Any significant rally will be met by the usual phalanx of not-for-profit sellers
The gold price didn't do much in Far East trading session on their Tuesday. It began to rally starting around 8:30 a.m. BST in London—and that happy state of affairs lasted until 1:00 p.m. BST. The rally got capped at that point—and JPMorgan et al finished the job twenty minutes later when the COMEX opened. The New York low came at the London p.m. gold fix—and it rallied from there until around 12:45 p.m.—and that was it for the day.
The gold price traded within a ten dollar range yesterday, so I shall dispense with the high and low ticks, although gold managed to close back above the $1,200 spot mark, but only by a buck or so.
The gold price ended the Tuesday session at $1,201.80 spot, up an even 6 dollars from Monday's close. Net volume was pretty light at only 97,000 contracts—and well over 90 percent of it was in the current front month, so it was mostly the HFT boyz keeping the price in check.
It was almost the same chart pattern in silver—and you don't need me, or anyone else offering you analysis, as you've seen it all before.
The high and low ticks were reported by the CME Group as $16.165 and $15.86 in the May contract.
Silver finished the day at $15.98 spot, up 4 cents from Monday's close. Gross volume was huge, but it netted out to only 25,000 contracts, as the roll-overs out of the May contract are well under way.
If you've seen that platinum chart before, it's because it's almost a carbon copy of the gold and silver charts posted above. Platinum closed at $1,148 spot, up two bucks on the day.
The palladium chart was a mere shadow of the platinum chart—and that white metal was closed at $766 spot, down five dollars from Monday.
The dollar index closed late on Monday afternoon in New York at 97.90—and didn't do much until shortly after 1 p.m. Hong Kong time. Then away it went to the upside, topping out at 98.45 at 8:30 a.m. in London trading. It was mostly down hill from there into the 97.67 low that came about 12:15 p.m. EDT in New York. From that point it rallied up to the 98.00 mark shortly after 2 p.m.—and traded a hair under it for the remainder of the Tuesday session. The dollar index closed at 97.99—up 9 basis points from Monday's close.
The gold stocks opened unchanged—and hit their lows of the day about two minutes after that. From that point they chopped higher until they topped out just before 1 p.m. EDT, which was the end of the rally in New York. From there they gave back some of their gains going into the close. The HUI finished up 0.88 percent, which is certainly better than the alternative.
I wish I could say nice things about the silver equities, but can't—as they remained firmly underwater all day long. And even though silver closed in positive territory, the equities finished lower, as Nick Laird's Intraday Silver Sentiment Index closed down 1.02 percent.
On Monday, silver closed down 28.5 cents, but their corresponding equities closed up on the day. Go figure.
Here's Nick Laird's long-term Silver 7 Index—and as you can see, we're barely off last November's low—and it would take a 300 percent increase in this index to get us back to where we were on the Friday before the JPMorgan-sponsored drive-by shooting on May 1, 2011.
You'd think that the silver miners would show some interest in what happened to the price way back then—and even now. But, as you already know dear reader, you would be wrong about that. Only First Majestic Silver has raised a finger or two—but that's as far as they've gone.
The CME Daily Delivery Report showed that 54 gold and 150 silver contracts were posted for delivery within the COMEX-approved depositories on Thursday. HSBC USA was the biggest short/issuer in gold with 52 contracts. Canada's Scotiabank stopped 28 of them—and JPMorgan stopped 26 in its in-house [proprietary] trading account. HSBC USA was the only short/issuer in silver—and Canada's Scotiabank stopped 144 of them. The link to yesterday's Issuers and Stoppers Report is here.
The CME Preliminary Report for the Tuesday trading session showed that gold open interest, not surprisingly, dropped by a further 661 contracts—and is now down to 525 contracts still open in the April delivery month, minus the 54 contracts posted above, of course. In silver, April o.i. increased by one contract to 173, but from that amount, the 150 contracts posted for delivery tomorrow must be netted out—and that will be reflected in tomorrow's preliminary report.
There was another very decent deposit in GLD yesterday, as an authorized participant added 105,534 troy ounces. And as of 9:44 p.m. EDT yesterday evening, there were no reported changes in SLV.
There was also a decent sales report from the U.S. Mint as well. They sold 3,000 troy ounces of gold eagles—1,000 one-ounce 24K gold buffaloes—and another 482,000 silver eagles.
It was a pretty busy day in gold over at the COMEX-approved depositories on Monday, as they reported receiving 31,982 troy ounces—and shipped out a chunky 118,024 troy ounces. The big receipt was at HSBC USA—and the big withdrawal was from Canada's Scotiabank. The link to that activity is here.
In silver, nothing was reported received—and 468,850 troy ounces were shipped out. Most of the out activity was at Brink's, Inc.—and the rest was from Canada's Scotiabank. The link to that action is here.
Over at the COMEX-approved depositories in Hong Kong they continued to add to their gold kilobar stocks at a frantic pace. At the Brink's Inc. depository on Monday they added 3,699 kilobars—and shipped out only 375 kilobars. This depository has only been open about a month—and they're already at 19,579 kilobars, or 1.27 million troy ounces. The link to Monday's activity in troy ounces is here.
Here's a newly-minted chart courtesy of Nick last night that he was kind enough to churn out on a moments notice at my request—and it shows the activity at the Brink's Hong Kong depository since it's inception last month.
Here's a chart the Dan Lazicki “borrowed” from the bullionstar.com Internet site—and it speaks volumes about the value of paper/plastic money vs. physical gold bullion. It shows how many grams, or fractions of grams, a single U.S. dollar bill would purchase from January 1, 1968—up until January 1, 1980. At its maximum in 1970, a greenback would have bought about 0.90 grams. In 1980 it was down to 0.06 grams per dollar. In 2015 dollars, it would be a tiny fraction of 0.06 grams.
I got an e-mail from Joshua Gibbons yesterday evening—and as you know, he's been on Kitco's case about their pool accounts—and he has updated his website in that regard—and it's definitely worth reading. The link is here.
I don't have a lot of stories for you today—and I hope it stays that way as the evening progresses.
Not only does the delivery data on the March futures contract confirm that JPMorgan took delivery of 1,500 COMEX contracts in their own account, the physical movement of metal, mostly from other COMEX silver warehouses, also confirms JPMorgan continues to acquire actual metal and plans to hold onto it in the most cost effective manner (no outside storage fees). I’ve been beating on the drums about JPMorgan accumulating physical silver for quite some time (long before the ironclad proof of the March deliveries occurred) and it occurs to me my estimates of what JPM may hold may be a bit out of date.
I’ve been speculating for some time (six months or longer) that JPMorgan had amassed upwards of 300 million oz of physical silver in all forms since April 2011 (mostly in the form of 1,000 oz bars, but also as much as 60 -70 million oz in Silver Eagles). It’s been my private estimate all along that JPM was continuing to pick up additional quantities of actual silver at the rate of 5 to 10 million oz a month. It would appear that JPMorgan exceeded the upper band recently, but my point is that due to the passage of time and the continuing evidence that the bank is still accumulating silver, I must up my estimate of their total holdings to 350 million oz or more. – Silver analyst Ted Butler: 18 April 2015
In a trading pattern which is more than familiar, the rallies in Far East and London trading were summarily dealt with once the COMEX session in New York began. True, the rallies were capped twenty minutes before then, but the engineered price declines really began in earnest in New York trading.
Not that that it matters really, because it's just JPMorgan et al in London handing it off to JPMorgan et al in New York.
Here are the 6-month charts for all four precious metals as of the close of trading yesterday—and there really wasn't much in the way of significant change. However, that certainly wouldn't have been the case if “da boyz” hadn't been waiting in the wings as they were—like they are every day.
And as I write this paragraph, the London open is fifteen minutes away. After selling down below the $1,200 spot mark in morning trading in the Far East on their Wednesday, the gold price began to rally a bit in early afternoon trading over there—and is back above the $1,200 spot price mark at the moment, plus it's a few dollars above its Tuesday close in New York as well. The same can be said of the other three precious metals.
Net gold volume is just over 12,000 contracts—and there's a bit more roll-over volume so far today than there was this time on Monday. Net silver volume is pretty light, around 2,500 contracts—and roll-over action is decent once again.
The dollar index, which made it up to 98.10 in mid-morning trading in Hong Kong, has now rolled over—and is about 35 basis points off its high, and down 21 basis points from Tuesday's close in New York.
Since yesterday was the cut-off for this Friday's Commitment of Traders Report, just a casual glance at the last five trading days, leaves me with the impression that there won't be much change in the Commercial net short position in gold. However, since we're back above the 50-day moving average, albeit by a small amount, that may have changed things, so we'll have to wait and see. Silver looks better—and hopefully the numbers will reflect that.
We're still quite some distance from wildly bullish—and as Ted Butler has stated on several occasions, market neutral would be closer to the mark, so prices could go in either direction. However any significant rally will be met by the usual phalanx of not-for-profit sellers.
And as I send today's column out the door at 5:15 p.m. EDT, I note that the tiny rallies in all four precious metals didn't make it past the London open—and except for platinum, which is now down on the day, the other three precious metals are back to unchanged.
Net gold volume has doubled to 24,500 contracts—and silver's net volume is up to 4,100 contracts, which isn't a lot. The dollar index is now down 46 basis points which, I suspect, is one of the reasons that JPMorgan et al are leaning on the precious metal prices at the moment.
How today will shape up as far as far as gold and silver are concerned is certainly an unknown, but it's obvious that “da boyz” are at battle stations at the moment. And based on that, nothing will surprise me when I power up my computer later this morning.
See you tomorrow.
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