Wednesday, December 31: Today in Gold and Silver

NEW YORK ( TheStreet) -- The gold price rose and fell six bucks between the Monday night open in New York---and 1 p.m. GMT in London on their Tuesday afternoon.  From there, the gold price rallied anew, before getting capped in short order at the $1,200 spot price mark, just minutes after the COMEX open.  Then the price drifted lower until shortly before the London a.m. gold fix.  Then the moment the price rallied beyond the $1,200 spot price mark, it went vertical once again, before being capped at the fix.  From there it got sold back down below the $1,200 spot price mark, but quietly rallied once again starting around 3:30 p.m. in electronic trading.

The low and high ticks were reported by the CME Group as $1,181.40 and $1,210.30 in the February contract.

Gold closed on Tuesday in New York at exactly $1,200.00 spot, up $17.40 from Monday's close.   Net volume was on the lighter side at 126,000 contracts.

Here's the 5-minute gold chart courtesy of Brad Robertson---and the 'click to enlarge' feature helps show the volume data clearly.  Add two hours for EST.

Here's the New York Spot Gold [Bid] chart so you can see the COMEX trading session in more detail.

The silver price chart looked rather similar to the gold chart, with all the inflection points coming at the same time, so I'll spare you the play-by-play.

The low and high in silver were reported as $15.75 and $16.48 in the March contract.

Silver finished the trading session yesterday at $16.27 spot, up 46 cents from Monday's close.  Net volume was 34,500 contracts.

The platinum chart was similar in many respects to the price action in gold and silver, except for the fact that once the London p.m. gold fix was done for the day, platinum spiked higher a few times after that, with its high tick coming at 1 p.m. EST, an hour after the Zurich close.  Platinum finished the Tuesday session at $1,210 spot, up 18 dollars from Monday's close.

As I've been saying for quite a while now, palladium has been following its own drummer---and that was the case again yesterday.  After being capped at $817 spot during the Monday trading session, it only rallied as high as $812 spot at 1:30 p.m. Zurich time on Tuesday---and from there got sold down for the remainder of the day.  Palladium closed at $803---down a five spot from Monday.

The dollar index closed late in New York on Monday at 90.20---and rallied as high as 90.31 an hour or so before London opened.  From there it did a 40 basis point face plant into the that open, before 'rallying' back a bit by the 10:30 a.m. GMT London a.m. gold fix.  Then it got sold down again, hitting its 89.82 low tick at the London p.m. gold fix.  After that it rallied rather lifelessly into the close.  The index finished the Tuesday session at 89.94---down 26 basis points on the day.

The gold stocks gapped up a decent amount at the open---and rallied a bit more, before rolling over starting around 1:15 p.m. EDT.  Then they traded sideways from about 2:45 onward.  The HUI closed up 3.98 percent.

The silver equities put in a similar performance---with a similar chart pattern---as Nick Laird's Intraday Silver Sentiment Index closed up 3.41%.

The CME Daily Delivery Report for the last delivery day in December showed that 109 gold and 28 silver contracts were posted for delivery within the COMEX-approved depositories tomorrow.  In gold, HSBC USA issued 108 contracts---and JPMorgan stopped 106 contracts in its in-house [proprietary] trading account.  In silver, the only issuer was HSBC USA with 28---and the two largest stoppers were Canada's Scotiabank with 15---and the CME Group for 10 contracts.  Those 50-one thousand ounce silver bars delivered to the CME Group were for settlement of the 1,000 ounce futures contracts in that metal.

Yesterday was also First Notice Day for delivery into the January contract in both gold and silver---and there wasn't much activity.  There were 2 contracts in gold that were issued and stopped---and in silver it was 12 contracts issued and stopped.  In silver, Jefferies issued---and Scotiabank and JPM stopped.  The delivery date is Friday.

The link to the rather involved Issuers and Stoppers Report for yesterday is here.

The CME Preliminary Report for the Tuesday trading session showed that all 270 contracts for gold deliveries for both yesterday and today have been deducted from December open interest---and it now reads zero.  The same in silver---zero contracts left in the December delivery month.  It is now complete---and without incident, which is always the case.

An authorized participant withdrew another 48,029 troy ounces of gold from GLD---and there were no reported changes in SLV.

Because I was on the road late last week, I forgot all about Joshua Gibbons and his weekly analysis of the SLV bar list, so I shall make amends here.

" Analysis of the 24 December 2014 bar list, and comparison to the previous week's list: 2,873,009.9 troy ounces were removed (all from Brinks London)---and no bars were added or had serial number changes."

" The bars removed were from Britannia (0.8M oz), Met-Mex (0.5M oz), Asarco (0.3M oz), and 18 others.
As of the time that the bar list was produced, it was overallocated 713.9 oz.

The link to Joshua's website is here.

Once again---and not surprisingly---there was no sales report from the U.S. Mint.

There was no in/out activity in gold over at the COMEX-approved depositories on Monday.  But, as is usually the case, it was an entirely different kettle of fish in silver.  Nothing was reported received, but a hefty 1,000,911 troy ounces were shipped out---and the link to that activity is here.

The Commitment of Traders Report for positions held at the close of trading on Tuesday, December 23 were finally posted on the CFTC's website yesterday.

In silver, the headlined number from the legacy report showed that the Commercial net short position changed very little, as it only improved by 265 contracts, or 1.32 million ounces---hardly a rounding error.

Under the hood in the Disaggregated report, there wasn't much to see, either---as the Managed Money improved their short position by 322 contracts.

Silver analyst Ted Butler had a few things to say---and I've stolen two paragraphs from his COT commentary yesterday.

"The raptors, the commercial traders other than the Big 8---or what’s left of them---accounted for all the buying and then some in adding 3,100 contracts to a net long position now totaling 23,900 contracts. That means, of course, that the big commercial shorts had to add to their concentrated short positions; which they did to the tune of more than 2,100 new shorts for the Big 4 and 600 for the Big '5 thru 8' silver shorts."

"What’s disturbing about the increase in concentrated short selling by the 8 largest commercial crooks is that the selling is unquestionably manipulative---and both JPMorgan and the CME, as well as the other collusive commercial shorts---and the regulatory joke that is the CFTC---should all be sent to a Russian gulag. Here we are at close to the lowest silver prices of the past five years with no silver miner even thinking about a sell hedge, and these big COMEX commercial crooks are adding to their concentrated short positions. Both the big 4 and the big '5 thru 8' (unlike what has occurred in gold) now hold their largest short positions since early September when silver traded above $19."

Ted peg's JPMorgan's new short-side corner in the COMEX futures market at 12,000 contracts.

In gold, it was quite a bit different, as the headline number from the legacy COT Report showed that the Commercial net short position declined by 9,866 contracts, or 986,600 troy ounces.  The Commercial net short position is now down to 10.52 million troy ounces.

Here, in part, is what Ted had to say about gold--- "Despite the reduction, the total commercial net short position is still 50,000 contracts higher than the low point on Nov 11, which in turn was the lowest commercial short position since January. Since we’re also about 50,000 contracts lower than the high points of the commercial net short position of the past year, it would be appropriate to call the overall gold structure neutral."

"By commercial category, there was a slight twist from recent COT reports in that the raptors (the smaller commercials excepting JPMorgan in gold) were the big buyers this week, in adding 15,500 new longs; while the 8 largest commercial shorts added about 5,500 new shorts. This is the first time in a month that the 8 largest gold shorts added to their short position, although this position remains low historically. I will point out that despite the increase in the concentrated short position this week, both the big 4 and big 8 short positions are less than they were on Nov 11, when the total commercial net short position was 50,000 contracts lower and that must count as a positive."

On the other side of the Commercial traders---and under the hood in the Disaggregated Report, the Managed Money traders shed 4,484 long contracts and added 5,144 short contracts, for a total swing of 9,628 contracts.

Ted mentioned that JPMorgan increased their long side corner in the COMEX gold market by a chunky 7,000 contracts during the reporting week---and now pegs their short position around 17,000 contracts.

Because I was on the road for nine hours yesterday, I've cut and hacked the stories down to a fairly smallish number.

¤ The Wrap

For the last two years, in addition to the unusual turnover in COMEX silver inventories, the two most comparable and verifiable facts that stand out in gold and silver are the disparate results in ETF holdings and US Mint sales. Metal holdings in the big gold ETF, GLD, are lower by close to 50% from what they were two years ago, while holdings in SLV are still up slightly over that time (despite a near 20 million oz reduction over the past month). And there has been a notable counterintuitive movement in SLV holdings that has been lacking in GLD.

In terms of sales of Silver and Gold Eagles, there has never been a greater absolute and relative demand for Silver Eagles, while sales of Gold Eagles are down sharply from recent years. This year, for the first time ever, more money has been spent on Silver Eagles than have been spent on Gold Eagles and Gold Buffaloes combined. Demand for Silver Eagles accounts for 5.5% of annual world silver mine production, while the combined demand for Gold Eagles and Buffaloes accounts for 0.7% of world annual gold mine production. - Silver analyst Ted Butler: 27 December 2014

Although it's tempting to read something into yesterday's price action, I'll just chock it up to year-end book squaring for the moment.  Gold did manage to close above its 50-day moving average, but not by a lot---and although silver and platinum traded above their respective 50-day moving averages, they weren't allowed the luxury of closing there.  Here are the 6-month charts for all four precious metals.

As I write this paragraph, the London open is about 15 minutes away---and the precious metals aren't doing much of anything.  Except for silver, which is down 9 cents the ounce at the moment, the other three precious metals are trading flat.  Gold volume has barely broken the 8,000 contract barrier---and silver's net volume is 2,100 contracts.  The dollar index is up a handful of basis points---and trading a hair under the 90.00 mark.

Yesterday was the cut-off for Friday's Commitment of Traders Report---if we get a report on that day.  Unfortunately, we won't get the January Bank Participation Report until next Friday.

It's another day where I'm going to wrap early.  After spending nine hours on the road yesterday---and writing this column---I must admit that I'm one tired puppy.

And as fire the last column of the 2015 calendar year out the door at 4:20 a.m. EST, I see that gold, silver and platinum are all heading a bit lower---and palladium is actually up a buck on the day at the moment.  Net gold volume is right at the 10,000 contract mark---and silver's volume is 2,600 contracts.  Based on this, I wouldn't read much into the current price action, negative or otherwise.  The dollar index is up 3 basis points.

I will have a column tomorrow as a wrap on the year, but I'm not sure what time of day it will be posted, as I'm not sure at the moment as to when I'll even get started on it.

In any event, I wish you a happy and prosperous 2015---and I'm hoping that the precious metal gods will shine on us during the year, as the current supply/demand/price management situation can't go on forever.

See you tomorrow---sometime.

Ed Steer

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