It wasn’t much a day yesterday, but using the past as prologue, it seems that the price trend is now downwards in the short term.
Gold spiked up the moment that the gold market opened in New York at 6:00 p.m. on Sunday night…8:00 a.m. in Tokyo on their Monday morning…and that was the high of the day, as a not-for-profit sellers quickly capped the price.
From there, the gold price slid a bit…and was down about seventeen bucks from it Tokyo high by 1:50 p.m. in New York…which was about twenty minutes after the Comex close. At that point, the price became more ‘volatile’…and by 3:50 p.m., the gold price was down a bit over twenty bucks from its high of the day. From there it recovered a bit into the close.
Gold finished the Monday session at $1,762.50 spot…down an even $8.00. Volume was very decent at around 121,000 contracts.
It was pretty much the same price pattern in silver, but was far worse in percentage terms…as the sell-off in the electronic market that began at the same 1:50 p.m. time as gold, sent the silver price down over 50 cents in less than an hour.
Silver’s low was in the neighbourhood of $33.80 spot…but recovered back above the $34 spot price by the close of electronic trading at 5:15 p.m. in New York.
From its high to low tick on Monday, silver had an intraday price move of just about a buck. I’d normally have more accurate figures than that, but the numbers posted at Kitco simply aren’t believable.
Silver closed at $34.25 spot…down 43 cents. Volume was pretty heavy at 48,000 contracts.
The dollar index opened at 78.85…and chopped 10 basis points higher by the close of trading on Monday. Nothing to see here.
The gold stocks hit their low of the day shortly after 10:00 a.m. Eastern in New York. Then they began to move higher and spent the rest of the day trading either side of unchanged. The HUI closed up 0.13%…basically flat.
The silver stocks finished mixed, but the stocks that make up Nick Laird’s Silver Sentiment Index managed to eke out a small gain of 0.26%.
(Click on image to enlarge)
The CME Daily Delivery Report showed that only 3 gold and 15 silver contracts were posted for delivery within the Comex-approved depositories on Wednesday.
Ted Butler noted that September open interest in silver jumped by 178 contracts on Friday, so it’s obvious that someone appeared out of the blue and is standing for delivery on a reasonable amount of silver, in this case around 890,000 ounces. I’ll be watching the Daily Delivery Notices in the days ahead to see who the short/issuer and long/stopper is on that one.
There were no changes reported in GLD yesterday, but there was a big chunk of silver added to SLV…2,325,370 troy ounces to be precise.
There was a decent sales report from the U.S. Mint. They sold 1,500 ounces of gold eagles…1,000 one-ounce 24K gold buffaloes…and 700,000 silver eagles.
Over at the Comex-approved depositories on Friday, they did not receive any silver…but shipped 856,067 troy ounces out the door. That’s 171 Comex contracts worth of silver, which is very close to the 178 contracts that September open interest rose on Friday. One has to wonder whether these data points are related or not. The link to Friday’s activity is here.
With silver analyst Ted Butler‘s kind permission, I was allowed to extract one paragraph from his Saturday weekly review. It’s nothing that I haven’t said already in one form or another, it’s just that he’s so much better at it than I am…
“I would peg JPMorgan’s silver short position to be around 27,000 contracts as of the Tuesday cut-off, or the equivalent of 135 million oz. From the 14,000 contracts they held short at the beginning of July, JPMorgan has roughly doubled their manipulative silver short position. If my calculations are correct, this is a short concentrated short position without precedent, except by previous JPM benchmarks in silver. After removing spreads (in the Disaggregated COT report), JPMorgan’s share of the true net total COMEX silver open interest is now 28.8%. In any normal and non-manipulated major futures market, regulatory alarms should go off if any one participant held more than a 5% or 10% share of the market (remember the proven copper manipulation in which the Sumitomo trader was called Mr. 5%?). Even if my calculations for JPMorgan are off a bit (I don’t think they are), the fact that the 4 largest shorts hold more than a 46% share of entire net COMEX silver futures market indicates a dominance and control rarely, if ever seen in any other market before. It’s actually worse if some other big entities in the Big 4 are working collusively with JPMorgan, rather than JPM doing all the heavy silver shorting as I contend. That the regulators (the CFTC and the CME Group) and JPMorgan have been silent in the face of such specific allegations of concentration and manipulation is astounding, particularly as more come to learn the true facts.”
Nick Laird provided me with a juicy tidbit just before I hit the ‘send’ button on today’s column. He advised me that Julian Baer’s Precious Metals Funds out of Switzerland took in 85,500 ounces of gold, along with 665,000 ounces of silver during the last week. As of the end of trading on Monday, they held 3.54 million ounces of gold…16.53 million ounces of silver…plus some platinum and palladium as well.
I thank Australian reader for today’s Chart of the Day…
Here’s another chart. This one is courtesy of Washington state reader S.A…and I’m not sure where he stole it from.
I’ve tried to keep the stories down to a reasonable number but, as always, the final edit is up to you.
It wasn’t much a day yesterday, but using the past as prologue, it seems that the price trend is now downwards in the short term. I’d certainly like to believe otherwise…but with JPMorgan et al still appearing to be very much in the drivers seat at this point, a smack-down of some size in both metals certainly cannot be ruled out…a point that both Ted Butler and myself have been going on about for some weeks now.
I’d love to be wrong, but if I had to bet any kind of money on this, I’d bet it on JPMorgan one more time. Could ‘da boyz’ get over run here? Certainly. However, nobody really knows for sure, as none of us are a fly on the wall in Jamie Dimon’s office, or at the CME Group or the CFTC…but absolutely nothing would surprise me going forward, as I…along with every other gold and silver pundit…is making this up as we go along.
But, as I said in this space on Saturday, I’m really beyond caring, as they can’t keep this up forever…and every sell-off should be bought. It’s “print, or die” everywhere on Planet Earth now…and that will certainly impact the precious metals in a positive way over the long term. It’s the very short term that has my attention at the moment.
Today, at the close of Comex trading, is the cut-off for this Friday’s Commitment of Traders Report…and depending what happens between now and then, we should get a pretty good indication of how extreme the short position in both silver and gold have become since the last report, as the big run-up after last Thursday’s QE3 announcement by Bernanke & Co. will be included in those numbers.
Gold and silver prices didn’t do much in Far East trading yesterday. But volume was pretty heavy in gold…and also very decent in silver going into the 8:00 a.m. BST London open earlier this morning, so it appears that the high-frequency traders are active, just like they were yesterday…and the dollar index is chopping sideways.
Now that London has been open for a little over two hours, gold and silver are struggling back towards unchanged…and volumes, which had been pretty high before, are are even higher now. The dollar index still isn’t doing much of anything as I hit the ‘send’ button at 5:15 a.m. Eastern time.
That’s more than enough for one day…and I’ll see you here tomorrow.
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