The Wednesday trading session turned out exactly as I expected

The gold price developed a slight positive bias early in Far East trading, topping out shortly after London opened on their Wednesday morning.  From that point it drifted quietly lower, before getting sold down five bucks beginning at the Comex open in New York.  Minutes before 2 p.m. EDT, the price was up about three bucks off its interim 8:50 a.m. EDT low—and at 2 p.m. on the dot, the “Buy the dollar index/hit the precious metals” button was pushed—and that was it for the day in all four precious metals, with gold [not surprisingly] getting hit the hardest.  The gold price finished about three bucks and change off its 3:35 p.m. EDT low tick.

The high and low were reported by the CME Group as $1,230.40 and $1,208.20 in the December contract.

Gold finished the Wednesday trading session at $1,211.60 spot, down $16.20 from Tuesday's close.  Net volume was 122,000 contracts, but considering the price action, that wasn't a lot—at least in my opinion.

As usual, silver got hit the moment that trading began at 6 p.m. EDT in New York on Tuesday evening—and it didn't do a thing until the 8:20 a.m. Comex open.  The subsequent rally attempt—and there were a number of them leading up until 2 p.m. EDT—all got dealt with in the usual manner.  Then at that point, the HFT traders and their algorithms showed up—and “Bob's your uncle!

The high and lows were reported as $17.315 and $17.015 in the December contract.

Silver closed yesterday at $17.09 spot, down 10.5 cents from Tuesday.  Net volume was the same as Tuesday's at 28,000 contracts.

Platinum didn't do a lot during the Wednesday session, but met the same fate at 2 p.m. EDT as both gold and silver—and was closed down 8 bucks.

Palladium made numerous attempts to break above the $800 spot mark, but a willing seller was always at the ready to make sure it didn't happen.  The metal also got hit at 2 p.m.—and was only allowed to close up 2 dollars.  It would have obviously finished the trading session materially higher if allowed to do so.

The dollar index closed late Tuesday afternoon in New York at 85.41.  It traded virtually ruler flat until 9:15 a.m. EDT on Wednesday morning, before getting sold down to its 85.20 low at 10:30 a.m. EDT.  Then shortly before 2 p.m. the index blasted higher as 'The Button' got pushed, with its 86.03 high tick coming about 2:45 p.m. in New York.  It traded sideways after that, closing at 85.99, which was up 58 basis points on the day.

The gold stocks opened down—and were in the hole to the tune of a bit more than 2 percent by around 11 a.m. in New York.  From there they rallied back to unchanged by around 1:20 p.m.  Then they got clubbed on the Fed news—and barely recovered off their lows going into the close.  The HUI got creamed for 4.05%.

Ditto for the silver equities.  The managed to rally into positive territory off their 11 a.m. New York low, but really got hammered starting at 2 p.m., although they did recover off their absolute lows.  Not that it mattered much, as Nick Laird's Intraday Silver Sentiment Index got bombed for a 4.21% loss.

That's the third or fourth time this month that the shares have been hammered to the downside out of all proportion to the declines in the underlying metals themselves—and it's becoming obvious that these dramatic sell-offs don't involve free-market forces.

The CME Daily Delivery Report showed that there were no deliveries to report, which is not surprising since I mentioned in this space yesterday that the October deliveries for both gold and silver were done.

And barring any surprise deliveries in the next 48 hours, the October deliveries in gold were reported as 1,268 contracts—and in silver it was 774 contracts, which is very decent for what is not a 'normal' delivery month for silver.

The CME Preliminary Report for the Wednesday trading session showed that there were zero contracts in either gold or silver still open in the October delivery month—and just eye-balling the remaining open interest for November in these two metals, it's apparent that the November will be pretty quiet on the delivery front as well.  November, like October, is not normally a big delivery month for either gold or silver, but there's always room for a surprise.

First Notice Day for the November deliveries is Friday—and whatever they show, I'll have them in Saturday's column.

There was another withdrawal from GLD yesterday.  This time an authorized participant took out 38,450 troy ounces.  And as of 10:06 p.m. yesterday evening, there were no reported changes in SLV.

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

There was very big in/out movement in both gold and silver at the Comex-approved depositories on Tuesday.  In gold, there was 22,505 troy ounces reported received—and 89,183 troy ounces shipped out.  The link to that activity is here.

In silver, there was 934,767 troy ounces received—and 343,435 ounces shipped out the door for parts unknown.  The link to that action is here.

Here's a nifty chart that Nick Laird sent our way last night—along with his comment that stated—“Support has now become resistance.”  That's precisely right of course dear reader, but only if the Plunge Protection Team allows this chart pattern to stand.  The 'click to enlarge' feature works wonders here.

I don't have all that many stories for you today—and I hope there are at least a couple in here that interest you.

When small men begin to cast big shadows, it means that the sun is about to set.Lin Yutang

Well, I'm sad to say that the Wednesday trading session turned out exactly as I expected it would, although I was hoping beyond hope that it might be different this time—but it wasn't.

But what should not be lost in this is the continuing engineered price declines in both gold and silver—and after 'da boyz' and their algorithms got through with both metals yesterday, there's only 20 or so dollars to go to get back to the October 6 low in gold.

But, as Ted Butler always points out, it's not the price, rather it's the number of long gold contracts that JPMorgan et al can get the Managed Money traders to puke up—and how deeply they can guide these same technical funds onto the short side of the gold market.  So how 'low' the price goes, will be a direction function of that process.

Here are the 6-month charts for both gold and silver.

Ted says that with silver, the Managed Money is all 'locked and loaded' with a record short position.  It's possible they may have added to their short position yesterday, but there's no way of knowing, because Wednesday's price action occurred a day after the cut-off for tomorrow's Commitment of Traders Report.  So we'll have to wait until the COT Report on November 7, which is a lifetime away at the moment.

And as I type this paragraph, the London open is about 50 minutes away.  I note that the two tiny rally attempts that occurred in gold—one shortly after trading began in New York yesterday evening—and the one that came shortly after 9 a.m. Hong Kong time, were both sold down.  But the real sell-off began around 1 p.m. Hong Kong time as the HFT boyz leaned on the price—and gold is now at a new low for this move down, and it probably won't be the low of the day.  Gold volume is already north of 32,000 contracts, which is very heavy for this time of morning—and 99 percent of it is in the current front month, which is December, so it's not normal trading volume.

Silver's tiny rally attempt in morning trading in the Far East on their Thursday met with the same fate as gold—and 'da boyz' really put the boots to the price shortly before 2 p.m. Hong Kong time.  The silver price is now knocking on the door of its old low set back on Friday, October 3.  Gold volume is just north of 12,000 contracts at the moment, which is also pretty big for this time of day.

After trading flat for most of the Far East session, platinum also met the same fate starting shortly before 1 p.m. Hong Kong time.  Palladium got hit shortly after trading began at 6 p.m. in New York last night—and has been allowed to trade flat since then.

The dollar index has been in rally mode almost since the open yesterday evening—and at the moment it's up 25 basis points.  But if you believe that these engineered price declines are a result of the 'strength' in the dollar index, do I have a bridge for you!  However, that's what the so-called experts will use as a reason for the decline in all precious metals.

I'd like to think that this is the last swing for the fences by JPMorgan et al, but it's just not possible to tell at the moment.  I think some comfort should be drawn from Greenspan's use of the world “measurable” because it confirms that there is an end game which, as I've said many times over the years, will certainly result in a re-pricing of not just the precious metals, but all commodities in general.  The only thing we don't know is the timing.  But looking at the current set-up in the Comex futures market, never have the stars been so favourably aligned—and that was Ted's opinion in his mid-week commentary yesterday, which was headlined “Resolution is Dead Ahead“.

So we wait some more.

And as I hit the send button on today's column at 5:15 a.m. EDT, London has been open just over an hour—and as the charts below show, JPMorgan et al—along with their HFT buddies—are still at it.  Gold hit another new low—and is trading just above the $1,200 mark at the moment.  Silver was down almost 40 cents at its low tick that came about 8:30 a.m. GMT.  Platinum is barely off its low—and palladium is still trading flat after its sell-off in early Far East trading.

Gold volume is north of 48,000 contracts at the moment—and silver's volume is way up there as well at 17,000 contracts.  The dollar index is now up 38 basis points.

The powers-that-be certainly aren't wasting any time in this leg down of the current engineered price decline—and based on what I see at the moment, it could be a wild and woolly day once Comex trading begins at 8:20 a.m. EDT this morning—if not sooner.

So hang onto your hats—and I'll see you here tomorrow.

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Robert Giustra, CEO of Columbus Gold, commented: “These drill results validate Columbus Gold’s approach to adding ounces with a lower-risk drilling program designed to infill and to extend the mineralized zones to 200 m vertical depth from surface; a depth amenable to open pit mining.” 

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Here are two of the latest photos from yesterday of the lava flow encroaching on Pāhoa Village on Hawai'i's 'Big Island'.  The 'click to enlarge' feature really helps here.