We’ll just have to wait and see what JPMorgan et al have in store for us

It was a nothing day in both gold and silver on Wednesday—probably helped out by the big winter storm on the U.S. east coast yesterday.  Volume was light—and the high and low ticks aren't worth looking up.  However, some thoughtful soul showed up in the electronic market and sold the price down for a small loss on the day.

Gold closed at $1,236.80 spot, down $3.80 from Tuesday's closing price.  Net volume was only 75,000 contracts.

It was precisely the same story in silver—and the attempt to rally above the $20 spot price mark at 1 p.m. Hong Kong time got turned back.  After that it followed the gold price pattern exactly, including the tiny sell off after the Comex close.

Silver finished the Tuesday session at $19.795 spot, which was down 7 cents on the day.  Volume was a tiny 17,500 contracts.

After some rather small down-up-down price action starting around 1 p.m. Hong Kong time, the platinum and palladium markets didn't do much either—finishing mostly unchanged.

The dollar index opened the Wednesday trading day at 81.07—and then rallied a bit up to 81.19 just before the London open.  It was all down hill to the 80.97 low of the day that came shortly before 9 a.m. in New York.  But someone was there to catch that proverbial falling knife once again—and the index rallied to close back on its high of the day at 81.19—which was up 12 basis points from Tuesday's close.

The gold stocks gapped down almost 2% at the open—and then headed lower from there, with most of the losses in by around 12:20 p.m. EST.  After that, the index chopped sideways for the rest of the day.  The HUI finished down 2.77%.

It was more or less the same chart pattern in the silver equities—and Nick Laird's Intraday Silver Sentiment Index closed down 1.79%.

The CME Daily Delivery Report showed that 20 gold and 143 silver contracts were posted for delivery within the Comex-approved depositories on Friday.  In gold, JPMorgan was the issuer of all 20 contracts—and Canada's Bank of Nova Scotia stopped them all.  In silver, it was Jefferies delivering 117 of those contracts—and JPMorgan [out of its proprietary trading account] provided the rest.  Canada's Scotiabank stopped them all as well.  The link to yesterday's Issuers and Stoppers Report is here.

There was another withdrawal from GLD yesterday.  This time an authorized participant redeemed GLD shares totaling 38,567 troy ounces.  And as of 10:01 p.m. EST yesterday evening, there were no reported changes in SLV.

The U.S Mint had a smallish sales report yesterday.  They sold 5,000 ounces of gold eagles—and 25,000 silver eagles.

There was no in/out movement in gold at the Comex-approved depositories on Tuesday.

There wasn't much movement in silver, either—as 97,824 troy ounces were reported received—and 81,748 troy ounces were shipped out.  The link to that activity is here.

The Central Bank of the Russian Federation finally got around to updating their website for December—and for the first time in four months they added to their gold reserves.  This time it was 700,000 troy ounces.  Their total gold reserves that they're reporting on their website now totals 33.3 million troy ounces.  For all of 2013 they added 2.5 million troy ounces to their 'reported' reserves—about 79.5 metric tonnes.

It's estimated that Russia will produce about 240 metric tonnes of gold in 2013—so it appears that only a third of what they produced last year is going into their reported reserves.  But as I've speculated before, there's a chance that the Russians may be learning from the Chinese—and not reporting all they're doing in this regard.  Only time will tell if that's the case or not.

Here's Nick Laird's wonderful chart showing the December addition.

I have the usual number of stories for a weekday column and, as always, the final edit is all yours.

Because it was on the wrong side of the silver market on the run up to $49 in April 2011, I think JPMorgan came to realize just how tight the physical silver market had become and would, one day, become tight again in the future. Their only choice was to team up with other collusive commercials [and the CME Group] and arrange for the unprecedented price slam down in May 2011 which resulted in silver prices falling $15 within a week. That price slam (as well as a similar $15 slam in three days in September 2011) broke the back of investment demand and allowed for full price control to revert to JPMorgan. But having seen just how tight the physical silver market had become, JPM decided to build a long physical position. After all, no entity is more familiar with the day to day logistics of silver than JPMorgan.Silver analyst Ted Butler: 22 January 2014

It was a snoozer of a day on Wednesday—and there's nothing that can, or should, be read into the price activity of any of the four precious metals.

Both gold and silver are slightly below their respective 50-day moving averages after yesterday's price action—and we'll just have to wait and see what JPMorgan et al have in store for us for the remainder of the week.

We also have the FOMC meeting on Tuesday and Wednesday of next week—and I'd bet that “da boyz” will use it as another excuse to pound the crap out of all the precious metals.  I'd love to be proven wrong, of course, but using the past a prologue, any bet I'd make on this outcome is pretty safe.  We'll see.

There are still a hundred or so gold contracts left open in the January delivery month, but after yesterday's big delivery notice in silver, there are very few contracts left open in the January delivery month for that metal.  But, having said that, of the 143 silver contracts posted for delivery tomorrow—96 of them were added yesterday, so someone needed a decent amount of that metal on zero notice.

In Far East trading on their Thursday, gold got sold off a few dollars, but has recovered all of that now that London has been open 15 minutes.  Silver also got sold off to a new low for this move down at 10 a.m. Hong Kong time, but is now back to unchanged on the day as well.  Platinum is down 11 bucks—and palladium is flat.  Gold volumes are about average for this time of day—and silver's volume is pretty light.  However, almost all the volume is in the current front months, so that indicates that most of it is of the HFT variety.  The dollar index, which had peaked around 81.28 at 9 a.m. Hong Kong time, has now rolled over with a vengeance—and is about to slice through the 81.00 mark as I type this paragraph at 3:19 a.m. EST.

Then at 9:45 a.m. in London, gold and silver spiked higher—and as I type this paragraph at 5:00 a.m. EST, gold is up about 11 bucks—and silver has jumped 35 cents.  Volumes have also exploded in both metals, up about 50% from 90 minutes ago, so these rallies are not going unopposed as JPMorgan et al are obviously throwing as much Comex paper as necessary at these price spikes to prevent them from getting totally out of hand.  Gold volume is now approaching 40,000 contracts net.  Silver volume currently sits just under 9,000 contracts.  The rallies in platinum and palladium are much more subdued.  The dollar index has fallen all the way down to 80.84 at the moment.

Here are the gold and silver charts as of 5:20 a.m. EST

We'll see what happens as the remainder of the trading day unfolds in London—but especially to what happens during the Comex trading session in New York.

See you tomorrow—and I hope that all my readers west of the International Date Line have a good weekend.

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