Saturday, December 27: Today in Gold and Silver

NEW YORK ( TheStreet) -- The gold price began to rally almost from the beginning of trading at 6:00 p.m. on Thursday evening---Friday morning in the Far East---and by the London a.m. gold fix, it was up about twelve bucks or so.  Once the 'fix' was in, gold rallied to its high of the day just shy of the $1,200 spot price mark at the noon silver fix.  From there it chopped sideways to lower for the remainder of the Friday session.

The low and high ticks were reported by the CME Group as $1,175.20 and $1,199.10 in the February contract---and I suspect that there was a not-for-profit seller standing there making sure that it didn't break above the $1,200 spot price mark, which it didn't/wasn't allowed to do in any of the near months.

Gold closed on Friday afternoon in New York at $1,195.80 spot, up $18.90 from Wednesday's close.  Volume, net of December and January, was very much on the lighter side at 70,000 contracts.

The chart pattern for silver was very similar to gold's, except the high tick came at exactly 11 a.m. in London trading---and it should be obvious that there was a not-for-profit seller at the ready there as well.  A large portion of the day's gains disappeared after that.

The low and high were reported as $15.765 and $16.305 in the March contract.

Silver finished the Friday session at $16.085 spot, up 29.5 cents from Wednesday.  Net volume was very light at only 17,500 contracts.

Platinum had a very decent day as well yesterday, but was obviously stopped in its tracks at the $1,217 spot mark---and from there it traded a few dollars lower into the close.  Platinum finished the Friday session at $1,212 spot, up $27 on the day.

Palladium soared as well, but wasn't allowed to trade above the $817 spot price mark.  The metal closed yesterday at $815 spot, up $13 from Wednesday.

The dollar index closed late on Tuesday afternoon in New York at 90.07---and then turned lower, hitting its 89.66 low at noon EST on Christmas Day.  Then it jumped about 15 basis points---and traded flat until around 2:30 p.m. Hong Kong time on their Friday afternoon.  Then it rallied anew until its 90.07 high tick, which came at the London p.m. gold fix yesterday---and it traded pretty flat from there, closing at 90.044--almost unchanged from its Tuesday close.  Here's the 3-day chart so you can see all the action, although I can't imagine where in the world the dollar was trading at noon on Christmas Day in New York.

I don't have the HUI chart for Wednesday, but despite the fact that gold closed down a few bucks, the HUI finished up 2.90 percent.  On Friday, the gold stocks gapped up---and then chopped sideways for the remainder of the day, as the HUI finished up an additional 3.05%.  The HUI chart below is courtesy of Nick Laird.

The silver price also finished down a few cents on Wednesday, but that didn't stop Nick Laird's Intraday Silver Sentiment Index from closing up 3.90 percent on the day.  The silver equities had a very similar pattern as gold stocks did on Friday---gapping up, and then chopping sideways.  Nick's Silver Sentiment Index closed yesterday up another 2.52%.

The CME Daily Delivery Report for Wednesday showed that 13 gold and 1 silver contract were posted for delivery within the Comex-approved depositories on Friday, so they've already been delivered. Scotiabank delivered---and JPMorgan was the stopper.   Friday's Daily Delivery Report showed that 16 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  Scotiabank delivered---and JPMorgan stopped once again. The link to yesterday's Issuer and Stoppers Report is here.

The CME Preliminary Report for the Friday trading session showed that December gold open interest dropped by the 13 contracts delivered yesterday---and December o.i. now stands at 286 contracts, minus the 16 contracts to be delivered on Tuesday.  In silver, the December o.i. fell by 2 contracts, leaving 20 contracts left.

There was another withdrawal from GLD yesterday, as an authorized participant removed 19,212 troy ounces.  There was also another decent withdrawal from SLV as well. This time it was 1,723,875 troy ounces.  Because of the holiday---and the fact that I'm on the road---I haven't had a change to talk to Ted about the 7.6 million ounces of silver that have been withdrawn from SLV this week---and I'll be more than interested in what he has to say about it in his weekly commentary this afternoon.  I'll steal what I can and post it in my Tuesday column.

I note that the good folks over at shortsqueeze.com updated their website with the changes in the short positions of both GLD and SLV as of December 15---and this is what they had to report.

The short position in SLV increased by 7.14 percent, from 15.41 million shares/troy ounces, to 16.51 million shares/troy ounces.  That's about eight days of world silver production that's owed to SLV.

In GLD, the short position decreased by 1.96 percent, from 1.572 million troy ounces, down to 1.541 million troy ounces.

Another day---and another silver eagle sales report from the U.S. Mint.  This time it was a smallish 75,500.  And, once again, no gold was reported sold.  I'm also sure that Ted will have something to say about the continuing sales of 2014 silver eagles as well---along with the total lack of sales in gold.

There was very little in/out activity in gold at the COMEX-approved depositories on Wednesday.  Nothing was reported received---and only 1,478 troy ounces were shipped out.  It was different in silver, of course, as 584,856 troy ounces were received, but only 3,054 ounces were shipped out the door.

Because of the Christmas holiday, there was no Commitment of Traders Report on Friday.  It will be posted on the CFTC's website on Monday afternoon EST---and I'll have all the details in Tuesday's column.

Nick Laird was kind enough to send me the charts showing the withdrawals from the Shanghai Gold Exchange for the week ending on Friday, December 19.  For that week, they withdrew 60.657 tonnes---and here are Nick's weekly and monthly charts that show this activity.

Unless they withdrew an eye-watering amount during the week that was, the SGE withdrawals will be down a bit from 2013.  That said, these numbers are still hugely impressive.

Because of the holidays---and the fact that I'm on the road---I've cut the stories down to the bare minimum I thought I could get away with.

¤ The Wrap

Back in the late 1970’s the Hunt Brothers accumulated close to 100 million oz of physical silver (and more in futures contracts) and were found to have manipulated the price of silver higher as a result of that accumulation. What makes the much larger accumulation of physical silver by JPMorgan today different is that it is the perfect crime.  

The Hunts were outsiders; JPMorgan is the ultimate insider. The Hunts ran afoul of the regulators; JPMorgan owns the regulators. The Hunts’ purchases were widely known; as far as I know, I’m the only one pointing to JPMorgan accumulating massive amounts of physical silver. The Hunts drove prices higher as they accumulated silver; JPMorgan, by virtue of its price control on the COMEX, has been able to accumulate silver on sharply declining prices. Talk about a stacked deck. 

Given that JPMorgan has such control over the U.S. regulators and is able to operate in near total secrecy in matters related to physical silver, it’s hard for me to imagine what could foil their perfect silver crime. All that’s missing is JPM selling out at extremely high silver prices. And considering that big banks, in essence, don’t have to report anything they don’t want to publicly report, I would be surprised if JPMorgan would even have to pay taxes if they made the many billions of dollars they seemed destined to make on silver to the upside. - Silver analyst Ted Butler: 20 December 2014

Today's pop 'blast from the past' was an easy choice.  As you may be aware, a music industry icon passed away this week---and that was Joe Cocker.  My lifetime spans his, so I've basically know about him and his music since he first came on the scene way back when.  Here's the song that started it all back in 1968,  Where the hell has all that time gone?

Today's classical piece is a short work by 19th century French composer Jules Massenet.  It's his Élégie composed c irca 1872.  It was written for voice, but here's violinist Joshua Bell doing the honours.  I'll pretend he's playing it for Joe.  The link is here.

I was somewhat surprised to see these rallies in all four precious metals yesterday---and happy to see that the precious metal equities turned in decent performances for the second day in a row as well.  I wasn't overly amused with the fact that these rallies got capped in one form or another, but it's certainly obvious that they were.

Gold, silver and platinum rallied to their respective 50-day moving averages---and palladium is now back up to its 200-day moving average.  It will be interesting to see if they are allowed to break above these averages, as it was a certainty that 'gentle hands' were there yesterday to make sure that those events didn't occur.

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

But, just like the price moves to the downside, these moves to the upside are all paper trading on the COMEX as well---and are light years removed from anything remotely close to real-world supply and demand fundamentals.  JPMorgan et al are still in firm control of the precious metals.

We have 2.5 business days left in the month---and the year---and after Friday's performances, I'll be more than interested in what happens in the final days.

I have nothing else to add today, as this is the holiday-shortened version---and I've been at it far too long already.

Enjoy what's left of your weekend---and I'll see you here on Tuesday.

Ed Steer

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