Silver closed on Wednesday at the precise same price as it did on Tuesday…and Monday…$27.83 spot.

Well, the 9:00 a.m. BST sell-off in London proved to be the low of the day.  The subsequent rally was weak…and then the price tailed off once again going into the New York open.

The secondary low of the day came about ten minutes before the Comex began to trade…and the rally that followed came to an end at 9:40 a.m. Eastern time…and then traded sideways to down a hair going into the 5:15 p.m. electronic close in New York.

The low of the day was a few dollars below $1,590 spot at 9:00 a.m. BST…and the New York high of $1,607.40 was at 9:40 a.m.

Gold closed at $1,603.10 spot…up $4.10 on the day…and back above its 50-day moving average.  Volume was around the 107,000 contract mark.

The silver price pattern was very similar to gold’s, except more ‘volatile’.  Silver’s high [$28.13 spot] also came at 9:40 a.m. Eastern as well…and from there it got sold off and closed 30 cents off its high.  Silver’s low came at 9:00 a.m. BST…and was somewhere below $27.50 spot.

Silver closed on Wednesday at the precise same price as it did on Tuesday…and Monday…$27.83 spot.  What are the chances, dear reader, that this was the free market in action?  Net volume, once the rolls out of the September delivery month were subtracted, was a tiny 18,500 contracts.

By the way, these price moves were specific to only gold and silver.  There was no trace of it in either platinum or palladium.

The dollar index opened around the 82.55 mark, with the low of the day coming at precisely 10:00 a.m. in London.  Then in the next ninety minutes the index rose to 82.75 before giving back about 10 basis points going in the 5:30 p.m. New York close.  In a nutshell, the dollar index didn’t do much yesterday…and was never a factor in Wednesday’s precious metals price activity.

The gold stocks spiked up a bit at the open, but slid into negative territory as soon as it became obvious that the 9:40 a.m. high in gold was all there was.  The stocks traded down about half a percent until about 2:20 p.m. Eastern.  Then, like the Dow, they caught a bid…and by the close of trading, the HUI finished in the black to the tune of 0.43%.

For the most part, the silver shares finished in the plus column yesterday…and Nick Laird’s Silver Sentiment Index closed up 0.72%.

(Click on image to enlarge)

The CME’s Daily Delivery Report showed that 88 gold and 4 silver contracts were posted for delivery within the Comex-approved depositories on Friday.  Morgan Stanley and the Bank of Nova Scotia were the two issuers of note, with 50 and 35 contracts respectively.  HSBC USA and Deutsche Bank stopped 55 and 32 contracts respectively.  The link to yesterday’s Issuers and Stoppers Report is here.

There were no reported changes in GLD but, after about 1.6 million ounces was withdrawn from SLV on Tuesday, an authorized participant added 1,356,958 troy ounces of silver yesterday.

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

The Comex-approved depositories did not receive any silver on Tuesday, but they shipped 378,196 troy ounces out the door.  The link to that activity is here.

After my remarks about First Majestic Silver Corporation yesterday, I was less than surprised to find an e-mail from the company in my in-box when I finally crawled out of bed yesterday morning…and here it is in its entirety…

Hi Ed – Hope all is well.  Thanks for reading our news release yesterday, however, I’m honestly quite surprised to read your comment below in today’s G&S Daily…

Mr. Neumeyer (like yourself) is a silver bull and employs the use silver futures to trade the volatility in the market.  By utilizing some of the top physical metal traders in the world (whom trade approx.. 70% of the world’s silver market), we have access to valuable information.  Furthermore, this activity is nothing new… for more than 2 years our shareholders have benefited from this activity.  For the first half of 2012, First Majestic has realized a gain of $2.3M; 2011 +$2.4M; 2010 +$2.9M.

Quite frankly, I realize your issue is not with the trading activity; it’s directed at the use of Comex futures.  Your concerns have been received and we always appreciate valuable shareholder feedback.

BTW – the use of stops are not practical for professional trading…


Todd Anthony, MBA

Investor Relations Manager

Toll Free: 1-866-529-2807

I have the usual number of stories for a weekday…and I hope you have time to at least skim the ‘cut and paste’ portions of each.

In any discussion of the future of Gold, or of the price of Gold, the first thing that must be realized is that Gold is a political metal. In the true meaning of the word, its price is “governed”.

This is so for the very simple reason that Gold in its historical role as a currency is fundamentally incompatible with the modern worldwide financial system.

Up until August 15, 1971, there has never in history been an era when no paper currency was linked to Gold. The history of money is replete with instances of coin clipping, printing, debt defaults, and the other attendant ills of currency debasement. In all other eras of history, people could always escape to other currencies, whose Gold backing remained intact. But since 1971, there is no escape because no paper currency has had any link to Gold.

All of the economic, monetary, and financial upheaval of the past 41 years is a direct result of this fact.

The global paper currency system is very young. It depends for its continued functioning on the belief that the debt upon which it is based will, someday, be repaid. The one thing, above all others, that could shake that faith, and therefore the foundations of the modern financial system itself, is a rise (especially a sharp rise) in the U.S. Dollar price of Gold. – Bill Buckler, Gold This Week.

Well, yesterday didn’t prove to be the start of the big sell-off.  It turned out to be the usual high-frequency traders doing the dirty…digging a hole for gold and silver to climb out of in overnight trading, so it could be arranged to finish the New York trading session basically unchanged from the previous day.  As Ted Butler pointed out yesterday, this tight trading range has mostly consisted of that pattern for the last few months or so.

And nothing could prove that point more than the closing price of silver on Monday, Tuesday and Wednesday.  It closed at $27.83 spot on all three days.  The statistical probability of that being free market forces in action is beyond astronomically high, so it was obviously a big ‘up yours’ from the powers that be.

Far East trading during their Thursday was a non-event once again, with net volumes as low as I can remember them being…especially in silver.  The dollar index is up a tad, but nothing significant…and now that London is open, not much is happening their, either.  I’m sure that Comex trading will probably be interesting once again.

So we still sit here in these manufactured ‘summer doldrums’ waiting for the next shoe to drop.  I can’t shake the feeling that when it does it hit the floor, it will be heard around the world…and the impact will be a market-altering event.  The only unknown is what form it will take…and I’d like to believe that gold [and silver] will play their part in it.

See you tomorrow.

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