Tuesday, May 12: Today in Gold and Silver

NEW YORK ( TheStreet) -- Gold's weak rally attempt at the open of trading in New York on Sunday evening wasn't allowed to get far---and by the London open the price was down six bucks.  The price crawled higher into the noon London silver fix---and then rallied until a few minutes before the COMEX open.  JPMorgan et al, along with the HFT buddies, did the dirty the moment that London closed at 11 a.m. EDT, with the low tick of the day coming twenty minutes later.  The gold price rallied steadily from there, but ran out of gas just before the 1:30 p.m. COMEX close---and the price didn't do a thing after that.

The high and low ticks, which both occurred during COMEX trading, were recorded by the CME Group as $1,190.90 and $1,178.00 in the June contract.

Gold finished the Monday trading session at $1,183.50 spot, down an even four bucks from Friday's close.  Net volume was very light at only 91,000 contracts, so it wasn't difficult for any trading group with an agenda to what they wishes to the price---and that's exactly what they did.

Here's the 5-minute price tick chart for gold courtesy of Brad Robertson---and you can see the big volume spike on the engineered price decline by the HFT boyz and their algorithms. Midnight MDT is the dark gray vertical line.  Add two hour for EDT---and don't forget the ' click to enlarge' feature.

The silver chart looked the same as the gold chart, except the absolute low tick came twenty-five minutes after gold's low.

The high and low were reported as $16.55 and $16.20 in the July contract.

Silver closed in New York yesterday afternoon at $16.275 spot, down 12.5 cents on the day.  Net volume was 31,000 contracts---about the same net volume silver has traded at for the last five days in a row.

With some minor variations, platinum and palladium had similar price patterns as gold and silver, with the low ticks coming at the same time as gold.  Certainly nothing free market about any of this.  Platinum closed at $1,126 spot, down 13 bucks from Friday---and palladium finished the Monday session at $779 spot, down 19 dollars from Friday's close.  All of palladium's gains on Friday were taken away on Monday.  Here are the charts.

The dollar index closed late on Friday afternoon in New York at 94.77---and rallied a decent amount in Far East trading, hitting its 95.26 high tick just before lunch in Hong Kong on their Friday morning.  From there it chopped lower, finishing the Monday session at 95.04---up 27 basis points.  The folks over at ino.com show it closing down 16 basis points---and I have no idea how they arrived at that considering Friday's action.  I've included the 3-day USD index chart so you can see for yourself and arrive at your own conclusion.

The gold stocks opened basically unchanged---and flopped and chopped around either side of unchanged for the entire New York trading session.  The HUI managed to close up a tiny 0.17 percent, which is certainly better than the alternative.

The silver equities opened up---and stayed up, as Nick Laird's Intraday Day Silver Sentiment Index closed higher by a decent 1.69 percent.

The CME Daily Delivery Report showed that 1 gold and 166 silver contracts were posted for delivery within the COMEX approved depositories on Wednesday.  The three largest short/issuers were ABN Amro, Canada's Scotiabank and Mizuho---a Japanese bank.  The two largest stoppers were HSBC USA with 57 contracts in its in-house [proprietary] trading account---and JPMorgan with 46 contracts for clients---and 63 contracts for itself.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Monday trading session showed that gold open interest in May dropped by 7 contracts---and is now down to 149 contracts, minus the 1 posted above.  In silver, May o.i. contracted by 141 contracts---and is now down to 574 contracts remaining, minus the 166 contracts mentioned in the previous paragraph.

There were no reported changes in GLD yesterday---and as of 6:25 p.m. EDT, there were no reported changes in SLV, either.

I note that the folks over at shortsqueeze.com updated their website with the short positions of both GLD and SLV yesterday evening as of the close of trading on April 30---and this is what they had to report.

The short position in SLV increased by 10.95 percent from 18.53 million shares/troy ounces up to 20.56 million shares/troy ounces.  That's a hair over 639 tonnes of the stuff---and represents nine days of world silver production.

The short position in GLD declined by 9.14 percent from 1.53 million troy ounces, down to 1.40 million troy ounces.  That's a hair over five days of world gold production.

There was no sales report from the U.S. Mint on Monday.

Over at the COMEX-approved depositories on Friday, there was 33,128 troy ounces of gold reported received---but only 602 troy ounces were shipped out.  Virtually all of the 'in' action was at Canada's Scotiabank.  The link to that activity is here.

There was a lot of silver received, as 1,631,216 troy ounces were received---and 231,458 ounces were shipped out.  All of the in/out action was at CNT and Canada's Scotiabank.  The link to that action is here.

Over at the gold kilobar depositories in Hong Kong on their Friday, they received 5,271 kilobars---and 2,677 kilobars were shipped out.  All of the activity was at the Brink's, Inc. depository---and the link to this activity in troy ounces is here.

Here are a couple of charts that Nick Laird sent around yesterday evening.  They are the monthly intraday price movements for both gold and silver for the month of April.  Adding up and averaging the days in the month, there certainly wasn't much shape to April's price action in gold.  But the low of the day, on average, was the London p.m. gold fix---and the high, not surprisingly, was ten minutes after the COMEX open---and the negative bias between the London a.m. and p.m. fixes is still alive and well on this chart.

There was much more to the April goings-on in silver.  Like gold, silver's average April high was also shortly after the COMEX open.  The secondary low came at the London p.m. gold fix---and the absolute low coming at the close of electronic trading in New York.  Nothing free market about any of this, dear reader.

I have a lot of stories today---and I hope you can find the times to read the one you like.

¤ The Wrap

Does that mean we can’t move lower temporarily so that the commercials can fill the fuel tanks even more with additional technical fund shorts in both gold and silver?  Hey, this is a crooked market and only a fool would pretend to know the full extent of commercial treachery. But it would be a mistake to deny that the only setup that matters in gold and silver pricing, namely, the COMEX COT market structure is anything but exceptionally bullish. - Silver analyst Ted Butler: 09 May 2015

Well, another day---and another slice out of all four precious metals by JPMorgan et al and their HFT buddies.  Volume was very light once again---and with volume like that it is, as I said last week and further up, very easy for anyone with an agenda to push prices around, either up or down.

Here are the 6-month charts for all four---and you should note that silver is sitting right on its 50-day moving average.  Also worth noting is the price action in palladium during the last three business days.  As I pointed out at the top of today's column, there certainly isn't anything free-market about that price activity.

But despite the waterfall declines in both gold and silver, their respective equities both finished in the black on Monday---and I find that very encouraging.

And as I type this paragraph, the London open is about ten minutes away.  Except for a slight dip in early afternoon trading in Hong Kong on their Tuesday afternoon, not much happened in gold in the overnight hours.  Silver made a new low tick for this move down---and platinum and palladium aren't doing a thing.

Gold volume is a hair over 10,000 contracts---and silver's net volume is about 3,300 contracts.  about 99.9 percent of the volume in both metals is in their current front months, so it's all of the HFT variety.  Volumes were much lower earlier---and the tiny sell-offs in both metals popped their respective volumes by about 100 percent just in the last few hours.

The dollar index, which made it up to 95.15 in early Tuesday morning trading in Hong Kong, is currently down about 30 basis points off that high---and down 14 basis points from Monday's New York close.

Today, at the 1:30 p.m. EDT close of COMEX trading is the cut-off for this Friday's Commitment of Traders Report.  One hopes that all of today's price/volume data will be in it.

And as I hit the send button on today's column at 5:15 a.m. EDT, I see that the tiny rallies in gold and silver that began an hour or so before the London open, weren't allowed to get far---and both are trading virtually unchanged from Monday's close in New York.

Gold's net volume is now about 17,900 contracts, with a lot more roll-over activity now that London has been trading for a couple of hours.  Silver's net volume is just over 5,400 contracts.  These volumes are still very much on the lighter side.

Both platinum and palladium are up up a few bucks---and the dollar index has really taken a header, as it's down 61 basis points at the moment, and even more than that from its Far East high tick.

This swoon in the dollar index is certainly not being allowed to manifest itself in the prices of the precious metals.  That will only happen when JPMorgan et al allow it.  Just looking at the price action of the last hour or so, they still have these metals in a headlock in the COMEX futures market---and until that changes, nothing changes---regardless of what's going on in the currency market.

There's certainly a bit more price room to the downside if "da boyz" want to push it.  But as I said on Saturday, we're very close to the bottom as it is---and there can't be too many contracts left for JPMorgan et al to get from the technical funds in the Managed Money category.

If one cares to look into the future a bit, how high in price the next rallies in all four precious metals go, still boils down to the fact that it will be determined soley by whether or not the powers-that-be step in front of them or not.  Nothing else matters.

Based on what I see in the charts at the moment, it's far too early in the day to guess as to how trading action will unfold as the Tuesday session progresses.  But, as usual, it's a given that all the price/volume action that matters will occur after the 8:20 a.m. EDT COMEX open.

That's all I have for today, which is more than enough---and I'll see you here tomorrow.

Ed Steer

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