Saturday, May 23: Today in Gold and Silver

NEW YORK ( TheStreet) -- The gold price didn't do much in Far East trading on their Friday---and was up a couple of bucks by the London open.  Shortly after that, the gold price spiked about five dollars or so, but "da boyz" were there to make sure that things didn't get too far out of hand.  The price chopped sideways from there, but at precisely 8:30 a.m. EDT, the HFT boyz and their algorithms showed up---and thirty minutes later it was all over except for the crying.  Any of the smallish rally attempts after the 9:00 a.m. low were capped.

The high and low ticks were reported by the CME Group as $1,214.60 and $1,201.00 in the June contract.

Gold closed in New York yesterday afternoon at $1,205.90 spot, down 90 cents from Thursday.  Net volume was very much on the lighter side once again at 92,000 contracts.  Gold did not make a new low for this move down, but the Managed Money probably had to puke up all the longs they put on just before the London open earlier in the day.

Here's the New York Spot Gold [Bid] chart so you can see the precision of the timing of the HFT spoofing at both 8:30 and 9:00 a.m. EDT.

The silver price action was a carbon copy of the gold action, right down to the hits at precisely 8:30 and 9:00 a.m. EDT, so I shall dispense with the details.

The high and low were recorded as $17.335 and $16.94 in the July contract.

Silver finished the Friday session at $17.075 spot, down 5.5 cents from Thursday.  Net volume wasn't overly heavy at 28,000 contracts.

Platinum hit its Friday high early in the Zurich lunch hour---and by 9 a.m. in New York was down $17 from that high---and it only recovered a few dollars from there, closing at $1,146 spot, down 7 bucks on the day.

Palladium traded pretty flat until shortly after 10 a.m. in Zurich, but down it went as well---and its low was in by about 8:30 a.m. EDT.  It rallied a decent amount from there---and was into positive territory in afternoon trading in New York, but some kind soul made sure that it closed unchanged at $779 spot.

The dollar index closed late on Thursday afternoon in New York at 95.40---and began to head south almost the moment that trading began in the Far East on their Friday morning.  The 94.82 low tick came minutes after 11 a.m. in London---and by the 8:20 a.m. EDT COMEX open, it had crawled back just above the 95.00 level.  At that point someone hit the "buy the USD/sell precious metals" button---and in less than 70 minutes the index was at 96.22---and from there it chopped more or less sideways, but took a bit of a header in the last ten minutes of trading, finishing the day at 96.01---up just about 62 basis points.

Here's the 6-month U.S. dollar index chart so you can see the manufactured rally that the powers-that-be laid on us yesterday.

The gold stocks opened down a bit, but manged to poke their nose into positive territory for a brief moment between 10:30 and 11:00 a.m. EDT on a smallish rally in gold that was going on at the time.  But once that rally was capped, the stocks rolled over as well---and back into negative territory to stay.  The HUI closed down 0.87 percent.

It was more or less that same for the silver equities, except Nick Laird's Intraday Silver Sentiment Index closed down 1.05 percent.

Nick Laird said that the HUI was down 5.51 percent for the week---and his Intraday Silver Sentiment Index closed lower by 3.52 percent.

The CME Daily Delivery Report showed that zero gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.

The CME Preliminary Report for the Friday trading session showed that gold open interest in May fell by 6 contracts and is now down to 76 contract still open.  May silver o.i. dropped by 35 contracts, leaving 254 still to go.

I'm not sure if anything is open in the U.S. on Memorial Day or not.  If they aren't, it means that all these deliveries have to be done by Thursday at the latest, as Friday is first notice day for the June delivery month---so they've got exactly one business day left to get this all done.  Tuesday's Daily Delivery Report could prove interesting.

There were no reported changes in GLD yesterday---and as of 8:00 p.m. EDT yesterday evening, there were no reported changes in SLV, either.

There was a tiny sales report from the U.S. Mint on Friday.  They sold 500 troy ounces of gold eagles---and 500 one-ounce 24K gold buffaloes.

Month-to-date the mint has sold 15,000 troy ounces of gold eagles---7,000 one-ounce 24K gold buffaloes---and 1,648,500 silver eagles.  Based on these sales numbers the silver/gold ratio works out to 75 to 1.

It was another quiet day for gold over at the COMEX-approved depositories on Thursday.  Only 3,000 troy ounces were received---and nothing was shipped out.  It was ultra-quiet in silver as well.  Only 3,078 troy ounces were received---and 1,006 troy ounces were reported shipped out.

It was reasonably busy at the COMEX-approved gold kilo depositories in Hong Kong on their Thursday.  They reported receiving 4,250 kilobars---and 4,200 kilobars were shipped out.  All of the activity was at Brink's, Inc.  The link to that activity [in troy ounces] is here.

The Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday, was even more ugly than I imagined it could possibly be.  It was, as Ted Butler said in our phone call yesterday, " depressing."

Let me set the stage in gold.  During the the reporting week, we had four 'up' days---and one 'down' day, which was last Tuesday, the cut-off for yesterday's COT Report.  During the four 'up' days, gold gained, at best, $30-odd dollars---and gave up a hair over half of that on the one 'down' day.

During that reporting week, the Commercial net short position in gold blew out by an eye-watering 54,832 COMEX contracts, which is 5.48 million troy ounces of gold, which is the biggest 1-week increase in history.  The Commercial net short position now stands at 13.23 million troy ounces---a 70 percent increase in one week---and for what reason?  To bury a $30+ rally.  These guys are brutal.

The 'Big 4' traders added 17,700 contracts to their short position---and the '5 through 8' went short an additional 13,400 short contracts.  The other Commercial traders, Ted Butler's raptors, sold 23,700 long contracts.  It was the all-for-one-and-one-for-all "Three Musketeers" trading opposite the technical funds in the Managed Money category for fun, profit and price management.

Under the hood in the Disaggregated COT Report, the Managed Money added 28,099 long positions on that rally---and sold/covered 22,799 short contracts.  Once again, as Ted said, it's one group of traders selling to another that set the price---up and down.  It's the same old, same old.

It was the same in silver.  During the reporting week, we had four up days followed by a big down day.  During the four 'up' days, the silver price rose by about $1.25---and gave up almost half of that on the one big engineered price decline last Tuesday.

On those price moves on those five trading days, the Commercial net short position exploded by a stunning 24,382 contracts, almost 122 million ounces of silver in five trading days, or the equivalent of 53 days of total world silver production.  This is, by a very wide margin, the largest 1-week change in the Commercial net short position in silver in the history of the COMEX.

The 'Big 4' short holders added 6,600 contracts to their short position, but the '5 through 8' traders actually decreased their short position by 400 contracts.  However, the small Commercial traders, Ted's raptors, took up the slack by selling 18,200 long contracts for a profit.  Ted says the JPMorgan's short-side corner in the COMEX silver market is in the 19-20,000 contract range, which puts them up there with Canada's Scotiabank as the biggest COMEX silver short on Planet Earth.

Under the hood in the Managed Money category, the technical funds there added 8,554 long contracts and covered/sold 19,680 short contracts as the rally they started, unfolded during the reporting week.

Ted said the the COT Report in silver went from bullish to wildly bearish in just one week.  We now have the worst Commercial net short position in silver going all the way back to the end of December 2014.

If the Commercial traders hadn't been there to step in front of the Managed Money traders on this rally, we would be looking at a silver price of many hundreds of dollars---and a gold price of many thousands.  But, as always, JPMorgan et al were there to buy enough short contracts and sell enough long contracts in order to kill these rallies stone-cold dead.  This is what JPMorgan calls adding "liquidity" to the markets.  I call it price rigging---and you can call it what you want.

To be fair however, the reason that this report was such a standout in both gold and silver was the confluence of two separate events.  The first was a big rally the day before the cut-off at the start of the reporting week---and and the big engineered price decline on Tuesday to end the reporting week.

It's my opinion that some of the data from the rally the day before the cut-off for this week's COT Report [Tuesday, May 12] got shoved into this reporting period---and not all of the data from Tuesday's big engineered price decline was reported in a timely manner, either.  The confluence of those two events made this week's report one for the record books---and I'll be surprised if its ever broken.

This is the Reader's Digest version of the reporting week's events---and I'll be looking forward to what Ted has to say about all this in his weekly report to paying subscribers this afternoon EDT.

Here's Nick Laird's " Days of World Production to Cover COMEX Short Positions" in all physically traded commodities on the COMEX.  Please note that the eight largest traders in silver are now short the equivalent of 6 months world silver production.  It's my estimation that JPMorgan and Canada's Scotiabank are currently short around 90 days of world silver production between them.

It was another busy week over at the Shanghai Gold Exchange for the week ending on Friday, May 15---as they reported that 45.480 tonnes were withdrawn.  A hair over 900 metric tonnes have been withdrawn from the SGE since the start of the year.  Here's Nick Laird's most excellent chart.

I have a decent number of stories for a weekend column, so I hope you can find the time in what's left of it to read the ones you like.

¤ The Wrap

It must be remembered that the crooked bookmaking operation in COMEX silver is visible in many ways. For one, it is reflected in the fact that the biggest 4 and 8 commercial bookies have always held such a dominant control on the market that COMEX silver has the largest concentrated short position of any regulated commodity in terms of real world production or consumption. I know this has been true just about forever and because of that longevity, the shock value of what it represents gets diminished over time. But now with silver down close to 70% from the highs of 2011, the existence of the most concentrated short position of all commodities should be a much bigger deal than it ever was before.

The simple fact is that there is no economic justification for a commodity down in price as much as silver---and at or below the primary cost of production to have a larger concentrated short position than any other commodity. This is particularly true when no legitimate producer holds any of the concentrated short position; only large banks and financial institutions engaged in a bookmaking scam.

Because the silver bookmaking scam is becoming more clear to observers on a daily basis, I am becoming more convinced the scam is about to blow up and with it, the ongoing manipulation of the price of silver. If what I’ve just described is close to being accurate (and I believe it is completely accurate), the end game resides in my recent discovery that JPMorgan has acquired hundreds of millions of ounces of actual silver. - Silver analyst Ted Butler: 20 May 2015

Today's pop 'blast from the past'  was composed in 1946.  It was recorded by many artists, however it wasn't a hit until Bobby Darin recorded it back in 1958---but it wasn't released until 1959.  This youtube.com video clip [in B&W] shows him with a very young Dick Clark.  The link is here.

Today's classical 'blast from the past' is known by just about everyone on Planet Earth.  The work is  best known for its last movement, but the other movements are equally as wonderful if your a classical music affectionado.  It's the overture from Rossini's opera William Tell that was premiered in 1829.  The overture is in four parts, each following without pause.  It's performed here by the Berlin Philharmonic---and they serve it up just right.  It's worth your while---and the link is here

Yesterday's price action in the precious metals had all the hallmarks of another engineered take-down in precious metals by JPMorgan et al.  It should be obvious that they don't give a flying %$#& about the fact that they're about as subtle as a brick through a plate glass window.

Here are the 6-month charts for all four precious metals updated with Friday's price/volume data.

In last Saturday's missive I gingerly made these comments about the current state of the rallies in both gold and silver  " Excuse me for thinking this, but the price action of the last couple of days has all the hallmarks of a top [hopefully temporary] in these rallies.  In addition to the cooling-off in the precious metal prices themselves, their associated equities have not exactly been roaring to the upside.  The charts below look toppy to me, as does the HUI."

In hindsight, and with the current COT numbers staring us in the face, I didn't know how right that statement would turn out to be.  And the fact that "da boyz" pulled it off in less than five trading days---and on such tiny rallies in both silver and gold---should indicate that they're not going to allow precious metal prices to go anywhere at the moment.

I have to qualms about stating the fact that current COT structure, even discounting it a bit for Tuesday's non-reported data, should scare the bejesus out of anyone.  It certainly does me.  The stage is set for a brutal take-down in the prices of gold, silver and platinum.  The only question remaining is will it be by one single thrust, or death by a thousand cuts?  I'd bet money on the latter, as "da boyz" can slice these precious metal salamis all summer long, all the while ringing the cash register in the process and declaring that the "summer doldrums" in the precious metals are upon us once again---doldrums that they themselves manufactured.

What a crock.

Looking at the above charts, seventy bucks or more in gold is not out of the question, as is two dollars in silver.  Remember, it's not the price, but the number of contracts.  Over the next few months JPMorgan et al will probably keep engineering prices lower until we reach some sort of capitulation at the end of the process.  This is their standard operating procedure.  That will occur, as it always does, when the Commercials have forced the Managed Money players to sell as many long contracts as possible---and enticed them to go as short as possible.  We've been down that road many times in the last four years, so you should know the drill by now.

The miners, the World Gold Council, The Silver Institute, GFMS, CPM Group et al---know it too, but pretend that it's not happening.  But we're so far down the road on this that they can't admit it now, or even make mention of it.  That includes the CFTC and the CME Group, which Ted Butler says, are actually enabling all of this.

The price management scheme in the precious metals is by far the most important criminal activity that the banks are involved in---as the ramifications of a free-market price in precious metals in particular---and commodities in general---would bring the entire world's economic, financial and monetary system to its knees overnight.

It's Jim Rickards " Currency Wars"---and the " Death of Money"---on steroids.  It will end in time, of course, but for the moment the war against the producing class by the West's financial elite goes on.  I consider it to be a line item in the Wolfowitz Doctrine as well.

The Russians and Chinese are more than aware of all of this---and if push really becomes shove, you just never know what might happen.

That's all I have for the day---and the week.  If the precious metal markets are open on Monday, I'll certainly have a report on Tuesday.

Enjoy what's left of your weekend---and I'll see you then.

Ed Steer

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