JPMorgan et al managed to take another slice out of the gold and silver salamis

The gold price didn’t do much in Far East or early London trading, but managed to make it back above the $1,300 spot price mark about thirty minutes before the Comex open.  That was its high tick of the day—and once gold began trading in New York, the HFT boyz showed up with their algorithms—and the low of the day was in by around 11:30 a.m. EDT.  After that, the price didn’t do much.

The high and low ticks were reported as $1,303.70 and $1,94.70 in the December contract.

Gold closed back below the $1,300 mark at $1,295.20 spot, down an even two bucks on the day.  Net volume was very light at 72,000 contracts.

Silver didn’t do a thing except chop sideways in a very tight range up until a few minutes before the Comex open.  The ‘rally’ that developed at that point got dispatched in the usual manner—and the HFT boyz took another decent slice off the silver salami, with the low tick coming the same time as gold’s—at 11:45 a.m. EDT.  The price recovered a bit off its low, but didn’t do much after that.

The high and low tick as recorded by the CME Group were $19.70 and $19.365 in the September contract.

Silver finished the Tuesday session at $19.405 spot, down 18 cents on the day.  Net volume was only 25,000 contracts.

The platinum price traded a handful of dollars in positive territory up until about 9 a.m. in New York—and then it suffered the same fate as gold and silver, with the low tick of the day coming around 11:45 a.m. EDT.  And after a quick recovery, it traded flat, closing down four bucks on the day.

Palladium traded pretty flat all through Far Eat and Zurich trading, but that all ended minutes after 10 a.m. EDT when a not-for-profit seller showed up.  The low, like platinum, came minutes before noon in New York—and it only recovered a small handful of dollars from there.  Palladium got closed down ten dollars.

The dollar index closed late on Monday afternoon at 81.57—and proceeded to tack on 10 basis points between the Tuesday open and the Comex open in New York at 8:20 a.m. EDT yesterday morning.  At precisely that moment, the index jumped another 15 basis points in a flash, as it appeared the someone hit the ‘buy dollars/sell precious metals’ button.  Most of the gains that mattered were in by noon in New York—and after that it traded flat, closing at 81.87—up 30 basis points on the day.

The gold stocks rallied into positive territory very shortly after the markets opened in New York yesterday morning—and it was pretty much all down hill between 10:45 and 11:30 a.m. EDT—which is where gold printed its low tick of the day.  The subsequent rally started to fade at the 1:30 p.m. Comex close—and the HUI finished down an even 1.00%.

The silver equities put in an almost identical show, as Nick Laird’s Intraday Silver Sentiment Index closed down 1.20%—giving back almost all of Monday’s gain.

The CME Daily Delivery Report showed that 110 gold and 7 silver contracts were posted for delivery within the Comex-approved depositories on Thursday.  For a change, there was hardly a bullion bank in sight as an issuer or stopper.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME’s Preliminary Report for Tuesday showed that 509 gold contracts remain open in August—and from that you can subtract the 110 contracts mentioned in the paragraph above, so we’re down to 400 contracts left, with lots of time left in the delivery month.

Much to my surprise, an authorized participant added another pile of gold to GLD yesterday.  This time it was 48,100 troy ounces.  And as of 9:48 p.m. EDT yesterday evening, there were no reported changes in SLV.

Moments after I hit the ‘send’ button on today’s column, I received the weekly update from the good folks over at Switzerland’s Zürcher Kantonalbank.  They reported the changes in their gold and silver ETFs as of the close of trading on Friday, August 15—and here’s what they had to say.  Their gold ETF added a tiny 6,940 troy ounces—and that, I believe, is only the second or third time this year that there’s been a deposit made in it, as it’s been down hill all year long except for that.  But the string of withdrawals from their silver ETF remains intact, as another 197,598 troy ounces were reported taken out.

The U.S. Mint had another sales report yesterday.  They sold 1,000 troy ounces of gold eagles—100,000 silver eagles—and 300 platinum eagles.

There wasn’t a lot of activity at the Comex-approved depositories on Monday.  In gold, only 1,399 troy ounces were reported received—and nothing was shipped out.  In silver, nothing was reported received, but 326,203 troy ounces were shipped out—all from Canada’s Scotiabank vault.  The link to the silver activity is here.

I have another decent amount of stories again today, but not quite as many as I had in yesterday’s column.

A number of readers have asked recently about my opinion on the new Silver Fix, which has attracted much publicity. I thought I had addressed the issue at the time Deutsche Bank quit the Fix, effectively bringing an end to a 117 year old tradition. Then and now, it seemed like a non-event to me because the price of silver (as well as gold and copper) is continuously fixed 24 hours a day on the COMEX. That being the case, I have trouble seeing what difference it could possibly make about what form the replacement fix takes on. I suppose there was a time when the London Silver Fix actually meant something, but that time has long passed. I don’t mean to give short shrift to a topic apparently of great interest to many, but I’m not going to pretend something is important if I don’t think it is. If it turns out that I am wrong and the new Silver Fix is more meaningful than I believe it would be, I’ll acknowledge that in the future. In the meantime, I consider it a non-event.Silver analyst Ted Butler:  16 August 2014

As is usually the case, nothing much happened from a price perspective until trading began in New York at 8:20 a.m. EDT.  The pop in the dollar, along with the swan dives in gold and silver prices, certainly looked a managed event—but you should make up your own mind on this.  However, there was nothing free market about the fact that all four precious metals were sold down yesterday, as there was no news to account for it whatsoever.

But JPMorgan et al managed to take another slice out of the gold and silver salamis yesterday—and here’s what the 6-month charts look like in both gold and silver now that they’ve been updated with Tuesday’s trading data.

Although the silver is inches away from getting into oversold territory, that’s certainly not the case in gold.  With such light volume on Tuesday, there wasn’t a huge amount of long liquidation by the technical funds in silver in the ‘Managed Money’ category—and there wouldn’t have been much in gold either, I would think.  So I’m still very fearful of the potential to take both these metals down by substantial amounts as ‘da boyz’ have a lot of work to do to the downside to get these same technical funds out of their current long positions—and probably back on the short side as well.

Of course that means lower prices, but how low is still unknown.

And as I write this paragraph, the London open is less than ten minutes away.  Nothing is happening, or has happened, price-wise in any of the four precious metals during the Wednesday trading day so far.  Net volume in gold is around 8,500 contracts—and silver’s net volume is exactly 3,000 contracts.  Nothing to see here.  The dollar continues to crawl slowly higher—and is up about 11 basis points as of this writing.

Yesterday, at the close of Comex trading, was the cut-off for Friday’s Commitment of Traders Report—and I would suspect that all of yesterday’s trades will be reported in a timely manner considering the low volume.

I happened to glance at the 6-month dollar index chart—and was amazed at how much it was overbought.  It’s been like this for a month—and one has to wonder how soon this condition will correct itself—and how violent it might be.  This, of course, will have some effect on precious metals, but only to the extent that it’s allowed to have an effect.  So we wait.  Here’s the chart.

Another event that’s coming up starting tomorrow is the Fed’s Jackson Hole Monetary Symposium.  It runs for a couple of days—and it will be interesting to see how the precious metals react, or are allowed to react during that time.

And as I hit the send button on today’s effort at 5:05 a.m. EDT, I note that all four precious metals are down from their respective closes in New York—particularly palladium, which is down eleven bucks already.  Net volumes in both gold and silver are higher now, of course, but still very much on the lighter side for this time of day, so it’s hard to read too much into the current price action.  Of course I said that at this time yesterday—and look what happened when the Comex opened.  The dollar index is now up 15 basis points.

That’s all I have for today and, once again, it’s more than enough.

I hope your day goes well—and I’ll see you here tomorrow.

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Freegold Ventures Limited is a North American gold exploration company with three gold projects in Alaska. Current projects include Golden Summit, Vinasale and Rob. Both Vinasale and Golden Summit host NI 43-101 Compliant Resource Calculations.An updated NI 43-101 resource was calculated on Golden Summit in October 2012 and using 0.3 g/t cutoff  the current resource is 73,580,000 tonnes grading 0.67 g/t Au for total of 1,576,000 contained ounces in the indicated category, and 223,300,000 tonnes grading 0.62 g/t Au for a total of 4,437,000 contained ounces in the inferred category. In addition to the Golden Summit Project the Vinasale also hosts a NI 43-101 resource calculation which was updated in March 2013. Indicated resources are 3.41 million tonnes averaging 1.48 g/t Au for 162,000 ounces, and Inferred resources are 53.25 million tonnes averaging 1.05 g/t Au for 1,799,000 ounces of gold utilizing a cutoff value of 0.5 grams/tonne (g/t) as a possible open pit cutoff. Please send us an email for more information, [email protected]

Here are a couple of more photos from Sunday.  This is a juvenile red-necked grebe from two different angles—and it’s almost the size of its parents already.  It’s hard to believe that less than a month ago it was still in its egg.  I was amazed how late in the year these birds nested, as I’d been watching them sitting on their eggs for what seemed like forever, but maybe it’s a second brood.  I never thought that the eggs would hatch in time for the babies to fledge by the time the snow flew around here.  How wrong I was.