It’s the same old, same old—at least for the moment.
Gold didn't do much anywhere on Planet Earth yesterday, but it was obvious that the HFT boyz were out and about—with the first occurrence shortly after 1 p.m. GMT in London—and the second in the thinly-traded New York Access Market shortly after 2 p.m. EST. The latter sell-off took the gold price to its low tick of the day.
The high and low, such as they were, were reported by the CME Group as $1,231.80 and $1,217.70 in the February contract.
The gold price closed at $1,225.90 spot, which was down $5.90 from Tuesday's close. Volume, net of roll-overs out of the February contract, was only about 116,000 contracts.
What was interesting in yesterday's volume figures were the big futures positions placed way out in 2015 and 2016—and the link to yesterday's CME's settlements page is here. Note not only the contracts placed yesterday, but also what the prior day's open interest was in those particular months [and others] that far down the road. These are big out-of-the-money bets by somebody with very deep pockets that may be armed with future price information that is unknown to us mere mortals.
Not surprisingly, it was silver that was under the most price pressure—and that was the case right from the New York open on Tuesday evening. The rally after the noon London silver fix got dealt with in the usual manner—and at the same time as “da boyz” took down the gold price for the first time, which was just minutes after 1 p.m. GMT—and about 15 minutes before the Comex open. That was pretty much it for silver for the remainder of the day.
The high and low price prints were reported as $19.865 and $19.31 in the March contract.
Silver closed in New York at $19.52 spot on Wednesday, which was down 32.5 cents from Tuesday's close. Volume was a very healthy 48,000 contracts.
There are some decent sized out-of-the-money bets for 2015 and 2016 in silver as well. Here's the link.
On Wednesday, platinum got sold down a bit into early London trading—and then recovered in price as the trading day unfolded. Palladium didn't do much. Here are the charts.
The dollar index closed in New York on Tuesday afternoon at 80.87. Once it opened for trading in the Far East on their Thursday, the index finally broke through the 81.00 mark, but in rather unconvincing fashion. However it did manage to close above that mark at 81.08—which was up 21 basis points from Tuesday's close.
Not surprisingly, the gold stocks gapped down about a percent and change at the open—and barely moved for the rest of the day, as the HUI finished down 1.59%.
The silver stocks finished down as well, but not as bad as the gold equities. Nick Laird's Intraday Silver 7 Index closed down 0.92%.
The CME Daily Delivery Report for Wednesday showed that zero gold and 14 silver contracts were posted for delivery on Friday within the Comex-approved depositories. JPM issued 11 contracts—and Canada's Bank of Nova Scotia stopped all 14 contracts. The link to that activity is here.
There was another reported withdrawal from GLD yesterday. This time it was 48,216 troy ounces. And as of 9:45 p.m. EST, there were no reported changes in SLV.
Once again there is nothing to report from the U.S. Mint as far as sales are concerned. But the story posted at this link regarding 2014 U.S. silver eagles sales is worth your while.
Over at the Comex-approved depositories on Tuesday, there was some decent gold movement for a change. Only 3 kilobars were reported received by Brink's, Inc., but 53,086 troy ounces were reported withdrawn—and 52,539 troy ounces of that came out of JPMorgan's warehouse. The link to that activity is here.
In silver, there was 601,047 troy ounces received by Brink's, Inc.—and nothing was reported shipped out. The link to that action is here.
I have the usual number of stories for a mid-week column—and I hope you find some on the list that strike your fancy.
Every ambitious would-be empire clarions it abroad that she is conquering the world to bring it peace, security and freedom, and is sacrificing her sons only for the most noble and humanitarian purposes. That is a lie, and it is an ancient lie, yet generations still rise and believe it! … If America ever does seek Empire, and most nations do, then planned reforms in our domestic life will be abandoned, States Rights will be abolished — in order to impose a centralized government upon us for the purpose of internal repudiation of freedom, and adventures abroad. The American Dream will then die — on battlefields all over the world — and a nation conceived in liberty will destroy liberty for Americans and impose tyranny on subject nations. – George S. Boutwell
Another day—and another engineered price decline—with this one starting a little earlier than the one on Monday. The results were the same—as more technical funds and small traders went short or sold long positions, with JPMorgan et al gobbling up all the long positions offered. It's the same old, same old—at least for the moment.
Here's what silver analyst Ted Butler had to say about the current price action in his mid-week column to his paying subscribers yesterday—and he says it so much better than I ever could:
A few words on the rotten price action this week. It appears to me that we’re enduring a typical COMEX rig job to the downside designed to induce those technical funds who bought contracts in Monday’s COT report to sell once again. That can only be achieved on sharp sell-offs. I’d lay the blame squarely on the crooks at JPMorgan because the bank did sell both gold and silver in the latest COT. More seem to be noticing the blatancy of the deliberate sell-offs, but the real question is why more don’t see the manipulation, particularly after it’s explained to them.
I think with today’s price take-down, a sufficient number of technical fund contracts were sold to bring those funds which bought in the latest COT, back onto the sell side. Of course that’s only a guess on my part. What’s not a guess is just how crooked are JPMorgan and the CME Group, owner of the COMEX. While we have retreated from penetrating the key moving averages to the upside, that just delays the process—and what JPMorgan does when the moving averages in gold and silver are penetrated, remains the key issue. It certainly doesn’t feel that way today, but we are still structured for an upside surprise.
There wasn't a creature stirring in the precious metal markets in the Far East on their Thursday. Volumes were fumes and vapours—and down more than 50% from where they were yesterday at the London open. Virtually all of the volume was in the current front months for both metals, so my guess is that most of the volume that did exist, was of the HFT variety. The dollar index, which traded slightly above the 81 mark yesterday, is now a hair below that.
And as I fire this off to Stowe, Vermont at 5:15 a.m. EST, there still isn't a thing going on in any of the precious metals. Volumes are still very light—and the dollar index isn't doing much either.
I haven't the foggiest idea as to what today's trading action will be like once we get past the London silver fix at noon GMT—and the Comex open—however it's easy to use the price patterns from the first three trading days of the week as a template for what might happen today. We'll find out in the fullness of time—and not too much time, either.
See you tomorrow—and if you live west of the International Date Line, I hope you enjoy your weekend.
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