The not-for-profit sellers were at battle stations until well after the London p.m. gold fix

The gold price got sold off a few dollars in early Far East trading, but the price was back to unchanged by the London open.  Then at 9:45 a.m. GMT the gold price rallied, only to get capped by 10 a.m. GMT by a wall of HFT selling.

The gold price began rallying anew just moments before the Comex open, but got capped at the London p.m. gold fix—and then chopped sideways into the 5:15 p.m. EST close of electronic trading in New York.

The low and high ticks were reported as $1,230.80 and $1,267.00 in the February contract.

Gold closed in New York yesterday at $1,264.60 spot, up $27.80 from Wednesday's close.  Net volume was pretty chunky at 159,000 contracts.

Silver hit its HFT-induced low tick at 10 a.m. Hong Kong time on their Thursday—and then rallied quietly up until 9:45 a.m. in London.  Then, like gold, away went the price to the upside, only to get capped 15 minutes later on huge volume.  The rally at the noon London silver fix ended the same way—and from there the silver price got sold down a bit into the Comex open.

The rally from that point also ended at the London p.m. fix—and from there the not-for-profit sellers hammered the price back to the $20 spot mark shortly after that.  Then even the tiniest rally got capped after that—and silver was forced to trade sideways for the remainder of the New York session.

The CME Group recorded the low and high ticks at $19.645 and $20.31 in the March contract.

Silver closed nowhere near its high of the day at $20.015 spot, up 22 cents on the day.  Volume, net of January and February, was very heavy at 55,500 contracts.

The platinum price action was similar to gold and silver's—and the rallies, along with the price cappings, obviously came at the same times.  Palladium didn't do much—and both metals closed down a couple of bucks on the day.  Here are the charts.

The dollar index closed on Wednesday in New York at 81.19—and then chopped sideways until about 3:20 p.m. Hong Kong time.  Then the roof caved in.  By the time the low tick was in at 4 p.m. in New York on Thursday, the index had fallen all the way down to 80.42.  From there it recovered a few basis points into the close, finishing the Thursday session at 80.48—which was down 71 basis points from the prior day.

Not surprisingly, the gold stocks gapped up at the open—and hit their highs at the London p.m. gold fix about 10:10 a.m. EST.  From there they sold down a percent, before trading almost ruler flat into the close.  The HUI finished up only 2.70%—and didn't even gain back all its loses from Wednesday when the gold price lost less than four bucks.

The silver equities were up 4% by the London p.m. gold fix, but most of those gains melted away once JPMorgan et al took silver out behind the woodshed after that.  Nick Laird's Intraday Silver Sentiment Index closed up only 1.33%.

The CME Daily Delivery Report showed that 51 gold and 11 silver contracts were posted for delivery on Monday within the Comex-approved depositories.  Jefferies was the short issuer on 50 gold contracts and 10 of the silver contracts—and Canada's Bank of Nova Scotia was the long/stopper on all the contracts that Jefferies issued.  The link to yesterday's Issuers and Stoppers Report is here.

Another day—and another withdrawal from GLD.  This time an authorized participant took out a chunky 173,552 troy ounces.  And as of 9:39 p.m. EST yesterday evening, there were no reported changes in SLV.

While on the subject of SLV—Joshua Gibbons, the “Guru of the SLV Bar List” updated his website with the data from the current reporting week for SLV—and here is what he had to say: “Analysis of the 22 January 2014 bar list, and comparison to the previous week's list — 4,241,905.5 oz were added (all to Brinks London), and no bars were removed or had a serial number change.”

“The bars added were from: Solar Applied Materials (1.6M oz), Aurubis AG (0.9M oz), Krasnoyarsk (0.4M oz), KCM SA (0.3M oz) and 8 others. As of the time that the bar list was produced, it was overallocated 746.5oz. All daily changes are reflected on the bar list”  The link to Joshua's website is here.

There was a tiny sales report from the U.S. Mint yesterday.  They sold 34,500 silver eagles—and that was it.

Once again there was no reported in/out movement in gold at the Comex-approved depositories on Wednesday.

There was some activity in silver, as 25,001 troy ounces were reported received—and 176,513 troy ounces were reported shipped out.  The link to that activity is here.

Here's a chart that West Virginia reader Elliot Simon sent our way yesterday.  It shows the decline in mortgage originations at three of the big U.S. banks—and the bars tell all.

Here's the pertinent part of a Zero Hedge story from yesterday that reader M.A. sent our way.  The headline reads “Stocks Spanked; Gold Glistens; Currencies Crushed; And Bond Bears Battered“.

Quite a day…

  • All-time record lows in many Emerging Market Currencies (TRY, ARS, VENZ (unof.) most)
  • Nikkei 225 -3.75% – biggest drop in 7 months
  • Emerging Market Stocks -3% – (4 month lows)
  • USD Index -0.7% – biggest drop in 3 months (2014 lows)
  • USDJPY -1.3% – biggest drop in 5 months
  • AUDJPY -2.35% – biggest drop in 7 months (4 month lows)
  • Dow -1.3% – biggest drop in 5 months (5-week lows)
  • 30Y Treasury Yield -9bps – near biggest drop since April 2013 (2-month lows)
  • Gold +2.3% – biggest gain in 3 months (2 month highs)
  • VIX +1.8vols – biggest jump in 3 months (1 month highs)
  • IG Credit +2.5bps – biggest jump in 5 months (1 month wides)
  • HY Credit -$0.5 – biggest drop in 4 months (1 month lows)

It seems that without the safety net of Fed flows, the reality that bad news might just be bad news and event risk is a real risk just started to hit home. The deer is back!

And lastly, here's a photo that First Majestic Silver's Todd Anthony sent me.  He took in Kyle Bass's office in Dallas yesterday.  They say a photo is worth a thousand words—well this one's worth more than that, as it shows where Kyle's head is truly at.  No wonder he owns gold.  Thanks for sharing this photo with us, Todd.

I have the usual number of stories for a week-day column, so I hope you can find the time to spend on the ones that interest you.

Even though JPMorgan was never able to get its net short position in Comex silver futures below 10 to 12,000 contracts over the past six years because of a limit to technical fund selling and raptor buying competition, it looks to me that the bank has been able to accumulate physical silver because there are different participants in physicals than futures. What this also highlights is the madness and illegality of having the paper price on the Comex setting the price in the physical market. If JPMorgan hadn’t been capable of rigging silver prices lower in 2013, it would never have been able to buy back 100 million ounces of short paper contracts and buy many tens of millions of physical silver as well.Silver analyst Ted Butler: 22 January 2014

Well, it should be obvious to all that if JPMorgan et al hadn't put in an appearance at several key moments yesterday, the precious metal prices would have closed significantly higher than they did.  Volumes were massive—and although it's a pretty good bet that a decent amount of short covering was involved, the not-for-profit sellers were at battle stations until well after the London p.m. gold fix.  Their calling cards were everywhere on the Kitco precious metal charts.

Gold had a decent rally, but silver got closed back below its 50-day moving average, after a huge breakout going into the London p.m. gold fix—and almost back below the $20 spot price mark, as a seller of last resort sold massive quantities of paper silver in the Comex futures market in order to drive the price back to that level.

If we're going to have a  short covering rally of any consequence at this point, or any time in the near future, it will be over the collective dead bodies of JPMorgan et al—as it appears they are prepared to take on all comers.

Based on yesterday's price action alone, I'd guess that JPMorgan's long-side corner in gold has declined significantly, as they certainly sold whatever part of their long position to stop the budding gold rally in its tracks.  I'd also guess that their short side-corner in silver has also grown as well.  However, this won't be known until next Friday's Commitment of Traders Report on January 31.

Talking about COT Reports, we get the new one later today—and after last week's big surprise, neither Ted nor I wish to hazard a guess as to what today's numbers will look like.  But, whatever they are, the changes shouldn't be too big—and I'll have all the details in tomorrow's column.

Also, both the HUI and the Silver Sentiment Index experienced net loses over the last two trading days, so yesterday's big rally didn't help the shares all.  Whether this was by chance, or by design, is irrelevant, as I'm not exactly dancing in the streets about this turn of events.

In Far East trading action on their Friday, gold got sold down about five bucks in the early going—and is now trading sideways with 25 minutes left to go before London opens.  Silver has been trading in a very tight range either side of the $20 spot price mark—and platinum and palladium prices haven't been doing much, either.  Volume in gold, net of roll-overs, is very light for this time of day—and silver volume is extremely quiet.  The dollar index is flat.

And as I fire today's effort off to Stowe, Vermont at 5:10 a.m. EST—nothing much is happening now that London has been trading for a bit more than two hours.  Gold and silver prices are basically unchanged from where they were back then, but both platinum and palladium are down a bit more since the London open.  Net volume in gold is pretty light—and silver's volume is very light.  The dollar index is still dead.  It's like Thursday never happened.

Since today is Friday, nothing will surprise me when I power up my computer later this morning.

Enjoy your weekend, or what's left of it—and I'll see you here on Saturday.

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First Majestic is a mining company focused on silver production in México and is aggressively pursuing the development of its existing mineral property assets. The Company presently owns and operates five producing silver mines; the La Parrilla Silver Mine, the San Martin Silver Mine, the La Encantada Silver Mine, the La Guitarra Silver Mine, and the Del Toro Silver Mine. Production from these five mines is anticipated to be between 12.70 to 13.35 million ounces of pure silver or 14.85 to 15.60 million ounces of silver equivalents in 2014. Please visit our website for more information.