If you needed more proof that silver is at the centre of the known universe for JPMorgan et al, it was provided for you yesterday.

All was quiet both price wise and volume wise during Far East trading during their Monday, but moments after London opened yesterday morning, the bid disappeared and the gold price dropped ten bucks in about fifteen minutes.

From there it flat-lined up until about lunchtime local time…and then headed lower once again.  The low price tick [$1,622.10 spot] came right at the Comex open in New York at 8:20 a.m. Eastern time.

From there it worked its way slowly higher…and closed at $1,638.30 spot…down $4.10 on the day…and about $16 off of its low.  Net volume wasn’t overly heavy at around 112,000 contracts.

Silver got sold off about a dime the moment that trading began in New York on Sunday night…and traded around the $31.60 spot price mark up right up until shortly before 1:00 p.m. Hong Kong time.  Up until that point, volume had been vanishingly small, but once the high-frequency traders showed up, all the changed…and by shortly before lunch in London, silver was down about 40 cents from it’s Friday close.

Once the daily silver ‘fix’ was in around that time, the price was engineered lower…and once the Comex opened in New York, silver was down about $1.20 from its Friday close in New York.

The price recovered a bit from there, but about 12:45 Eastern, the price rolled over…and forty minutes later, silver hit its low price tick of the day…$30.40 spot…just a few minutes before the close of Comex trading at 1:30 p.m. before rallying a bit up until 2:15 p.m. Eastern time.  From there it traded flat into the close of electronic trading in New York.

Silver closed the day at $30.81 spot…down 84 cents…and had an intraday price move of 4.1 percent.  Gross volume was immense, but the net volume was only 36,000 contracts.

The dollar index gapped up a bit at the open on Sunday night…but then traded flat until about 1:00 p.m. in Hong Kong…the very time that the silver price began its journey to the nether reaches of the price chart.  The high tick of the day [about 79.63] came around 10:15 a.m. in New York on Monday…and by the close of trading had given back a large chunk of that gain.  The dollar index closed up about 20 basis points on the day

Based on the timing of the inflection points in both gold and silver prices yesterday, it’s more than a stretch to say that the precious metals pricing had much to do with what the dollar index was doing. 

The gold stocks gapped down at the open…and hit their nadir around 10:20 a.m. Eastern…which was the top of the move in the dollar, right to the minute.  The gold stocks gained back some of the loses with an hour of their low, before basically trading sideways for the rest of the trading day.  Despite the fact that gold was only down about four bucks…the HUI finished down 2.39%.

The silver stocks got it in the neck once again…and Nick Laird’s Silver Sentiment Index got smacked to the tune of 2.87%.  Most silver stocks are now trading at their 52-week lows.

(Click on image to enlarge)

The CME’s Daily Delivery Report showed that 101 gold and 1 lonely silver contract were posted for delivery tomorrow.

The GLD ETF showed that an authorized participant withdrew 135,948 troy ounces of gold yesterday.  That’s the first time since April 10th…and only the second time this month…that there has been any activity in GLD, in or out.  There were no reported changes in SLV.

There was a sales report from the U.S. Mint yesterday.  They sold 1,500 ounces of gold eagles…400,000 silver eagles…and 2,000 one-ounce 24K gold buffaloes.  Month-to-date the mint has sold 17,000 ounces of gold eagles…9,000 one-ounce 24K gold buffaloes…and 1,280,000 silver eagles.

The Comex-approved warehouses reported receiving 1,847,666 troy ounces of silver on Friday…and shipped out an insignificant 2,003 ounces of the stuff.  That amount of silver received is equivalent to one day of world silver production.  JPMorgan took in 620,615 ounces of that.  The link to Friday’s activity is here.

Silver analyst Ted Butler had his usual weekend commentary for his paying subscribers…and here are two free paragraphs.

“As I have written before, in studying the COMEX silver warehouse stocks for more than 30 years, I have never been able to decipher a connection between the warehouse data and price. But always in the past, large increases or decreases in COMEX silver inventories were eventually explained by other public developments. Invariably, increases in COMEX silver stocks are interpreted bearishly in that a surplus is the most logical conclusion…and the opposite for inventory reductions. But there are too many variables for there to be only those black and white conclusions…and past price history renders them invalid anyway. All that said, I am still taken back by the turnover in COMEX silver inventories.”

“This past week, turnover in COMEX silver inventories was more frenzied than ever. There were two days of net withdrawals of more than 2 million ounces. For the week, total COMEX silver stocks were down nearly 3 million oz to 138.7 million oz. I am not celebrating the reduction, but highlighting the overall turnover. The “churn” in inventories is what has my attention. Why is so much silver being moved in and out of these warehouses? Coincidently, there was also a big reduction this week in the holdings of the big silver ETF, SLV, on the order of 3 million ounces that did not look at all related to plain vanilla investor liquidation. The most plausible alternative explanation is that the metal was more urgently needed elsewhere. Here’s an interesting factoid – just as commentaries concerning the record increase in COMEX silver stocks have circulated, over the past 4 weeks, the combined total silver holdings in the COMEX and SLV have declined by 2 million ounces. My point is not the total level of silver inventories, but the movement.”

Reader Scott Pluschau posted a blog about silver yesterday morning…long before the markets in New York were open in New York…but it was obvious that silver was going to have a bad day even then.  When the price activity for New York began, Scott mentioned the fact that “They may get the specs to short, which is what I suspect they are more interested in.”  Ted Butler said precisely the same thing later in the morning, as he said that it was textbook price action for that sort technical fund activity…and it’s entirely possible that the low that came just before the Comex close was a technical fund[s] short position[s] being placed.  The link to Scott’s blog on silver, is here.

The following snippet came from the April edition of Casey Research‘s BIG GOLD…”VIA MAT International (VMI) gold storage limit temporarily reached: Due to high and growing demand for its services, VMI reached its insurable limits at its vaults in Zurich, Hong Kong, and London, and cannot accept new customers. We spoke with VIA MAT and were told they are investing in new facilities at all three locations. Hong Kong is expected to be ready this May, and Zurich in June or July. No word yet on London. In the meantime, VMI is placing customers on a waiting list.”

Here’s an interesting ad that a doctor ran in Florida’s Panama City News Herald earlier this year…and I thank reader “Rocky R” for sharing it with us.

Despite my ‘scorched earth’ editing procedure for this column, I have a rather large number of stories for you today and, as always, I’m delighted to leave the final edit up to you.

Apparently, I’m supposed to be more angry about what Mitt Romney does with his money than what Barack Obama does with mine. – Author unknown

Well, if you needed more proof that silver is at the centre of the known universe for JPMorgan et al, it was provided for you yesterday.  I just don’t know how much more obvious it has to get than that.

Options and futures expiry for the May delivery month in silver is upon us…as is the FOMC meeting over the next couple of days…so I’d guess that one or more of these events brought on the engineered sell-off in silver yesterday.

Is it over?  Beats me.  Can ‘da boyz’ take the price lower from here?  Sure, but how many more spec longs are they going to be able to get to sell…or go short?  There is a limit…and the law of diminishing returns sets in quickly when prices get this close to the bottom of the barrel.

But, as Ted Butler said on the phone yesterday, you can never underestimate the criminality of the sociopaths that are running this price rigging scam…and I heartily agree with that assessment.  It will be over when it’s over…and we won’t know when that is until after the fact.  Yesterday’s low at 1:25 p.m. in New York sure looked like it to me…but as I’ve said on numerous occasions in the past, I wouldn’t bet the ranch on it.

About ten years ago…GATA’s secretary treasurer, Chris Powell, having finally discovered the forces that GATA was up against, said that we were fighting “all the power and all the money in the world”.  At the time we didn’t know how right he was.

The gold price sold off a few dollars in Far East trading during their Tuesday, but caught a bit of a small bid at the London open earlier this morning…and as of 5:15 a.m. Eastern time, the gold price is basically unchanged from its closing price in New York on Monday…and the same can be said for silver as well.  Gold volume is pretty light…and silver’s volume is much higher, but a lot of that is roll-overs out of the May contract.  Once you subtract out that volume, silver’s volume is light as well.

The dollar index was down a bit in Far East trading, hitting its low price tick at precisely 8:00 a.m. in London…and is now mostly unchanged from yesterday’s New York close as well.

I haven’t the foggiest idea of what will happen during New York trading today…so nothing will surprise me when I switch my computer on later this morning.

That’s more than enough for one day…and I’ll see you here tomorrow.

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