We’re still all set up to blast off, if that is the will of JPMorgan et al
The gold price did very little on Wednesday, trading in a tight ten dollar price range for the entire day, and the highs and lows aren't worth mentioning. The high, such as it was, came at the London p.m. gold fix, and from there sold off gently into the close.
Gold closed the Wednesday session in New York at $1,252.30 spot, which was down $9.70 on the day. Net volume was on the lighter side at 126,000 contracts.
Except for the fact that silver's high tick came shortly before the equity markets opened in New York yesterday, the silver price chart was a carbon copy of the gold price chart. The silver price traded in a 25 cent price range for the entire day.
The low and high, such as they were, were reported by the CME as $20.245 and $20.44 in the March contract.
Silver closed at $20.30 spot, down 13 cents from Tuesday's close. Net volume was fairly decent at 34,000 contracts.
Platinum and palladium didn't do much, either. Here are the charts.
The dollar index closed late on Tuesday afternoon in New York at 79.98–and then chopped a hair lower during the Wednesday trading session, finishing the day at 79.87–which was down 11 basis points on the day. Nothing to see here.
Not surprisingly, the gold stocks opened down a bit, and then didn't do much until noon EST. Then a seller showed up for the rest of the day in what appeared to be a deliberate event, as the selling was relentless for the rest of the day, with the gold stocks closing right on their lows. The HUI finished down a whopping 3.81%–giving back almost all of Tuesday's big gain.
It was virtually the same in the silver equities. Even though silver was only down about half a percent, the stocks got bludgeoned in the same manner as the gold shares. Nick Laird's Intraday Silver Sentiment Index closed down 3.28%.
This is the second time in the last two weeks that a big 1-day gain in precious metal stocks had almost vanished by the end of the following trading day. Note the “Latest Month” insert on Nick's chart just above. None of this activity looked like natural market forces to me–but what is these days.
The CME's Daily Delivery Report showed that 44 gold and 23 silver contracts were posted for delivery within the Comex-approved depositories on Friday. Of the 44 gold contracts issued, JPMorgan stopped 43 of them, all in their in-house [proprietary] trading account. In silver they stopped 16 contracts in their proprietary trading account. The beat goes on despite the new Volcker rule, and the link to yesterday's Issuers and Stoppers Report is here.
There was another withdrawal from GLD yesterday. This time an authorized participant took out 67,524 troy ounces. And as of 10:27 p.m. yesterday evening, there were no reported changes in SLV.
Over at Switzerland's Zürcher Kantonalbank for the week ending on Friday, December 6–they reported a decline of 39,612 troy ounces in their gold ETF, but a tiny increase of 5,691 troy ounces in their silver ETF.
There was no sales report from the U.S. Mint.
Over at the Comex-approved depositories on Tuesday, they reported receiving 64,300 troy ounces of gold—precisely two metric tonnes to the ounce, so it was probably all in kilobar form once again. That gold went into JPMorgan's vault. There were 22,745 troy ounces shipped out, and all of that came from Scotia Mocatta. The link to that activity is here.
There was more volume activity in silver, of course. These same depositories reported receiving 479,614 troy ounces, and shipped out 202,762 troy ounces. The link to that action is here.
I have the usual number of stories for a mid-week column, and I hope you find a few in here that you find worthy of your attention.
This is a very unusual set up, bullish almost beyond description and not one that I can recall seeing previously. There are many tens of thousands of technical fund short positions open in Comex silver and gold that are close to turning into a very large loss. Importantly, the 50-day and 200-day moving averages are only slightly higher than the loss demarcation point. My strong sense is that the technical fund shorts are trapped–and in a short time that will become obvious in the price. It’s also important to remember that the technical funds have chosen to establish record short positions with gold and silver prices close to or below the marginal cost of production. This highlights the precarious nature of the tech fund short positions. – Silver analyst Ted Butler: 11 December 2013
I must admit that I was expecting somewhat more price action than we got during the Wednesday trading session, and I'm at a bit of a loss to explain the big sell-off in the precious metal equities, because they were out of all proportion to the price declines in both gold and silver.
There isn't much I can add to what I said at the top of th is column. We're still all set up to blast off, if that is the will of JPMorgan et al—plus we get the Commitment of Traders Report tomorrow afternoon.
But since Ted mentioned the 50 and 200-day moving averages in both gold and silver in the quote above, I thought maybe I should post the six-month charts on both metals so you can see them for yourself—and here they are.
Far East trading was comatose from a price perspective on their Thursday, and volumes were extremely light in both metals. And not much is happening now that London has been open about 15 minutes as I write this paragraph. The dollar index is chopping sideways just under 80.00 mark.
And as I prepare to send today's efforts down to Stowe, Vermont—I note that a not-for-profit seller put in an appearance just before 9:30 a.m. GMT in London. Both platinum and palladium are down a hair, but the real selling pressure, as usual, is in both silver and gold. Gold is down about fifteen bucks from its high at the London open, and silver is down almost 45 cents. Needless to say, volumes have really blown out, as they are well over double what they were before this bout of selling began. The dollar index is up a handful of basis points, but not over the 80 cent mark as of 5:15 a.m. EST.
Here's the Kitco silver chart as of 5:17 a.m. EST.
What this portends for price action in New York today is not known, but nothing will surprise me when I check in after I roll out of bed later this morning. However, it's obvious that JPMorgan et al are still at it.
See you tomorrow.
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