We’re also coming up on the end of the the first quarter

It was another quiet day for gold yesterday.  After the usual dip in morning trading in the Far East on their Wednesday, the price began to rally once the gold market opened in London.  That rally lasted until the gold price pierced the $1,200 spot mark, which came at the open of equity trading in New York—and it was all down hill from there.

The low and high ticks were reported by the CME Group as $1,199.30 and $1,186.10 in the April contract.

Gold closed yesterday at $1,195.10 spot, up $1.90 from Tuesday’s close.  Gross volume was around 290,000 contracts, but it netted out at a very light 81,000 contracts, as the roll-over activity out of the April contract is really heating up.

It was exactly the same story in silver, so I shall spare you the play-by-play.  Silver made it through the $17 spot mark once the COMEX opened in New York at 8:20 a.m. EDT on Wednesday morning, but wasn’t allowed to close there.

The low and high were recorded as $16.84 and $17.14 in the May contract.

Silver finished the Wednesday trading session at $16.955 spot, up 1.5 cents from Tuesday’s close.  Net volume was pretty light at only 27,000 contracts, about the same as Tuesday’s volume.

The platinum chart was a carbon copy of the silver and gold charts.  That white metal closed at $1,141 spot, up 6 dollars on the day.

Palladium’s rally didn’t last as long—and was much weaker, but it still manged to close up a dollar on the day at $763 spot.

The dollar index closed late on Tuesday afternoon in New York at 97.24—and managed to hang around that number until shortly before 7 a.m. GMT, which was the open of the gold market in London.  From there it chopped lower, hitting its 96.58 low tick right at 8:30 a.m. in New York.  From there it rallied back to just a hair under the 97.00 level by 11:15 a.m. EDT, before selling off a handful of points into the close.  The index finished the Wednesday trading session at 96.93—which was down 31 basis points from Tuesday.

Here’s the 6-month U.S. Dollar Index to keep you up to date.

The gold equities opened in the black, but began to head lower almost immediately.  I would guess that part of the decline was due to what was going on in the gold market, but part of it was obviously selling in response to what was happening in the general equity markets yesterday.  In the end, the HUI closed down 1.47 percent.

The same can be said of the silver shares—as Nick Laird’s Intraday Silver Sentiment Index closed down 1.34 percent.

The CME Daily Delivery Report showed that 1 lonely gold contract, along with 129 silver contracts, were posted for delivery within the COMEX-approved depositories on Friday.   The big short/issuer was Credit Suisse.  They weren’t even close to being on my short list, so their appearance here is a big surprise.  But it should come as no surprise to anyone at this juncture, that it was JPMorgan as the big long/stopper once again.  They picked up 100 contracts in their in-house [proprietary] trading account, along with 14 contracts for their client account. The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Wednesday trading session showed that March gold open interest, after jumping up many hundreds of contracts on Tuesday, had them all subtracted out yesterday, as March o.i. dropped by 389 contracts back down to only 92 contracts remaining.  I don’t know what that was about.  Silver open interest fell by 134 contracts down to 212 contracts remaining, minus the 129 contracts in the previous paragraph, so we’re getting close to the bottom of the barrel for March deliveries in both metals.

There was another withdrawal from GLD yesterday, as an authorized participant took out 38,387 troy ounces.  Since the gold rally began a week ago—211,137 troy ounces of gold have been withdrawn from GLD—and nothing has been deposited.

There were no reported changes in SLV yesterday—and since the rally in silver began a week ago, there have been 2.01 million troy ounces of silver withdrawn from SLV, with nothing deposited.

The folks over at the shortsqueeze.com Internet site updated their website yesterday with the new short positions in both SLV and GLD as of mid-March.  The short position in SLV increased by a tiny 1.00 percent, from 16.87 million shares/troy ounces, to 16.95 million shares/troy ounces.  The short position in GLD rose by 13.23 percent, from 1.14 million troy ounces to 1.29 million troy ounces.  In terms of the number of shares involved for GLD, it would be ten times these amounts.

Just after I hit the ‘send’ button on today’s column, Switzerland’s Zürcher Kantonalbank updated their website with the data from their gold and silver ETFs as of the close of business on Friday, March 20—and this is what they had to report.  Their gold ETF took a big jump, as 21,834 troy ounces were added during the reporting week.  It was the same with their silver ETF, as 237,164 troy ounces were added.  These represent the biggest one-week additions in many years.

There was a tiny sales report from the U.S. Mint.  They sold another 72,000 silver eagles.

There was a lot of gold activity at the COMEX-approved depositories on Tuesday.  In the regular depositories there was only 835.900 troy ounces reported received—and 1,028.800 troy ounces shipped out.  Using the conversion factor of 32.151—a number that Nick Laird provided the other day—these amounts work out to within a whisker of 26 and 320 kilobars respectively.  The link to that activity is here.

Over in the week-old Gold Kilo Stock depositories, it was a very busy day indeed—and I’m trying to make some sense of what’s happening over there, as there have been huge in/out movements on a couple of days at Brink’s, Inc.  On Tuesday, they reported receiving 614,791.422 troy ounces [19,122 kilobars]—and they also reported shipping out 529,430.517 troy ounces, which works out to 16,467 kilobars.  The link to that activity is here.

It was pretty straightforward in silver, as 234,806 troy ounces were received by Canada’s Scotiabank—and 401,806 troy ounces were shipped out, with virtually all of it coming from the vaults over at HSBC USA.  The link to that action is here.

I’ve hacked and slashed—and cut back the stories to a reasonable number.

For a variety of reasons, not the least of which is that JPMorgan appears to be long physical up the ying yang—and the great setup in the COT market structure for both silver and gold, I’m still inclined to think the big move up in silver may be at hand. Of course, if conditions change, namely, if JPMorgan loads up on the short side of COMEX silver once again, I will change my opinion. But until that time, it still looks like silver (and gold) has the green light to the upside. And I suppose, if this is the start of the big silver move, then the negative collective sentiment should be considered a contrarian confirmation indicator for a price move higher.Silver analyst Ted Butler: 25 March 2015

I wasn’t expecting much in the way of price action yesterday—and that’s the way it turned out.  But even a cursory glance at the gold and silver charts shows that there wasn’t much action because “gentle hands” were there once again—this time at the open of the equity markets in New York, one of their favourite times to appear.

Here are the 6-month charts for all four precious metals once again—and as I pointed out yesterday, the rallies in gold and silver appear to be faltering at the moment.  But they’re only faltering because JPMorgan et al are painting the charts.

We’re also coming up on the end of the the first quarter—and there will be a lot of book-squaring in front of that, so prices may be somewhat more volatile than normal, but I doubt very much if they’ll be allowed get out of hand to the upside, but I’d love to be wrong about that.

As I type this paragraph, the London gold market open is fifteen minutes away.  After a quiet open in the Far East on their Thursday morning, the price began to rally a bit starting shortly before 9 a.m. Hong Kong time—and is still at it, and above $1,200 spot as I write this.  Silver is back above $17 spot, platinum is up 7 bucks—and palladium is up 4 dollars.  Net gold volume is just under 16,000 contracts, which isn’t a lot—and roll-overs are about a third of gross volume at the moment.  Silver’s net volume is sitting at 3,500 contracts, which is quiet as  well.  The dollar index is heading lower—and is currently down 21 basis points.

Today and tomorrow will be heavy volume days, as all the large traders [unless they’re standing for delivery] have to be out of the April gold contract by the close of COMEX trading on Friday.  And as I’ve said all week, I doubt if we’ll see any untoward moves in the precious metal prices—and as you can tell from the 6-month price charts posted above, “untoward” price movements aren’t being allowed.

And as I sent today’s column out the door at 5:20 a.m. EDT, I see that shortly after the gold market opened in London, the rallies in all four precious metals went vertical, which had all the hallmarks of a “no ask” market.  But shortly after 8 a.m. GMT, the not-for-profit sellers appeared in force—and are currently hard at work attempting to put these rallies back in the box.

Gold volume has exploded to 66,000 gross contracts—45,000 net.  And silver’s net volume is sky-high as well at 11,500 contracts.  The dollar index got as low as 96.21—but is 10 basis points off that low at the moment—and down 61 basis points from its Wednesday afternoon close in New York.

Here’s the Kitco gold chart as of 5:17 a.m. EDT, which was 9:17 a.m. in London.

I guess this is some of the price ‘volatility’ I spoke of as month end/quarter end approaches, but it’s still surprising to see as we head into options and futures expiry for the April delivery month.

Whether there’s more to come or not, is unknown—but as Ted Butler said in his quote above, we’re “locked and loaded” for price moves of biblical proportions if that’s what JPMorgan et al have been instructed to allow happen.  But at they moment, they’re fighting these rallies with everything they’ve got.

I’ll be more than interested to see what the lay of the land is like when I roll out of bed later this morning.

See you tomorrow.

Ed Steer

 

Here are four more hummingbird photos from the group that reader M.A. sent our way on Monday.  These fellows are rufous hummingbirds—and it’s a North American species that is very common on the west coast—and as far north as Alaska in the summer.  It, along with the ruby-throat, is a hummingbird that I’m more than familiar with.  Depending on your viewing angle and available light—and whether they’re “on display” or not—they can look quite different from various viewpoints, as they can flash their iridescence at will—mostly at other male hummingbirds.

Despite their diminutive size, the male hummingbird of this [or any other] species has an A-type personality of the first order of magnitude—and to watch them go at each other in a territorial dispute, defence of a hummingbird feeder, or a prospective female, is awesome to watch.  Photo #4 is a good example of the male all puffed up and rarin’ for a fight.  I’ve never seen “attitude” like this in such a tiny creature—and they are tiny.  A large female of this species might weigh 5 grams, the male considerably less.  Yet they fly 2-3,000 kilometers twice a year during their annual migrations.