The high-frequency trader were ever vigilant as the deficit crisis went down to the wire

Gold didn't do much of anything in Far East trading on their Wednesday, but the smallish rally going into the London open proved to be the high tick of the day, as a seller showed up immediately.  The gold price then sold down a bit into the London a.m. gold fix, rose into the noon BST silver fix, before getting sold down to its low of the day which occurred at precisely 3 p.m. BST, which was the close London close.  That was 11 a.m. in New York.

The tiny rally that followed got capped just minutes after the 1:30 p.m. Comex close, and that was it for the day.

The high and low ticks in the December contract were reported by the CME as $1,289.20 and $1,268.60.

Gold closed the Wednesday session at $1,282.70 spot, up $1.70 from Tuesday.  Volume, net of October and November, was pretty decent at 177,000 contracts, most of which were of the HFT variety.

Here's the New York Spot Gold [Bid] chart on its own so you can see the precise timing of the low tick at the London close.

The silver price traded erratically within a very tight range everywhere on Planet Earth on Wednesday.  The highs and lows aren't worth mentioning.

Silver closed at $21.42 spot, up a whole 12 cents from Tuesday.  Net volume  was pretty decent as well, at 43,000 contracts.

Both platinum and palladium had an easier time of it.  Here are the charts.

The dollar index closed in New York at 80.42 on Tuesday afternoon.  Its Far East high of 80.57 came at 9:30 a.m. in Hong Kong.  At that point it headed slowly lower, hitting its low tick of 80.29 just before the 8:20 a.m. EDT Comex open.  The subsequent rally peaked out at 80.75 about 12:15 p.m. in New York before sliding back to 80.40 by 2 p.m.  After that it didn't do much.  The index closed at 80.40, which was up eight basis points on the day.

The gold stocks opened lower, and were down over 2% within the first 45 minutes of trading.  The subsequent rally took the stocks back to unchanged, but they couldn't hold it.  By the close, the gold equities were back almost to their low of the day.  The HUI finished down 1.68%, giving up over half their Tuesday gains.

The silver stocks did somewhat better.  The chart pattern was the same, but they never got sold down as hard as the gold equities at the open, and even traded in positive territory for a bit before rolling over.  Nick Laird's Intraday Silver Sentiment Index closed down 0.71%.

The CME's Daily Delivery Report showed that 58 gold and zero silver contracts were posted for delivery within the Comex-approved depositories on Friday.  Canada's Bank of Nova Scotia issued 56 of those contracts, and JPMorgan Chase stopped 55 contracts.  The link to yesterday's Issuers and Stoppers Report is here.

Another day, and another withdrawal from GLD.  This time it was 115,828 troy ounces.  And as of 9:53 p.m. EDT, there were no reported changes in SLV.

Over at Switzerland's Zürcher Kantonalbank for the week ending 11 October, they reported small declines in both their gold and silver ETFs once again.  In gold it was 20,393 troy ounces, and in their silver ETF it was 219,814 troy ounces.

There was a tiny sales report from the U.S. Mint yesterday.  They sold 1,000 ounces of gold eagles and 1,000 one-ounce 24K gold buffaloes.

It was fairly busy at the Comex-approved depositories in gold on Tuesday.  They didn't report receiving any, but they did ship out 51,201 troy ounces.  Almost all of the warehouses were involved to a certain extent, and the link to yesterday's activity is here.

It was another big day for silver at these same depositories.  They reported receiving 321,474 troy ounces, and shipped out 1,149,701 troy ounces.  Virtually all of the activity was within the Scotiabank depository.  The link to that action is here.  And please note Ted Butler's comments on this in the quote in The Wrap section further down.

I don't have a lot of stories again for you today, but I hope you find some that interest you in the list posted below.

A three to four million troy ounce gross turnover [in silver] weekly [on the Comex] is the equivalent of 150 to 200 million ounces annually, or 15% to 20% of total world production (mine, plus recycling) and total world silver demand and total world inventory of silver in 1,000 oz bar form. That such a large percentage of the world’s silver production, consumption and inventory is being moved into and out from the COMEX is astounding. Obviously, most of the world’s silver production and consumption occurs in areas where it would be impossible to be funneled in and out of the COMEX; so that, in effect, increases the true percent of COMEX silver being turned over relative to the world. Thus, the turnover is even more astounding and indicative of silver tightness.Silver analyst Ted Butler: 12 October 2013

Wednesday was just another day when gold was held in check, as the high-frequency trader were ever vigilant as the deficit crisis went down to the wire.  Three things gave that away; the timings of the declines and rallies during the Wednesday trading session, the big volume on small price changes, and the rallies that began in all four precious metals shortly before 9 a.m. BST in London this morning.

With some, if not most, U.S. government employees heading back to “work” today, it will be interesting to see if the CFTC has a Commitment of Traders Report tomorrow.  I'll also be looking for the long-delayed monthly Bank Participation Report as well.  If they do put in an appearance, then I'll have all the details in Saturday's column.

And as I hit the send button on today's missive, I note that these moon shot price rises all ran into not-for-profit sellers immediately.  Volumes in both gold and silver as of 5:20 a.m. EDT are over the moon:  more than 75,000 contracts in gold, and 23,000 contracts in silver.  This means that the sellers of last resort; JPMorgan Chase et al are throwing everything they have at this rally, so the price management scheme is still intact.  Gold is hanging on to the $1,300 price mark by its proverbial fingernails, and “da boyz” have silver well below the $22 spot price mark once again.  The high price ticks in the December contract at 9 a.m. BST in London were $1,320.50 and $22.18.  And based on the current price action, I would guess that those will be the highs for the day, and maybe for the week.  However, I'd love to be proven wrong, so we'll just have to see what today and tomorrow have in store for us.

Here are the Kitco charts as of 5:20 a.m. EDT

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Before heading off to bed, I'd like to run something by you.  My good friend Dennis Miller at Casey Research writes a column entitled “Miller's Money Forever.”  It's a subscription service with a 90-day money back guarantee.  He also provides a news letter headlined “Miller's Money Weekly“, and like my daily column it's ABSOLUTELY FREE!

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That's it for today, and based on the current price action, the rest of the week's trading activity in all four precious metals will be worth watching.

See you here tomorrow.

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