Yesterday turned out pretty much as I suggested it might
Yesterday's trading session in gold turned out pretty much as I talked about in The Wrap yesterday, except for the fact that I thought that JPMorgan et al would hit the gold price harder on the Fed news, but they didn't. But it was still a lousy day nonetheless.
The CME Group recorded the high and low ticks as $1,360.20 and $1,327.80 in the April contract.
The gold price closed in New York yesterday at $1,330.60 spot, down $24.90 from Tuesday's close. Net volume was pretty decent at 167,000 contracts.
Up until 11 a.m. in New York, the silver price followed gold lower, but then it rallied sharply until minutes after 1 p.m. EDT. Then a seller showed up—and within the space of two hours, took back all the gains of the previous rally. Then after 3:15 p.m. in New York, the silver price traded sideways into the close of electronic trading.
The high and low in the May contract were recorded at $20.965 and $20.505.
Silver close on Wednesday at $20.61 spot, down only 20.5 cents from Tuesday's close. Volume, net of March and April, was pretty heavy at 52,500 contracts. Silver closed below its 200-day moving average for the second day in a row—and punctured the 50-day moving average for a brief period yesterday as well.
Platinum and palladium weren't spared either—and both were sold down for small loses. Here are the charts.
The dollar index closed late on Tuesday afternoon in New York at 79.38—and by the time the Fed announcement was made yesterday, the index has added another 7 basis points. The rally on the Fed news ran out of gas an hour later at 80.10—and from that point the index fell back a bit and closed at 80.02—which was up 64 basis points on the day.
Not surprisingly, the gold stocks opened down about a percent—and then traded almost ruler flat up until the smoke went up the chimney over at the Fed. It was all down hill from there—and the HUI got sold down by 4.07%.
The silver equities also got sold off at the open, but began to rally when the metal did at 10:30 a.m. EDT. The rally ended on the Fed news—and the stocks got sold off pretty hard after that, as Nick Laird's Intraday Silver Sentiment Index closed down 3.82%.
The CME's Daily Delivery Report showed that 16 gold and zero silver contracts were posted for delivery within the Comex-approved depositories on Friday. Canada's Scotiabank issued 14 of those contracts—and JPMorgan Chase stopped 11 in its in-house [proprietary] trading account. The link to the Issuers and Stoppers webpage is here.
There were were no reported changes in GLD—and as of 9:32 p.m. yesterday evening, there were no reported changes in SLV, either.
There was no sales report from the U.S. Mint.
Over at the Comex-approved depositories in gold on Tuesday, they reported taking in 24,112 troy ounces of the stuff—and shipped out 1,286 troy ounces. The link to that activity is here.
In silver, there was 15,649 troy ounces reported received—-and 380,657 ounces shipped out the door. The link to that action is here.
I have a lot less stories today than I did on either Tuesday or Wednesday—and I'm sure you're happy about that, but not as happy as I am.
Instead of simply waiting for the silver shortage to end the manipulation, I thought it advisable to try a new approach that was completely compatible with the real silver story to date. Since I (we) couldn’t get the CFTC to do its job and end the manipulation; why not try a different approach? The truth is that I have long believed that the right civil lawsuit stood a good chance at ending the manipulation before a silver shortage hit. I had high hopes initially that the class-action suit that was filed against JPMorgan for manipulating the price of silver a few years ago might succeed; but it seemed to drift off track and I wasn’t particularly surprised that it was ultimately dismissed. My intent should be clear – I want to see the next lawsuit succeed.
The stakes in a COMEX silver/gold/copper manipulation lawsuit are staggering. Not only is market manipulation the most serious market crime possible, the markets that have been manipulated and the number of those injured are enormous. I don’t think it’s an exaggeration to say that any finding that JPMorgan and the COMEX did manipulate prices as I contend could very well result in the highest damage awards in history. That’s no small thing considering the tens of billions of dollars that JPMorgan has coughed up recently for infractions in just about every line of their business. – Silver analyst Ted Butler: 19 March 2014
As I said at the top of this column, except for the severity of the sell-offs in both gold and silver, the precious metal trading pattern yesterday turned out pretty much as I suggested it might in Wednesday's column.
Here's a chart of the gold price action following each of the recent FOMC meetings. It was posted in a Zero Hedge piece further up in today's column—and in case you didn't read the story, I thought the graph was worth looking at on its own.
Here are the 6-month gold and silver charts with yesterday's price action included, so you can see how this engineered price decline is progressing.
As you can tell, there's a ways to go in gold, but we're down over $60 from Monday already—and the situation in silver is much further along. The one thing that we don't know for sure is whether this “slicing of the salami” will go slowly or quickly, but with the 50 and 200-day moving averages so close together, JPMorgan et al could end this pretty quick if that's what their plans are. All the have to do is let loose their HFT boyz—and “Bob's your uncle!“
Also worth noting is the fact that we are well along in the roll-overs out of the April delivery month for gold—and it's my opinion that “da boyz” will want this sell-off all done by this time next week. So we wait.
The other interesting thing I've noticed in the last couple of days is the rather counterintuitive price action in the silver equities—especially on Tuesday—and even when they are getting sold down, they are not being sold down as hard as the gold stocks. This is something that I mentioned in yesterday's column that I'm watching carefully.
Something that I didn't notice until I was writing today's column is that despite the fact that silver got sold down for loses every day this week so far, there has been brief counter-trend rallies in that precious metal all three days during the New York trading session. I'm not sure if it means anything, but it's something that I just noticed, and that I'll be watching that going forward as well.
As I write this paragraph at 2:48 a.m. EDT, the London open is still a bit more than an hour away. Gold and silver prices aren't doing much of anything, but both platinum and palladium rallied a few dollars in early Far East trading on their Thursday morning, but have now been sold back to unchanged. Net volumes in gold are already quite high—and silver's volume is about average. The dollar index is down a handful of basis points from yesterday's close.
And as I prepare to send this off to Stowe, Vermont at 5:20 a.m. EDT, I see that gold hasn't done much now that London has been open a bit more than an hour, but the HFT boyz are putting pressure on silver—and have it well below its 50-day moving average at this point. Platinum is still trading around unchanged—and palladium is down about a percent. Net volume in gold is now north of 39,000 contracts—and silver's volume has doubled since I wrote about it the above paragraph—and is just over 12,000 contracts, so it's obvious that JPMorgan et al are buying all the longs that the technical funds are being forced to sell. It's the same old pattern that Ted Butler has been talking about for years. The dollar index isn't doing a thing.
Here's what the Kitco silver chart looked like as of 5:46 a.m. EDT.
I'm very much surprised that gold isn't being hit as hard as silver—but the trading day is still young—and I await the New York trading session with some interest, and trepidation.
See you here tomorrow.
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