Gold & Silver Daily
"In silver, the price closed below its critical 50-day moving average"
 

¤ Yesterday In Gold & Silver

The gold price didn't do much until about 1:30 p.m. Hong Kong time on their Wednesday afternoon.  From there the price declined into the London a.m. gold fix.  It rallied a hair from there until "da boyz" showed up minutes before 12:30 p.m. EDT---and in short order they'd peeled another ten spot off the price.  The price rallied a bit until 2 p.m. EDT---and then didn't do a lot after that.

Gold finished the Wednesday session in New York at $1,185.00 spot, down $7.70 from Tuesday's close.  Net volume, which was almost all of the HFT variety, was around 118,000 contracts.

The high and low ticks were reported by the CME Group as $1,195.60 and $1,179.10 in the August contract.

Here's the 5-minute tick gold chart from yesterday, courtesy of reader Brad Robertson---and you can see the big volume spike associated with the engineered price decline during the New York lunch hour yesterday.  Midnight EDT is the dark gray vertical line---and you have to add two hours for EDT, as this chart is scaled for MDT.  The 'click to enlarge' feature really helps as well.

The silver price was pretty comatose up until around 1:30 p.m. Hong Kong time on their Wednesday afternoon as well.  At that point it developed a negative bias---and that culminated in a down/up move courtesy of the HFT boyz during the New York lunch hour, the same as gold.  From its low at 12:45 p.m. EDT, the silver price rallied quietly until around 3:30 p.m., before getting sold down a hair into the close of electronic trading.

The high and low ticks were recorded as $16.795 and $16.375 in the July contract.

Silver finished the Wednesday session at $16.475 spot, down 27 cents on the day.  Net volume was pretty decent at around 38,000 contracts---and there was big roll-over action out of July, as gross volume was way up there at 74,838 contracts.

In most respects the platinum chart was just a variation of the gold and silver charts, with the low tick coming shortly before 1 p.m. in New York.  Platinum was closed at $1,101 spot---down 9 bucks from Wednesday, the same closing price as on Monday.  You should note that the $1,100 spot level has been tested for three days in a row---and it's still holding---for now, that is.

Ditto for palladium---and at its 12:45 p.m. EDT low tick, it was down $16 on the day.  It recovered a bit and closed at $756 spot, down an even 10 dollars from Tuesday.

The dollar index closed late on Tuesday afternoon in New York at 95.95---and poked its nose ever-so-briefly above the 96.00 level in early Far East trading before heading lower.  'Gentle hands' showed up around 2:35 p.m. Hong Kong time on their Wednesday afternoon---and by the time the rally was done by around 8:55 a.m. in New York, the index was back around the 96.34 mark.  It got sold off at that point, with Wednesday's absolute low tick of  95.28 coming at noon on the button in new York.  It rallied a hair during the remainder of the trading session and closed down 42 basis points at 95.37.

Here's the 1-year U.S. Dollar chart so you can keep an eye on the bigger picture.

The gold stocks got close to breaking into the black shortly after the London p.m. gold fix---and then headed lower until 12:45 p.m. at gold's engineered price low.  From there they chopped a hair higher into the close, as the HUI finished the Wednesday session down an even 2.00 percent.

The silver equities actually did make it into positive territory for around an hour, but after that, the price pattern was identical to the HUI's---however their post-low recovery was a hair more robust than their golden brethren.  Nick Laird's Intraday Silver Sentiment Index closed down 'only' 1.19 percent.

The CME Daily Delivery Report for Day 4 of the June delivery month showed that 10 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Friday.   The only short/issuer was JPMorgan out of its client account.

The CME Preliminary Report for the Wednesday trading session showed that 518 gold contracts disappeared into thin air yesterday, as the new o.i. number is now down to 1,544 contracts.  And for the third day in a row, June open interest remained unchanged at 33 contracts.

There were no reported changes in GLD---and as of 9:10 p.m. EDT yesterday evening, there were no reported changes in SLV, either.

There was another sales report from the U.S. Mint, the fourth in a row.  They sold 3,000 troy ounces of gold eagles---500 one-ounce 24K gold buffaloes---and another 150,000 silver eagles.

In the last four business days the mint has sold 1,302,000 silver eagles, but only 16,000 troy ounces of gold eagles and one ounce gold buffaloes combined.  Ted's big buyer, JPMorgan, appears to be still there---and he mentioned that in his mid-week commentary to his paying subscribers yesterday.

It was another quiet in/out day in gold at the COMEX-approved depositories on Tuesday, as nothing was received---and only 2,339 troy ounces were shipped out.   But silver more than made up for it as 1,196,312 troy ounces were reported shipped in---and 618,352 troy ounces were sent out the door.  The link to the silver action is here.

Over at the COMEX-approved gold kilobar depositories in Hong Kong on their Tuesday, they received 5,119 kilobars---and shipped out 6,319.  As usual, all of the activity was at Brink's, Inc.  The link to that, in troy ounces, is here.

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

 

¤ Critical Reads

‘Freedom Act will make no difference’ to NSA surveillance

The only practical effect of the U.S. Freedom Act will be that now the NSA has to file a request to the court to get data from the telephone companies, but the same volume of NSA spying will remain, says Ted Rall, a political cartoonist and author.

The U.S. Senate has passed the so-called U.S. Freedom Act, the first surveillance reform in a decade in America. It comes just over a day after the infamous Patriot Act that provided legal grounds for the National Security Agency's snooping expired.

RT: The Freedom Act has been passed, is it a step in the right direction? There have been claims by some US lawmakers that it does not go far enough, what's your take?

This worthwhile story showed up on the Russia Today website at 1:29 p.m. Moscow time on their Wednesday afternoon, which was  6:29 a.m. EDT in Washington on their Wednesday morning.  Today's first article is courtesy of Roy Stephens.

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Companies' Borrowing Spree Darkens Stock Market Future

A dark shadow is lurking behind the happy façade of rising stock prices.

U.S. companies are borrowing money faster than they’re earning it -- and they’re doing it at the quickest pace since the aftermath of the financial crisis.

Instead of deploying the debt to build factories, hire new workers or expand product lines, companies are funneling more of their money to shareholders or using it to fund deals. Stock buybacks reached an all-time high last year and the volume of global mergers and acquisitions announced so far this year would make it the second-busiest ever, according to data compiled by Bloomberg.

The debt undermines future growth and could dent company income when borrowing costs rise. Higher interest rates will make already indebted companies less desirable to lend to. The consequence: profitability, buoyed by cheap money since rates went to near-zero in 2008, will sink.

There's nothing really new here, but I though it worth posting nonetheless.  This item appeared on the Bloomberg website at 10:00 p.m. Denver time on Tuesday evening---and I thank West Virginia reader Elliot Simon for sharing it with us.

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Electronic trading brings great benefits: CFTC's Massad

Timothy Massad, CFTC Chairman, discusses oil market volatility, and electronic trading.

This brief 1:54 minute CNBC video clip appeared on their website around 2 p.m. EDT yesterday afternoon.  I passed it by Ted---and he said that "---great benefits to who? Perhaps HFT manipulators but certainly not silver or gold investors, or commodity producers in general---very telling."  I thank Dan Lazicki for sending it along---and it's worth two minutes of your time to watch it.

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New-car loans keep getting longer

New-car sales are running at near-peak levels, partly because many consumers are financing their purchases for longer terms.

The average new car loan has reached a record 67 months, reports Experian, the Ireland-based information-services company. The percentage of loans with terms of 73 to 84 months also reached a new high of 29.5% in the first quarter of 2015, up from 24.9% a year earlier.

Long-term used-vehicle loans also broke records with loan terms of 73 to 84 months reaching 16% in the first quarter 2015, up from 12.94% — also the highest on record.

"While longer-term loans are growing, they do not necessarily represent an ominous sign for the market," said Melinda Zabritski, Experian's senior director of automotive finance. "Most longer-term loans help consumers keep monthly payments manageable while allowing them to purchase the vehicles they need without having to break the bank.

This news item appeared in the Detroit Free Press very early Monday evening EDT---and was picked up by the usatoday.com Internet site since then.  I found it in yesterday's edition of the King Report.

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The College Commencement Speech Every Graduate Needs to Hear

Earlier this week, we brought you "A Cynical Look At Tim Cook's Commencement Speech," which outlined an L.A. Times piece that took aim at what one columnist suggested was a disingenuous (if standard) effort on the part of Apple's CEO when he spoke to students at George Washington. 

Today, we bring you a commencement speech for the real world.

"In effect, you are graduating with a mortgage but no house. And what did you get? A subprime education."

"To those who majored in gender studies, film deconstruction, or any other of today's academic fads, to you I have this advice: when this commencement speech is over, do not bother looking for a job. Instead go straight to the unemployment office."

"Graduates, you have been saddled with debt and bad ideas. Good luck, you're going to need it."

This Zero Hedge article from 2:20 p.m. EDT on Wednesday has a 5:54 minute video clip embedded featuring George Will who really tells it like it is---and it's the second offering of the day from Dan Lazicki.

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WTI Crude Pumps-and-Dumps as Increased Production Trumps Surprise Inventory Draw

Following last night's inventory build report from API, expectations adjusted to a 818k build for the DOE data this morning. However, for the 5th week in a row, DOE reported a draw (this time of 1.95 million barrels).  WTI Crude had rallied into the data but was still in the red from yesterday's close and spiked on the inventory news.

However, once the machines had a chance to see that production rose once again - to a new cycle record - prices began to slide....

This brief 3-chart Zero Hedge story is worth a quick look.  It showed up on their Internet site at 10:37 a.m. EDT yesterday morning.  It's another contribution from Dan L.

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WikiLeaks announces $100K bounty for trade deal text

WikiLeaks announced an effort Tuesday to crowd-source a $100,000 reward for the remaining chapters of the Trans-Pacific Partnership trade deal, after the organization published three draft chapters of the deal in recent years.

“The transparency clock has run out on the TPP. No more secrecy. No more excuses. Let’s open the TPP once and for all,” WikiLeaks founder Julian Assange said in a statement.

Critics say that the deal being negotiated by the United States and other Pacific Rim countries would hurt American workers and the economy, while proponents argue that it would help the United States establish a stronger economic foothold in the region with regard to China.

The three chapters that WikiLeaks has already published include sections on intellectual property rights, published in November 2013, the environment, published in January 2014, and investment, published this March.

The $100,000 reward marks the beginning of a new program for the organization, in which users can pledge funding to get the chapters they want the most.

The above five paragraphs are all there is to this interesting news item that put in an appearance on the politico.com Internet site very early Tuesday morning---and it's the second offering of the day from Roy Stephens.

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In a World of Tax Hells, a New Haven Emerges

It’s not some half-baked attempt to create a new country. It’s the real deal.

Best of all, it’s a country founded on staunch libertarian and free-market principles.

But I don’t blame you if you’re skeptical. I was too. That is, until I spoke with Vit Jedlicka.

Vit is the founder and president of Liberland. It’s a slice of land on the edge of Serbia, Croatia, and the Danube River. Neither country has ever claimed it due to a border quirk. Under international law, that opened up the opportunity for Liberland.

I posted a story about this tiny geographical aberration earlier this year---and now International Man's senior editor Nick Giambruno has stumbled across it.

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Bunds Crater Most This Century

It appears Draghi's comments are not what the market wanted to hear.  Bunds have crashed over 30 bps in the last 2 days...the biggest 2-day spike since Oct 1998...

It's carnage...

This tiny Zero Hedge story with two embedded chart is worth a quick peek.  It was posted on their Internet site at 9:44 a.m. EDT yesterday morning.

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Greek crisis fuels Juncker power grab

For European Commission President Jean-Claude Juncker, the roller-coaster negotiations with Athens haven’t just been about keeping Greece in the euro.

Behind the scenes, he has used the crisis to try to establish the European Commission as the union’s indispensable power broker, putting him at loggerheads with national governments.

At stake is the balance of power in the European Union. There has always been a natural tension between the Commission, as the E.U.’s executive arm, and the European Council, the forum of member states. Now, Juncker is trying to tip the scales in the Commission’s favor, arguing that as the Commission’s first popularly elected president, he has a mandate to do so.

Juncker’s strategy was on full display this week. On Monday, he traveled to Berlin, where he pushed Angela Merkel and Christine Lagarde to take a softer line on Greece. “Grexit is not an option,” he told a German newspaper ahead of the meeting, contradicting recent statements by some of the creditors. Juncker was scheduled to host Greek Prime Minister Alexis Tsipras Wednesday evening in Brussels for consultations on Athens’ latest reform proposals.

This article showed up on the politico.eu website at 5:15 p.m. CET [Central Europe Time] yesterday---and it's the third story of the day from Roy Stephens.

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Europe has no choice - it has to save Greece

Greece has been through the trauma of default and currency collapse before. It went horribly wrong.

The sequence of events in the inter-war years have a haunting relevance today. In 1932, Greece turned to the League of Nations and British bankers in a last-ditch effort to defend the drachma under the Gold Standard as reserves drained away.

The creditors dithered for three months but ultimately said “no”. Greece devalued and imposed a 70pc haircut on loans. Debt service costs fell by two-thirds at a stroke.

It seemed like a liberation at first. The economy was growing briskly again - at more than 5pc - within a year. Then the sugar-rush faded. The credit system remained broken. Greek industry was too backward to exploit a cheaper exchange rate, unlike Japanese industry under Takahashi Korekiyo at the same time. .

The government never regained its credibility. There were four attempted coups d’etat, ending in the military dictatorship of Ioannis Metaxas. Political parties were abolished. Trade union leaders were killed or imprisoned. Greece fell to Balkan fascism.

This longish commentary by Ambrose Evans-Pritchard showed up on The Telegraph's website at 9:14 p.m. BST yesterday evening---and it's worth reading.  Roy Stephens sent it our way in the wee hours of this morning.

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Ukrainian President Poroshenko Struggles to Fight Oligarchs

Since his election, Ukrainian President Petro Poroshenko has struggled to free his country from the influence of the oligarchs. But a new generation of reformers is determined to make it happen.

When Ukrainian President Petro Poroshenko congratulates him with a handshake, Artem Sytnyk presses his lips together and blinks. The reporters' flashes bother him. Still. Until recently, the 35 year old didn't even have a Wikipedia page, and now he's one of the most important men in Ukraine. A jury selected him from a pool of 176 candidates to make him the head of the country's new anti-corruption office.

The reformers first learned about Artem Sytnyk because in 2011, under the previous administration, he had left his job as a state prosecutor to protest the ways politics had become entangled in the country's justice system. At the time, the gesture was unprecedented. Now it has qualified him to become the new government's top corruption fighter.

This 10-minute read/essay appeared on the German website spiegel.de yesterday evening Europe time---and it's no surprise that it's courtesy of Roy Stephens.  It also sports a new headline, as it now reads "Angels and Demons: Ukraine, One Year After Poroshenko".

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Missile maker says Russia did not shoot down Malaysian plane over Ukraine

The Russian company that makes the BUK air defense system that was used to shoot down a Malaysian airliner in east Ukraine said on Tuesday the plane was hit by a missile deployed by Ukraine and not widely used by Russia's military.

State-run Almaz-Antey said its own analysis of the wreckage of the Malaysia Airlines plane brought down on July 17 last year, killing 298 people, indicated it was hit by a BUK 9M38M1 surface-to-air missile armed with a 9H314M warhead.

Shrapnel holes in the plane were consistent with that kind of missile and warhead, it said.

Such missiles have not been produced in Russia since 1999 and the last ones were delivered to foreign customers, it said, adding that the Russian armed forces now mainly use a 9M317M warhead with the BUK system.

This Reuters article, filed from Moscow, appeared on their website late on Tuesday morning EDT---and I thank  Elliot Simon for bringing it to our attention.

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Russian Ruble Tumbles to 2-Month Lows, Stocks Drop Following "Large-Scale" Rebel Offensive in Ukraine

The Ruble just hit 54/USD - its weakest since early April - as IFX reports a "large-scale" rebel offensive in eastern Ukraine involving 10 tanks and around 1,000 troops. Ukraine's military has redeployed troops to halt this rebel offensive and has informed its international partners on the re-deployment which leaves The Minsk Accord hanging by a thread. Ironically Ukraine bonds had earlier jumped to 3-month highs on optimism surrounding restructuring that haircuts would not be as severe, but the re-ignition of tensions in the country have taken the shine of that exuberance.

  • *MICEX EXTENDS LOSSES, DROPS 1.2% AFTER IFX REPORT ON UKRAINE
  • *RUBLE SINKS 2.2% AFTER IFX REPORT OF REBEL OFFENSIVE IN UKRAINE

This brief news item, with a couple of excellent charts, was posted on the Zero Hedge website at 9:21 a.m. EDT yesterday morning---and I thank reader M.A. for sharing it with us.

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Now the truth emerges: how the U.S. fuelled the rise of Isis in Syria and Iraq

The war on terror, that campaign without end launched 14 years ago by George Bush, is tying itself up in ever more grotesque contortions. On Monday the trial in London of a Swedish man, Bherlin Gildo, accused of terrorism in Syria, collapsed after it became clear British intelligence had been arming the same rebel groups the defendant was charged with supporting.

The prosecution abandoned the case, apparently to avoid embarrassing the intelligence services. The defence argued that going ahead with the trial would have been an “affront to justice” when there was plenty of evidence the British state was itself providing “extensive support” to the armed Syrian opposition.

That didn’t only include the “non-lethal assistance” boasted of by the government (including body armour and military vehicles), but training, logistical support and the secret supply of “arms on a massive scale”. Reports were cited that MI6 had cooperated with the CIA on a “rat line” of arms transfers from Libyan stockpiles to the Syrian rebels in 2012 after the fall of the Gaddafi regime.

Clearly, the absurdity of sending someone to prison for doing what ministers and their security officials were up to themselves became too much. But it’s only the latest of a string of such cases. Less fortunate was a London cab driver Anis Sardar, who was given a life sentence a fortnight earlier for taking part in 2007 in resistance to the occupation of Iraq by U.S. and British forces. Armed opposition to illegal invasion and occupation clearly doesn’t constitute terrorism or murder on most definitions, including the Geneva convention.

This incredible, but short essay, which certainly falls into the must read category for any serious student of the New Great Game, appeared on theguardian.com Internet site at 8:56 p.m. BST yesterday evening, which was 3:56 p.m. EDT in New York.  I thank South African reader B.V. for finding it for us.

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What's OPEC Going to Do With Iran's Million Barrels a Day?

Just when it looked like OPEC was winning the war with U.S. shale-oil drillers, a new front is opening up within its own ranks.

The Organization of Petroleum Exporting Countries’ summit on June 5 to determine the group’s output will come three weeks before a deadline for a deal on Iran’s nuclear program. The government in Tehran says it can add almost 1 million barrels to daily production within six months of sanctions being lifted.

That’s a million barrels that OPEC hasn’t had to worry about since it adopted a new strategy in November of favoring market share over propping up prices. The group is already pumping the most oil in more than two years to quash higher-cost producers, and while Iran’s return would add to the pressure on OPEC’s rivals, it will also heighten competition within the group for buyers.

There’s a lot of jockeying for position going on in OPEC right now,” Ole Hansen, head of commodity strategy at Copenhagen-based Saxo Bank A/S, said by phone. “The Saudis are increasing production and anyone else in OPEC who can is also doing the same. If OPEC’s not willing to cut output to make room for Iran, they have to look for reductions from producers outside the group.

This Bloomberg article put in an appearance on their website late Tuesday afternoon Denver time---and it's the third and final offering of the day from Elliot Simon, for which I thank him.

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One of the World's Largest Silver Miners Slams the CFTC About Silver Market Manipulation

It has long been known to silver market watchers that when it comes to the price of paper silver, there has long been a chronic and extremely concentrated shorting presence at the Comex, one which the CFTC has persistently refused to address even though it consistently surpasses the proposed limits on derivative positions. Now, at long last, a Canadian silver miner, First Majestic Silver Corp., has decided to take the CFTC to task.

In a letter penned by Ted Butler to CFTC Chairman Tim Massad (who recently replaced former Goldmanite and future US Treasury Secretary, Gary Gensler), Keith Neumeyer, CEO of First Majestic, became the first primary silver producer to vocally highlight some of the questionable activity reported weekly in the CFTC's Commitment of Traders report, specifically the "record position change of more than 28,200 net contracts of COMEX silver futures" the equivalent of 141 million ounces of silver and 61 days of world mine production. Incidentally, this was first observed here one week ago.

Neumeyer observes accurately that the "big changes in positions on the COMEX are by speculators and commercials acting as speculators and not by those engaged in bona fide hedging" and comments that "such massive speculation in COMEX silver futures may not be in keeping with the spirit and intent of commodity law and may suggest something is wrong with the price discovery process, since real producers and consumers of silver don't appear to be represented."

While we salute First Majestic with this first public appeal by a corporation to the CFTC to stop the rigging in the silver market, we have absolute certainty that this too complaint will promptly end up in Mr. Massad trash never to be heard from again.

This Zero Hedge spin on Keith Neumeyer's letter to the CFTC was posted on their website at 3 p.m. yesterday afternoon.

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Gold Declines for Second Day as Investors Await U.S. Jobs Data

Gold dropped for a second day to trade near a three-week low before the release of monthly data on U.S. employment that will provide clues on the outlook for borrowing costs in the world’s largest economy. Silver declined.

Bullion for immediate delivery was 0.1 percent lower at $1,183.66 an ounce at 12:05 p.m. in Singapore, according to Bloomberg generic pricing. The metal declined as much as 1.1 percent to $1,179.65 on Wednesday, the lowest level since May 11. Prices in Shanghai fell to a one-month low.

Gold is little changed this year as investors pored over U.S. data for clues on when the Federal Reserve will raise interest rates for the first time since 2006. The report on Friday is expected to show a pickup in the jobs market after data on Wednesday showed companies added more workers in May from a month earlier. An expanding economy gives policy makers more room to raise rates, which curb gold’s appeal as it generally offers returns only through price gains.

Gold was “put under pressure after the release of improving U.S. economic data,” James Steel, an analyst at HSBC Securities (USA) Inc., wrote in a note.

This Bloomberg story from early yesterday evening MDT is the usual main stream bulls hit, as the gold price has nothing to do with "all of the above," as prices are set in the COMEX futures market between the bullion banks and their buddies on one side---and the Managed Money traders on the other.  I found it on the Sharps Pixley website in the wee hours of this morning EDT.

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¤ The Funnies

Another ring-billed gull watching me warily from the shoreline.  Note the high-water marks on the rocks.  Like California, we could use some serious rain here as well.

Here's a rare bird in these parts.  I took this photo minutes after the one shown above.  It's a KLM flight on final approach into Edmonton International [YEG] and about 15 miles from the runway.  The flaps and slats are down, with the landing gear about to follow.  It was at least two kilometers away and about a kilometer high.  All the intervening air really softens the photo---and the colours.

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¤ The Wrap

Adding to the insult of blatant commercial manipulation in capping the price of silver was the fact that there was no legitimate hedging by miners in the selling; this was all financial selling by banks and other financial institutions with no economic legitimacy. If it wasn’t perfectly clear then I would never be able to get away with calling JPMorgan and the CME as crooked.

The single biggest key to the silver manipulation has always been if the concentrated short position increases on any price rally and that is exactly what occurred on the latest (snuffed out) rally. The concentrated short position of the 8 largest traders in COMEX silver is now 75,529 contracts, or 377,645,000 million oz, the most in six years. Eight traders, not one of them a miner or representing miners is short almost 50% of what the CPM Group claims is world annual silver mine production (790 million oz). No other commodity has such a concentrated short position and this is why silver miners everywhere should be complaining and screaming with the loudest voices possible.

I haven’t done so in a while, but let me point out something I used to bring up in the past that is more relevant today. As crazy as it is that COMEX silver has the largest concentrated short position of any commodity traded in terms of actual world production, it’s even crazier than that. Not only is the concentrated short position in COMEX silver so large as to be impossible to justify economically, the concentrated short position is almost double the size of the concentrated long position, a situation not witnessed in any other metal and few other commodities in general. -- Silver analyst Ted Butler: 03 June 2015

JPMorgan et al took another tiny slice out of the gold and platinum salamis yesterday, but a much bigger chunk in silver and palladium.  In silver, the price closed below its critical 50-day moving average for the first time during this engineered price decline---and although volume was elevated, I wouldn't call it over the moon by any stretch of the imagination.  Unfortunately, none of this data will be in tomorrow's Commitment of Traders Report, as it's one day past the cut-off.

Just eye-balling the charts below, I'd guess that "da boyz"---along with their HFT buddies and their algorithms---could peel close to 50 bucks off the gold price and a buck and change off silver before this all done to the downside.  Of course it has to do with the number of contracts, not the price---and the way things are proceeding at the moment, these guys could use a month or more to get the job done, as they're in no hurry.  It's the "summer doldrums" don't you know?

Here are the 6-month charts for all four precious metals as of the close of COMEX trading yesterday.

And as I type this paragraph, the London open is less than ten minutes away.  Gold has been trading a bit lower in a very tight range all through Far East trading on their Thursday.  Pretty much the same can be said about the other three precious metals as well.  Net gold volume is north of 17,000 contracts already---and 99 percent of it is in the current front month, so it is---as usual---all of the HFT variety.  The same can be said of silver, as net volume is around 4,300 contracts.

Ted is quite right in his statement that only a small fraction of one percent of all trading volume in the precious metals is driven by legitimate supply/demand considerations.  The rest is HFT liquidity/noise---and is solely there for price management/profit purposes of JPMorgan et al.  The dollar index has traded virtually ruler flat all night long.

Tomorrow morning at 8:30 a.m. EDT we get the new job numbers---and it's a semi-sure thing that the powers-that-be will use that opportunity to hit the precious metals in general---and silver in particular.

We also get the latest COT Report tomorrow, along with the companion Bank Participation Report.  And as I said in Wednesday's column, I'm not about to hazard a guess as to what the latest COT Report will show---and Ted never mentioned it his mid-week commentary yesterday.

And as I hit the 'send' button on today's column at 5:30 a.m. EDT, I note that all four precious metals are still trading in a very tight range both below and above unchanged from Wednesday's close in New York.

Gold volume is now north of 34,500 contracts, which is huge ----and silver's net volume is around 7,800 contracts, not exactly tiny, either.  There are virtually no roll-overs in either metal, so the HFT boyz and their algorithms are hard at work keeping prices in line now that London has been open a bit more than two hours.

Now that I check the dollar index, which began to head south with a vengeance at precisely 9 a.m. in London, I can see why volume has blown out as much as it has, as the index crashed about 70 basis points in less than forty minutes until 'gentle hands' showed up.  Right now it's only down 49 basis points.

It's obvious that the powers-that-be don't want the precious metal prices to reflect what's happening in the currency markets---and that's why the HFT boyz are spinning their algorithms with such fury at the moment.

This reminds me of the shenanigans that were going on when the SNB dumped the Euro peg earlier this year, as they killed the gold price at that time, when it should have exploded to the upside.  It's obvious that JPMorgan et al---along with the BIS---are at battle stations.

I have no idea what the rest of the Thursday session will bring, but based on what's going on right now, nothing will surprise me when I check the charts later this morning---nor should it you.

I'm off to bed---and I'll see you here tomorrow.

Ed Steer