Friday, May 22: Today in Gold and Silver

NEW YORK ( TheStreet) -- The gold price chopped around slightly above the unchanged mark until just after 1 p.m. in Hong Kong and then began to head lower, with the low tick coming minutes after 9 a.m. EDT.  It rallied a bit going into the London p.m. gold 'fix'---and from there it didn't do a lot.

The high and lows were reported by the CME Group as $1,212.40 and $1,200.80 in the June contract.

Gold closed in New York yesterday at $1,206.80 spot, down an even three dollars from Wednesday's close.  Net volume was very light at only 89,000 contracts.

It was virtually the same price pattern in silver---and with the metal trading in a twenty cent range all of yesterday, the high and low ticks aren't worth the effort to look up.

Silver finished the Thursday session at $17.13 spot, up 5.5 cents from Wednesday---and net volume was exceedingly light as well, only 19,500 contracts.

Platinum chopped around unchanged all through Far East and most of Zurich trading, but began to head south shortly before 2 p.m. Zurich time.  Like gold and silver, the low tick came a couple of minutes after 9 a.m. in New York.  From there it rallied back to almost unchanged, closing at $1,154 spot, down a buck from Wednesday.

Palladium chopped around five dollars either side of unchanged all day yesterday---and closed up 4 bucks at $779 spot.

The dollar index closed late on Wednesday afternoon in New York at 95.59.  It dropped 20 basis points in early Far East trading, but gained it all back---plus a few basis points more---by 2:30 p.m. Hong Kong time, and thirty minutes before the London open.  From there it began to head south, with the 95.01 low tick coming minutes after 11 a.m. BST in London.  But by shortly before 9 a.m. EDT, the index was back to 95.43---and after another 20 basis point up/down move, closed the Thursday session at 95.40---down 19 basis points on the day.

The gold stocks opened flat, but headed into negative territory to stay by 10:20 a.m. EDT.  Their lows came around 2:15 p.m.---and they struggled higher into the close.  The HUI finished down 0.36 percent---it's fifth losing session in the last six trading days.

The silver equities traded in a similar pattern---and almost managed to squeeze a positive close, but got sold back into the red about fifteen minutes before the equity markets closed.  Nick Laird's Intraday Silver Sentiment Index closed down 0.25 percent.

The CME Daily Delivery Report showed that zero gold and 30 silver contracts were posted for delivery within the COMEX-approved depositories on Monday.   JPMorgan stopped 17 of them---8 for its client account and 9 for itself.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Thursday trading session showed that gold open interest for May fell 42 contracts, leaving 82 still open.   Silver o.i. for May was unchanged at 289 contracts---less the 30 mentioned in the prior paragraph.

There were no reported changes in GLD yesterday---and as of 9:33 p.m. EDT yesterday evening, there were no reported changes in SLV, either.

Since yesterday was Thursday, Joshua Gibbons, the Guru of the SLV Bar List, updated his website with the goings-on at the iShares.com Internet site as of the close of business on Wednesday---and here is what he had to report.

Analysis of the 20 May 2015 bar list---and comparison to the previous week's list:  5,519,099.8 troy ounces were removed (almost all from Brinks London)---787,993.3oz were added---and none had serial number changes.

The bars removed were from: Henan Yuguang (1.7M oz), Inner Mongolia Qiankun (0.9M oz), Korea Zinc (0.6M oz), and 21 others.

The bars added were from: Kazzinc (0.3M oz), Solar Applied Materials (0.2M oz), and 4 others.

As of the time that the bar list was produced, it was overallocated 420.8oz.  All daily changes are reflected on the bar list.

After two days in a row of no sales, the U.S. Mint finally had something to say for itself.  They reported selling 6,000 troy ounces of gold eagles---2,000 one-ounce 24K gold buffaloes---and 340,000 silver eagles.

Over at the COMEX-approved depositories on Wednesday, there was hardly any gold activity worth mentioning, as only 500 troy ounces were received---and nothing was shipped out.  It was virtually the same in silver.  Nothing was received---and only 146,602 troy ounces were shipped out the door.

It was another monster day over at the gold kilo warehouses in Hong Kong on their Wednesday.  At Brink's, Inc. they reported receiving an eye-watering 24,015 kilobars---and shipped out an equally impressive 17,331 kilobars.  There was a small deposit at the Malca-Amit Far East Ltd. depository, as they took in 220 kilobars.  The link to all that activity, in troy ounces, is here.

I have the usual number of stories for a week-day column---and I hope there are a few in here that you consider worth reading.

¤ The Wrap

As I’ve written previously, there was no way that JPMorgan or anyone else could have acquired the equivalent of 350 million ounces or more in silver in the form of COMEX silver futures contracts. Enough observers and market participants now monitor the COT data (I think I’ve had some influence in this) that it would be impossible for a 70,000 contract net long position to go unnoticed, to say nothing about it being far above any position limits that the CFTC might ever institute. As it stands now, the concentrated net position of the four largest long traders in COMEX silver has rarely been above 25,000 contracts, so an individual trader holding 70,000 long contracts would seem impossible.

More to the point, it just isn’t conceivable that the potential selling and short selling capacity necessary to accommodate any trader to create and hold a 70,000 contract long position exists. In other words, if JPMorgan did make the decision four years ago to accumulate a massive long position in silver that I believe it did make, this bank was smart enough to know it couldn’t be done via COMEX silver futures. The only possible alternative was for the bank to acquire physical silver, which it did in spades. Not coincidentally, holding physical silver is the same best suggested way of holding silver that I (and many others) have long advocated. Admittedly, it is somewhat bittersweet to see JPMorgan adopt that advice. - Silver analyst Ted Butler: 20 May 2015

It was another down day yesterday, but volume was so light, not much should be read into the price action, although "da boyz" took another tiny slice off the gold salami.  And as much as I don't want to see it, I'm expecting more of this sort of price action in the future.  As I said the other day, the only thing we don't know is how low in price---and how long JPMorgan et al will take to get the job done.

Of course the critical 50-day moving averages are pretty close in both gold and silver, so the price pain shouldn't be all that great.  However, as Ted has drilled into me over the years, it's not the final price that's important, but the number of contracts involved.

Here are the 6-month charts for all four precious metals---and you can see the tiny slice in gold for yourself, as we made a new low for this current move down.

And as I write this paragraph, the London open is about ten minutes away.  Prices are marginally higher at the moment in gold, silver and platinum.  Palladium is unchanged.  Net gold volume is a bit over 10,000 contracts---and silver's net volume is only 2,700 contracts.  Based on these tiny volumes, nothing should be read into the current price action.  The dollar index has been sliding throughout all of Far East trading on their Friday---and bounced off the 95.00 level for the second time in less than twenty-four hours.  It's currently down 35 basis points.

Today we get the Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday---and as I said before, there should be massive deterioration in the Commercial net short positions in both gold and silver.  But these number will be somewhat tempered by the engineered price declines on Tuesday.   The other unknown is just how much of Tuesday's price/volume numbers will be in today's report, as not all the data may be reported in a timely manner.

Here's more of what Ted had to say about Tuesday's engineered price decline in his Wednesday commentary---and it's effect on today's COT Report… 

" So what about the big price smash on Tuesday? It looked like the same old HFT and spoofing bookie scam as always. The way it works is first the commercial bookies rig prices up thru the key moving averages and then the Pavlovian technical funds respond by buying futures contracts at the higher prices levels, as they did from last Wednesday thru Monday. Then the commercial bookies fix the game to the downside below the moving averages and the technical funds sell at the lower prices. That’s the essence of the COMEX silver and gold scam."

" What was somewhat different this time is that the move up and down was so compressed in the reporting week, that the COT report covering the turnaround won’t be published until Friday, thus resulting in the inability to rely on the COT report this time. I don’t think this was accidental, but rather deliberate. Considering that there had been significant managed money buying in COMEX gold and silver on the sharp move up last week, accompanied by equally significant commercial bookie selling, the current price weakness makes it clear that the bookies are inducing the technical funds to sell. This is what the CME crime syndicate is all about."

And as I file today's column at 5:15 a.m. EDT, I note that the prices of gold, silver and platinum spiked a bit very shortly after London opened.  Of course the not-for-profit sellers were there soon after---and are attempting to hammer these rallies flat, although the jury is still out on whether they'll be able to accomplish that. Palladium isn't doing a thing.

Net gold volume is a bit over 22,000 contracts at the moment, which is more than double what it was ten minutes before London opened---and silver's net volume is sitting at 6,100 contracts net, also more than double what it was the last time I reported on it more than two hours ago.

The dollar index bounced off the 95.00 level once again---and it appears that "gentle hands" are at work here.  Right now the index is down 38 basis points.

Since today is Friday, all bets are off as to how precious metal prices perform, or will be allowed to perform---and, as usual, nothing will surprise me when I check the charts later this morning.

Enjoy your weekend, or what's left of it---and I'll see here tomorrow.

Ed Steer

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