Thursday, May 21: Today in Gold and Silver

NEW YORK ( TheStreet) -- After the the two hour sell-off going into the London open, the gold priced inched higher until shortly after the p.m. gold fix was in at 10 a.m. EDT in New York.  After that it chopped quietly sideways into the close.

Once again the high and low ticks aren't worth my effort to look up.

Gold finished the Wednesday trading session at $1,209.80 spot, up $1.80 from Tuesday's close.  Net volume was on the lighter side at 101,000 contracts, with almost a third of that coming before the London open.

It was more or less the same price action in silver, but the obvious sell-off of the quiet rally that occurred at 10:30 a.m. EDT really stands out---and from there it got sold back to unchanged by 3:30 p.m.  It traded flat into the close of electronic trading.

The high and low ticks were reported by the CME Group as $17.28 and $16.935 in the July contract.

Silver closed yesterday at $17.075 spot, up a half a cent.  Net volume was 29,500 contracts.

Here's the New York Spot Silver [Bid] chart from yesterday---and you can see for yourself how precise the timing was of the smack-down in the smallish silver rally at 10:30 a.m. yesterday.  The pop in price at the release of the Fed minutes was taken away as well.

Platinum also got sold down a bit going into the London open, but recovered within an hour or so before chopping sideways for the remainder of the Wednesday session.  Platinum finished the day at $1,154 spot, up 5 bucks from Tuesday.

Ditto for palladium, but the subsequent rally off its pre-London open low tick got dealt with at the COMEX open.  It's low came at noon EDT---and it managed to close up only a dollar from Tuesday at $775 spot.

The dollar index closed late on Tuesday afternoon in New York around 95.30---and although it made it as high at about 95.80 in late afternoon trading in Hong Kong on their Wednesday afternoon, it fell back to around the 95.50 mark after the London open---and chopped sideways for the rest of the Wednesday session, closing at 95.59---up only 9 basis points on the day.

The gold stocks opened up a bit---and chopped sideways until minutes before the Fed minutes were released at 2 p.m. EDT.  They powered higher from there, but willing sellers showed up about 2:30 p.m. as the gold price sagged a few dollars---and by the time the equity markets closed in New York yesterday, most of those gains had vanished, as the HUI closed up only 0.13 percent.

The silver equities traded more or less in the same pattern---and the sell-off at the 10:30 a.m. EDT is obvious on the chart below, as is the up/down pattern after the Fed minutes were released.  Nick Laird's Intraday Silver Sentiment Index closed up 0.63 percent.

The CME Daily Delivery Report showed that no gold or silver contracts were posted for delivery within the COMEX-approved depositories on Friday.

The CME Preliminary Report for the Wednesday trading session showed that gold open interest in May fell by 15 contracts, leaving 124 still open.  Silver o.i. dropped by 8 contracts, which still leaves 289 left.

There was another withdrawal from GLD yesterday.  This time it was 99,510 troy ounces.  Since May 1 there has been 765,356 troy ounces of gold removed from GLD---and not a single troy ounce deposited.  And as of 9:52 p.m. EDT yesterday evening, there were no reported changes in SLV.

The folks over at Switzerland's Zürcher Kantonalbank updated their website with the changes in both their gold and silver ETFs for the week ending Friday, May 15---and this is what they had to report.  Their gold ETF added 4,234 troy ounces---and their silver ETF increased by 49,672 troy ounces.

For the second day in a row there was no sales report from the U.S. Mint.

There wasn't a lot of activity in gold over at the COMEX-approved depositories on Tuesday.  They only received 4,600 troy ounces---and shipped 99 ounces out the door.  It was much busier in silver as 783,763 troy ounces were reported received, but only 6,250 troy ounces were shipped out.  All the 'in' activity was at the CNT Depository and Canada's Scotiabank.  The link to that action is here.

It was another frantic day at the gold kilobar depositories in Hong Kong on their Tuesday.  They received 9,158 kilobars---and shipped out 10,588 kilobars.  These are huge amounts of gold, dear reader---and the link to that activity in troy ounces is here.

Since yesterday was the 20th of the month, the folks over at The Central Bank of the Russian Federation updated their Internet site with April's data.  It showed that they added 300,000 troy ounces of gold to their reserves, which now stands at 40.1 million troy ounces.  Here's Nick's most excellent chart showing the change.

I have a decent number of stories for you today---and I'll happily leave the final edit up to you once more.

¤ The Wrap

Where do I get off accusing the COMEX and CME of running a crooked shop whether you call it market making or a bookie operation? For nearly 30 years I’ve argued that COMEX silver has facilitated the silver manipulation in violation of the terms of commodity and interstate commerce law; but let me do so today in terms of what constitutes a crooked bookie. If there’s one thing in which no one would disagree, a bookie would be considered unquestionably crooked if he took measures to ensure the outcome of a sporting event, such as paying players in a college basketball game to deliberately shave points in a game or otherwise perform badly enough to affect the outcome. In essence, that’s exactly what the COMEX has encouraged in silver. How so?

First, if a bookie never lost when he took a big line on any sports event that should raise suspicions of rigged games. After all, there is no way a freely contested event could always fall within the odds to the bookie’s favor. Let me stop here and agree that it’s not the COMEX or the CME taking the bets that never lose, but certain favored members, like JPMorgan and other large institutions. The CME provides the infrastructure that enables the real bookies to take the bets of speculators (technical funds) in silver, gold, copper and other commodities. The CME gets kickbacks from everyone who places bets on the COMEX, but sees to it that the most favored member bookies always win.

Data from the federal commodities regulator, in the form of the weekly Commitments of Traders Report (COT) confirm that the biggest bookies, like JPMorgan, have never, to my knowledge, incurred any losses in taking the other side to what the technical funds have ever bet. Some smaller bookies or commercial traders have suffered a rare setback or two over the years, but the biggest silver bookies, like JPMorgan? Never have they lost. That’s the sure sign that the COMEX silver game is fixed –  when the biggest bookies never lose. - Silver analyst Ted Butler: 20 May 2015

Except for the dip in all four precious metals in the two hours leading up to the London open, all was quiet yesterday in the precious metal market.  Even the tiniest hint that prices might rally was met by a willing seller, probably of the HFT variety.  And the FOMC minutes release at 2 p.m. EDT had no impact on p.m. prices.  For a change, all was quiet on the currency front as well.

Here are the 6-month charts for all four precious metals as of the close of trading on Wednesday.  There's not much to see---and I'm just sitting here waiting for the other shoe to drop, as I don't believe that this engineered price decline that started on Tuesday is close to being over---although I'd love to be spectacularly wrong about that.

And as I type this paragraph, the London open is about ten minutes away.  The gold price certainly didn't do much in Far East trading on their Thursday---and just about the same can be said of the other three precious metals as well.  Silver is up 8 cents---and palladium is up 2 bucks.

Net gold volume is a hair over 14,000 contracts at the moment, which is fairly decent for this time of day---and about ten percent of the gross volume is roll-overs out of the June contract.  Silver's net volume is a handful of contracts under the 3,000 mark.  The dollar index, which has been chopping sideways in a pretty tight range over the last twenty-four hours, is flat at the moment.  Nothing to see here, either.

Tomorrow we get the latest Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday---and as I expected, Ted didn't want to be nailed down as to what the report might say, either.  Here's a paragraph on this issue from his mid-week column yesterday---" I’m not even sure what the COT report will show on Friday. Before Tuesday’s price smash, I would have assumed an extreme increase in the total commercial net short position, along the lines of what I mentioned on Saturday (40,000+ in gold and 10,000 to 20,000 contracts in silver), although surprises were possible. [But] after Tuesday, I would have assumed some moderation in those expected increases, but that’s the problem with sharp up and down moves within the reporting week, namely, it scrambles objective analysis."

And as I send today's column off to Stowe, Vermont at 5:15 a.m. EDT, I see that the dollar index made it as high as 95.65 around 2:30 p.m. Hong Kong time, thirty minutes before the London open---and has been heading lower ever since.  At the moment it's down 50 basis points from Wednesday's close in New York.

However, this is not being reflected in the gold price, as it's trading basically unchanged at the moment.  Net volume is just under 22,000 contracts, which isn't overly heavy.  Silver is up a dime---and volume is just over 4,400 contracts, which is also on the lighter side. Platinum and palladium are up a couple of bucks each.

I must admit that I have no clue as to what may be in store for the precious metals for the remainder of the Thursday trading session, but as is usually the case, any price action of significance will occur once the COMEX opens at 8:20 a.m. EDT in New York.

That's all I have for today---and I'll see you here tomorrow.

Ed Steer

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