I note that gold has now broken above its 50-day moving average
Gold traded flat until about lunchtime Hong Kong time on their Tuesday morning…and from there developed a negative bias that lasted until shortly after 12:00 o'clock noon in London. From there it rallied back to unchanged by the close of Comex trading in New York.
But in the electronic market that followed, the gold price added another ten bucks or so going into the 5:15 p.m. EDT electronic close. But after Monday's big run-up in price, it was a surprisingly uneventful day.
Gold closed the New York trading session at $1,347.70 spot…up $12.50 from Monday. Volume, net of roll-overs out of the August delivery month, were pretty light…around 103,000 contracts.
Silver was under selling pressure right from the beginning of trading at 6:00 p.m. EDT on Monday evening in New York. After a brief spike, it was all down hill until shortly after 12:30 p.m. BST in London. What followed was an uninspiring rally that lasted until shortly after 11:00 a.m. EDT in New York…and after that, the silver price traded pretty flat until 2:15 p.m. in electronic trading.
Then, like gold, the silver price ran up a bit…getting as high as $20.50 spot before trading sideways for the rest of the day. Silver closed at $20.49…down 5 cents from Monday's close. Volume, net of July and August, was around 41,500 contracts.
Both platinum and palladium ran into selling pressure in late Far East and early London trading yesterday…but both rallied back as the Tuesday trading session wore on. Platinum finished up a few bucks…and palladium finished down a few bucks.
The dollar index closed late Monday afternoon in New York at 82.22. It rallied about 15 basis points by mid-morning trading in London…and then sank just below the 82.00 level just minutes before 3:00 p.m. EDT in New York. From that low, the index rallied a handful of basis points and closed at 82.03 on the day…down 19 basis points from Monday. Nothing to see here.
The gold shares opened down a hair at the open of the New York equity markets yesterday morning…but they didn't stay there long…and by shortly after 10:00 a.m. they were in positive territory…and remained there for the rest of the day. The small rally that gold had in early electronic trading lit a bit of a fire under its associated stocks…and the HUI rallied right into the close…finishing almost on its high, up 2.94%.
Despite silver's rather sluggish price performance yesterday, the silver shares did pretty well for themselves, as Nick Laird's Intraday Silver Sentiment Index closed up a respectable 2.87%.
(Click on image to enlarge)
With the July delivery month winding down, there shouldn't be too much in the way of surprises between now and next Monday. But, for whatever reason, the CME didn't update their Daily Delivery Report with yesterday's activity, so there is no Issuers and Stoppers Report for Tuesday.
I must admit that I was surprised to see that there was another withdrawal from GLD yesterday. This time it was 48,307 troy ounces…and as of 9:26 p.m. EDT, there were no reported changes in SLV.
There was no sales report from the U.S. Mint.
There was more big moment in silver inventories over at the Comex-approved depositories on Monday. They reported receiving 605,399 troy ounces…almost all of it into JPMorgan's warehouse…and they shipped out 1,144,722 troy ounces. The link to that action is here.
In gold, these same depositories reported receiving a smallish 9,920 troy ounces…and all of it was received by Scotia Mocatta. The link to that activity is here.
Bron Suchecki from 'down under' at The Perth Mint, lays the backwardation issue to rest with these two charts that Nick Laird…also from 'down under'…provided.
Bron posted the current gold chart that everyone says shows backwardation in gold…and as Nick Laird said in this column last night…”That's not backwardation.”
Bron says that “This, is backwardation!!!
The link to Bron's actual posting on this, is here…and it's an absolute must read.
And I hope that these two charts put an end to this ridiculous discussion about what is, and isn't, backwardation. It's really unfortunate that there are no barriers to writing on the Internet, as the unsuspecting reader is getting very bad advice from people who really aren't qualified to give advice of any kind. And the louder the shouting from some of these 'analysts'…the bigger the crowds they seem to draw. This is the 21st century equivalent of selling snake oil out of the back of a covered wagon. So be on your guard, dear reader.
I'm happy to report that I don't have a lot of 'stuff' for you today, so I hope you can find the time to read what interests you.
I do know that JPMorgan has continued to be the dominant taker [or stopper] of delivery notices in the current July delivery month for silver. Leaving out the delivery notices the bank has stopped for clients, JPMorgan has taken, in its own name or house account…2,633 deliveries out of the 3,171 total deliveries made so far this month (including hundreds of contracts delivered by clients of JPMorgan to JPM’s house account). The more than 13 million ounces that JPM has taken delivery of this month would indicate that JPMorgan made a conscientious determination to acquire this silver, as does the data that show the bank has bought millions of shares of SLV (and may be covering additional millions of ounces of SLV short positions) and has bought back more than 125 million ounces held short in COMEX futures contracts. – Silver analyst Ted Butler…20 July 2013
After a very robust start to the week in both gold and silver on Monday, the Tuesday trading action turned out to be a dud. The only thing of interest was the fact that both metals posted their largest gains of the day in electronic trading after the 1:30 p.m. EDT Comex close…and I'm not sure what to make of that.
I note that gold has now broken above its 50-day moving average…and it remains to be seen how the shorts will react to this event as time goes by, as there were no signs of panic short covering yesterday…unless what happened in electronic trading qualifies, but I think not. Here's gold's 6-month chart…
(Click on image to enlarge)
Yesterday was the cut-off for Friday's Commitment of Traders Report…and I'll be more than interested in what the numbers show when the CFTC posts them on its website at 3:30 p.m. EDT on that day.
In overnight trading, most of the gains that gold and silver chalked up in the Tuesday afternoon electronic trading session in New York, were quickly dispatched during Far East trading on their Wednesday…and nothing much has happened since. Volumes are nothing special…and the dollar index isn't doing much, either.
I have no idea what to expect during the New York trading session today. Will prices continue to rally, or will JPMorgan et al engineer a 'failure' at the 50-day moving average? Or will it be another quiet day? Who knows. Not me, that's for sure. JPMorgan may have an idea, but whatever they have planned, they certainly won't be letting anyone know in advance.
See you here tomorrow.
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