Friday, May 1: Today in Gold and Silver

NEW YORK ( TheStreet) -- The gold price did nothing in Far East trading---and once the dollar index began to head south with a vengeance, it was obvious that JPMorgan et al were there to prevent the price from breaking out to the upside.  It managed to rally above unchanged going into the jobless claims number at 8:30 a.m. EDT, but the HFT boyz and their algorithms were there with their jackboots---and that as they say, was that.  The low tick came at the London p.m. gold fix---and from there it rallied quietly and unsteadily into the 5:15 p.m. close of electronic trading.

The high and low ticks were reported by the CME Group as $1,207.40 and $1,176.00 in the June contract.

Gold finished the Thursday session at $1,184.00 spot, down $20.60 from Wednesday's close---and well off its low.  Net volume was monstrous at 204,000 contracts.

Here's gold's 5-minute tick chart---and you can tell at a glance that all the volume that mattered occurred between 6:30 a.m. and 11:30 a.m. Denver time on this chart---add two hours for EDT.  The volume spike at the 1:30 p.m. EDT COMEX close intrigues me, as it stands out like the proverbial sore thumb that it is.  Don't forget to ' click to enlarge' feature.

The trading day in silver was identical, so I'll spare you a repeat of what I just said about gold.  But from its 10 a.m. EDT low, the silver price rallied smartly into the 1:30 p.m. COMEX close---and then chopped sideways for the remainder of the New York session.

The high and low ticks were recorded as $16.73 and $15.80 in the new front month, which is July.

Silver closed yesterday at $16.10 spot, down 44 cents---and well off its low tick.  Not surprisingly, net volume was pretty decent at 58,000 contract, which was about the same volume as Wednesday.

Platinum and palladium were hit by the HFT traders at the same time---and in the same way, as gold and silver.  Both finished well off their low ticks, too.  Platinum finished the day at $1,142 spot, down 11 bucks---and palladium closed yesterday at $776 spot, down only 4 dollars.  Here are the charts.

But platinum and palladium were a side show.  JPMorgan et al were after gold and silver in general, but silver in particular.

The dollar index closed late on Wednesday afternoon in New York at 95.21---and chopped quietly higher until its 95.40 high tick, which came a minute or so after 2 p.m. Hong Kong time on their Thursday afternoon.  It began to head lower from there, but really got its lights punched out starting at 8:20 a.m. in London trading.  The 94.40 low tick came just under an hour later at 9:15 a.m. BST.  It chopped higher from there, before catching a bit of a bid just before 8:30 a.m. EDT.  The New York high of around 95.37 came shortly after the equity markets opened in New York---and then it chopped lower---and was in real danger of taking out its London low shortly before 3 p.m. EDT.  But "gentle hands" appeared---and it crept higher into the close.  The index finished the Thursday session at 94.81---down an even 40 basis points on the day.

Needless to say, there was absolute no correlation between the dollar index and the precious metals on Thursday, as the powers-that-be had them in a headlock.

Here's the 6-month dollar index chart---and as you can tell, it's approaching oversold territory.  But as you can also tell from the chart, it can stay oversold for a long time---maybe for the same length of time or longer than it was overbought.  Time will tell.

The gold stocks opened down a bit over 3 percent---and then traded in a one percent or so price range, before rallying a hair into the close.  The HUI finished the Thursday session down 2.94 percent.

The silver equities followed an identical price path---and despite the fact that silver cut its Thursday loss in half by the close, the shares closed virtually on their lows of the day, as Nick Laird's Intraday Silver Sentiment Index got smacked for 3.85 percent.

The CME Daily Delivery Report for Day 2 of the May delivery month showed that zero gold and 302 silver contracts were posted for delivery within the COMEX-approved depositories on Monday.   The biggest short/issuer in silver was JPMorgan out of its client account with 177 contracts---and in very distant second place was R.J. O'Brien with 58 contracts out of its client account as well.  The biggest long/stopper was JPMorgan once again, with 85 contracts for its client account---and another 89 for its in-house [proprietary] trading account.  In second place was HSBC USA with 75 contracts for its in-house [proprietary] trading account as well. The link to yesterday's Issuers and Stoppers Report is here---and it's worth quick look.

The CME Preliminary Report for the Thursday trading session showed that gold open interest for May remained unchanged at 226 contracts---and silver's o.i. dropped by 1,667 contracts down to 1,704 contracts still open, minus the 302 mentioned above.

There were no reported changes in GLD yesterday---and as of 9:51 p.m. EDT yesterday evening, there were no reported change in SLV, either.

Since yesterday was Thursday, Joshua Gibbons, the Guru of the SLV Bar List, updated his website with the goings-on over at the iShares.com Internet site for the reporting week ending on Wednesday---and here is what he had to say… 

" Analysis of the 29 April 2015 bar list, and comparison to the previous week's list: 4,302,220.0 troy ounces were added (all to JPM New York), no bars were removed or had serial number changes."

" The bars added were from: Solar Metals (3.0M oz), Asahi Pretec (0.1M oz), and Noranda (0.1M oz).  As of the time that the bar list was produced, it was overallocated 361.3 oz."

" A 2,963,810.8 oz withdrawal on Tuesday is not yet reflected, and should be on next week's list."

There was a small sales report from the U.S. Mint yesterday, as they sold 3,000 troy ounces of gold eagles---and that was all.

A Reuters story yesterday had this to say about U.S. gold eagle sales---" The U.S. Mint's sales of America Eagle gold coins in April fell 37 percent from March, while 2015 sales so far have dropped for the second straight year, government data showed on Thursday. The Mint said it sold 29,500 ounces of American Eagle gold coins in April, down from the 46,500 ounces in March but still well above the 18,500 ounces in February.  Sales for the first four months of the year have reached 175,500 ounces, down 3.6 percent from the first four months of 2014"

Of course there's not a word mentioned about the frantic pace of silver eagle sales---and why they continue to sell more dollars worth of them than gold eagles.  As of the end of April, the U.S. Mint had sold 14,922,500 of them, down from the 17,448,000 they sold in the same period in 2014.   The mint continues to produce silver eagles far in excess of U.S. yearly silver production.

Over at the COMEX-approved depositories on Wednesday, they reported receiving 32,116 troy ounces of gold, with virtually all of it going into HSBC USA.  Nothing was shipped out---and the link to that activity is here.

In silver, only 993 ounces were received---and 933,021 troy ounces were shipped out.  About 90 percent of the withdrawal came from Brink's Inc.  The link to that action is here.

There was also a decent amount of activity at the gold kilo depositories in Hong Kong---and it was all at Brink's, Inc. once again.  There were 1,668 kilobars received---and 8,918 kilobars shipped out.  The link to that activity in troy ounces is here.

I have the usual number of stories---and I hope you'll find a few that interest you.

¤ The Wrap

Even though I am the fountain source of the JPM physical silver accumulation premise, I also recognize that doesn’t confer on me the divine light of prophecy in this matter. On the other hand, 30 years ago, when I first uncovered the COMEX silver scam and how the concentrated short position explained the ultra-depressed price, one of my very first thoughts was to imagine what the price of silver would be if the COMEX commercial crooks could ever assemble as large a long position as their concentrated short position. (Why not $1,000 an ounce I asked myself).

As it turns out, the concentrated short position of the 8 largest shorts (including JPMorgan) is just as large as it has always been - more than 320 million oz in the latest COT report, of which JPM holds maybe 75 million oz by my calculations (next week’s Bank Participation Report will help clarify this).   What’s different at this point, of course, is if JPMorgan holds the 350 million physical silver ounces I claim, that’s a completely different circumstance from what existed in the past. The other 7 big shorts might turn out to be in a world of hurt should silver prices explode forthwith, but not JPM. One thought I can’t shake is that historic price moves in anything generally entail big winners and losers, along with a certain amount of double crossing at the highest levels. That setup certainly exists in silver currently. - Silver analyst Ted Butler: 29 April 2015

Well, there was no salami slicing yesterday, as JPMorgan et al put away the carving knives---and took out the axes.  And with the thinnest cover story imaginable, jobless claims, they did the dirty in spectacular fashion, starting at 8:30 a.m. EDT.  No subtly here, as this was as in your face as you'll ever see.

In one fell swoop they undid all the Commitment of Traders damage that occurred on Monday and Tuesday---and put the numbers back pretty much where they were at the close of trading last Friday.  The HFT boyz spun their algorithms and as the key moving averages were hit---50 and 20-day---the brain dead technical funds in the Managed Money category sold longs---and went short.  It was all paper trading on the COMEX---and the fact that JPMorgan et al were all done to the downside by the London p.m. gold fix, makes it doubly damning.

And you have to wonder what the rush is that they're making no attempt to hide their tracks.

Here are the 6-month charts for all four precious metals courtesy of stockcharts.com---and it's a whole new ball game, as we're pretty much back to wildly bullish in silver---and more or less the same in gold.

And as I write this paragraph, the London open is less than five minutes away.  All four precious metals aren't doing much from a price perspective.  Two are up a hair---and two are down the same amount.  Gold volume is vanishingly small at 8,500 contracts---and silver's net volume is 1,860 contracts.  There's not a thing going on out there---and there isn't an HFT trader or algorithm in sight.  The dollar index barely moved in Far East trading on their Friday---and is currently up 3 basis points.

One casualty of yesterday's drive-by shooting is today's Commitment of Traders Report, as it's a certainty that the data in it is already yesterday's news.  I'll report on it tomorrow, but after Thursday's price action, it's basically irrelevant, unless it contains some sort of hidden surprise.

While on the subject of drive-by shootings, today is the fourth anniversary of JPMorgan et al's drive-by shooting on May 1, 2011 that started this 4-year price decline---and enabled JPMorgan to amass such a huge holding of physical silver.  That's why that CPM Group article about silver in the Critical Reads section above is such bulls hit---and anyone that knows anything about the silver market, including the miners, knows it is as well.  But they're all pretending that this 800-pound gorilla just doesn't exist.

And as I send today's offering into cyberspace at 5:15 a.m. EDT, I note that not much has changed since I reported on things a bit more than two hours ago.  With the exception of silver, which is up a whole 6 cents at the moment, the other three precious metals are a tad lower than they were earlier.

Gold volume is now up to 14,000 contracts net---and silver's net volume is now a hair over 3,800 contracts.  Still pretty light.

The dollar index rolled over---and at one point was down 25 basis points, but has cut the loss in half and is only down 14 at the moment.

The HFT boyz ended April on an ugly note---and I have no idea as to how the first day of trading in the new month will unfold, but it's a near certainty that any price/volume action that matters will occur during the COMEX trading session.

Is there more room to the downside?  Sure, I suppose, but it's not much if there is---and attention should now be turned in the direction of how the next rally will unfold, or be allowed to unfold.  The last one that started on Monday---and made it part way through Wednesday, got dealt with in the same old way, as JPMorgan et al appeared as sellers of last resort once again---and it remains to be seen if the next rally suffers the same fate.

So we wait some more.

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.

I'm off to bed.

Ed Steer

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