-up to the noon silver fix in London---and then minutes after the COMEX open, the price went vertical, and was capped immediately by a not-for-profit seller.  After that, the silver price made several other attempts to rally above the $16.65 spot price mark, but was turned back each time.

For the second day in a row the silver price was only allowed to trade in a two bit price range, so I shall dispense with the low and high ticks in this precious metal as well.

Silver closed in New York yesterday at $16.49 spot, up six cents from Wednesday's close.  Net volume was 34,500 contracts.

The platinum price chopped sideways in a tight range until about 20 minutes before the Zurich open.  Then it rallied to its $1,244 high about twenty minutes before the COMEX close.  From there it got sold down about 14 dollars, before rallying 5 bucks in the last fifteen minutes of the electronic trading session.  Platinum gave up half of its gains---and only closed up 14 bucks on the day.

Palladium rallied above the $800 spot price mark a couple of times during the Thursday session, but got sold down for only a 2 dollar gain by the close---finishing the New York session at $796 spot.

The dollar index closed late on Thursday afternoon at 88.96---and traded virtually ruler flat until its 89.02 high tick, which came minutes before 8 a.m. in New York.  The down it went, with the 88.24 low tick coming about 11:10 a.m. EST.  The subsequent rally topped out around the 1:30 p.m. COMEX close---and it faded a few basis points during the rest of the Thursday session.  The index closed down 88.81---down 15 basis points on the day.

You'll note that JPMorgan et al were there to cap the precious metal rallies as the roof caved in on the 78 basis point decline in the U.S. dollar index between the COMEX open and the London close.

The gold stocks started off in negative territory, but quickly popped into the green around the 10 a.m. EST London p.m. gold fix---and like we've seen so many times in the past, the shares got sold down out of all proportion to the tiny loss that metal turned in on the day.  The HUI finished down 2.48 percent.

It was exactly the same for the silver equities, as Nick Laird's Intraday Silver Sentiment Index closed down 2.26%---despite the positive close for the metal.

The CME Daily Delivery Report for Day 6 of the December delivery month showed that zero gold and 13 silver contracts were posted for delivery within the COMEX-approved depositories on Monday. Scotiabank issued 12 of them---and HSBC USA stopped 11.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Thursday trading session showed that December open interest in gold dipped by 130 contracts---and now sits at 1,975 contracts.  As I said yesterday, I'm somewhat surprised at the slow pace of gold deliveries so far in December.  In silver, December o.i. dropped by 38 contracts---and is down to 573 contracts still open---minus the 13 contracts from the previous paragraph.

There were no reported changes in GLD yesterday---and as of 9:27 p.m. yesterday evening, there were no reported changes in SLV, either.

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

Over at the COMEX-approved depositories on Wednesday, they didn't receive any gold, but shipped 57,640 troy ounces out the door.  The link to that activity is here.  In silver, 599,497 troy ounces were received, but only 41,038 troy ounces were shipped out.  The link to that activity is here.

Nick sent some charts our way late yesterday evening---and the first two are the intraday averages for gold and silver for November.  They are the two minute ticks for every day of the month, so what it gives is the underlying price trends for each metal, by smoothing out the daily 'noise'.

I have never seen monthly intraday charts for gold and silver that look like these before.  The London negative bias is gone, as gold and silver prices were positive between the London open and the New York electronic close.  Now the negative bias exists between the New York 6 p.m. open and the London open the following morning.  I doubt that this trend is permanent, but it's interesting to look at.  The last time it existed was back in 1974---forty years ago.

This last chart is the weekly gold withdrawals as reported by the Shanghai Gold Exchange.  For the week ending November 21, it was 53.556 tonnes---another very healthy number---and here's Nick Laird's most excellent updated chart showing the change.

BY THE WAY---before getting to today's stories, Nick Laird has opened up his sharelynx.com website to the public for FREE for one week---and you can check it out by clicking here.  Bookmark his home page.

I don't have all that many stories today---and I hope there are a few that you find worth reading.

¤ The Wrap

The signs of a big buyer of physical silver still appear to be clear. The U.S. Mint continues to sell Silver Eagles at its maximum production rate and may have increased that rate, according to the sales pace so far this month, to more than 150,000 coins per day (7 day week). Yet, reliable reports from the retail dealer front indicate tepid [And that's being kind. - Ed] retail demand. To my mind, if broad retail demand is not behind the surge in Silver Eagle sales, then the surge must be explained by the heavy buying of one or a few non-retail buyers (such as JPMorgan).

Since we are less than 500,000 coins from exceeding last year’s record total sales of 42,675,000 Silver Eagles, the sales surge this year must cause one to sit up and take notice, particularly in light of reports of weak retail sales throughout most of the year. And for some reason, the pronounced buying from the Mint seems confined to silver, as sales of Gold Eagles trail badly when compared to last year and recent previous years. And forget about sales of Platinum Eagles as they are so low as to question how long the Mint will continue producing them. This adds to my conviction that there is a single big buyer behind the sales of Silver Eagles. Say what you will, but no one buys any investment asset unless that buyer perceives that the price will rise. Clearly, whomever the big buyer of Silver Eagles may be, that buyer expects sharply higher silver prices. - Silver analyst Ted Butler: 03 December 2014

With the sharp fall in the dollar index yesterday, the precious metals should have been flying to the upside during that period---and it's obvious from the charts that there were sellers there to prevent the budding rallies from getting too far, especially in gold and silver.  The shares wanted to do the same thing, but as we've seen all too often recently, regardless of the price action in the metals themselves, the shares seem to have a mind of their own, which is very counterintuitive at times---and you should be asking yourself why that is.

Gold closed above its 50-day moving average again yesterday, but not by a lot---and if you look at the 6-month gold chart below, you'll see that gold has closed within a buck or so of the same price every day this week.  This wouldn't happen in a free market.

In silver it's even more egregious, as the closing price has been within a few pennies of $16.50 every day this week---and within a 30 cent range for the last 14 trading days in a row---including the two days of the key upside reversal on Friday and Monday last.

Both metals appear to be in 'lock down' at the moment.

Platinum is still marking time below its 50-day moving average---and palladium is still a distance below its 200-day moving average.

Here are the 6-month charts for all four precious metals as of yesterday's close.

And as I type his paragraph, the London open is less than ten minutes away.  The gold price has struggled back to unchanged after being down a bit in Far East trading on their Friday.  Silver was down a bit more than a percent---and it made it back into positive territory for a few minutes before getting sold back below it's Thursday closing price in New York.  Platinum has also rallied back to unchanged---and palladium is back at $800 the ounce.  Gold volume is pretty light at only 14,000 contracts---and silver's volume is 4,000 contracts.  The dollar index is up 9 basis points.

Today we get both the Commitment of Traders and Bank Participation Reports---and has been the case during the last month, I look forward with great interest to what they have to say, especially since all the price/volume data from the Friday/Monday failed key reversal to the upside will be in them.

And as I send this off into cyberspace at 5:15 a.m. EST, not much has changed in the last couple of hours.   Palladium is still up a few bucks---and the other three precious metals are down a hair from Thursday's close in New York.  Volumes in both gold and silver are very light---under 19,000 in gold and just under 5,000 in silver. Nothing to see here. The dollar index is now up 19 basis points.

Since today is Friday, I'm not sure what to expect during the balance of the trading session.  I still remember what happened on the first two Fridays in November, so I'm sort of watching for that scenario out of the corner of one eye.  But for the moment, it's very quiet out there.

That's all I have for today---and I hope you enjoy your weekend, or what's left of it if you leave west of the International Date Line.

See you tomorrow.

Ed Steer

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