I’m not sure what to make of it

The gold price had a positive bias to it all Wednesday, but the smallish rally that began a the Comex open wasn't allowed to get very far—and got sold down a bit as the New York trading day progressed.

Gold traded within about a ten dollar price range—and the low and high ticks worth looking up.

The gold price closed in New York on Wednesday afternoon at $1,299.80 spot, up $6.20 from Tuesday's close.  Net volume was reasonably light at only 92,000 contracts.

Silver chopped around within a dime of unchanged until noon in London—and then rolled over to hit its low of the day, which came at the Comex open in New York.  The subsequent rally didn't get far, or wasn't allowed to get far—and the price chopped sideways from about 9:40 a.m. until the 5:15 p.m. electronic close.

The low and high ticks were posted as $20.63 and $20.88 in the September contract.

Silver finished the day at $20.79 spot, up 7.5 cents from its Tuesday close.  Volume, net of July and August, was down substantially from Monday and Tuesday, but still very decent at 36,500 contracts.

Platinum didn't do much, or wasn't allowed to do too much—and the smallish rally that began around 9:30 a.m. EDT got capped shortly after 11 a.m.—and got sold down from there, as platinum was closed unchanged.

Palladium traded pretty flat until shortly after 10 a.m. EDT—then it rallied a bit, before trading flat from around 1 p.m. onward.  Palladium finished the Wednesday trading session up eight dollars.

The dollar index closed late on Tuesday afternoon at 80.38—and proceeded to rally to its 80.56 high, which occurred around 8:30 a.m. in New York on Wednesday morning.  After that it didn't do much—and the index closed at 80.53—which was up 15 basis points on the day.

The gold stocks gapped up a bit over a percent at the open—and hit their highs around 12:45 p.m. EDT—and then sold off a bit as the Wednesday trading session wore on.  The HUI finished up 1.75%.

The silver equities traded in a similar pattern—and Nick Laird's Intraday Silver Sentiment Index closed up 1.58%.

The CME Daily Delivery Report showed that 2 gold and 202 silver contracts were posted for delivery within the Comex-approved depositories on Friday.  In silver, the biggest short/issuer was Barclays with 180 contracts, followed distantly by ADM with 21 contracts.  The long/stoppers included Canada's Scotia bank with 96—JPMorgan in its client account with 59—and Jefferies with 32 contracts. The link to yesterday's Issuers and Stoppers Report is here.

Not surprisingly, there was a withdrawal from GLD yesterday, as an authorized participant took out 86,613 troy ounces.  And as of 9:30 p.m. yesterday evening, there were no reported changes in SLV.

Over at Switzerland's Zürcher Kantonalbank for the week ending July 11, they reported that their gold ETF added 16,016 troy ounces—and their silver ETF declined by 39,417 troy ounces.

There was no sales report from the U.S. Mint yesterday.

There wasn't much activity in gold over at the Comex-approved depositories on Tuesday, as only 4,000 troy ounces were reported received—and 321.500 troy ounces [10 kilobars] were shipped out.  The link to that activity is here.

It was another big day in silver, as 1,180,973 troy ounces were reported received, but only 131,699 ounces were shipped out the door.  The big receipts were at Brink's, Inc. and CNT.  The link to that action is here.

I have a very decent number of stories again today and there should be one or two that interest you.

On the (less than) $3 silver rally, the commercials sold more than 48,000 net contracts (240 million oz), with the raptors accounting for more than 40,000 contracts of that. Almost unbelievably, the technical funds bought more than 51,500 net silver contracts or the equivalent of 257.5 million oz. These totals are truly staggering. 

While the physical movements of real metal reported in the COMEX warehouses and in SLV were significant and indicative of physical tightness, the equivalent amount of paper silver transacted on the COMEX so dwarf movements of actual metal as to prove beyond question that paper trading on the COMEX sets the price of silver (and gold). In this regard, it makes perfect sense that the crooked CME would take over the London Silver Fix (as reported), as I can’t think of a single entity more experienced or proficient in artificially setting silver prices. – Silver analyst Ted Butler: 12 July 2014

Well, the gold price bounced off its 50-day moving average on Tuesday—and closed below the $1,300 spot mark, but off its low tick.  Yesterday the gold price didn't quite make it back to its 50-day moving average on the downside—and closed right at $1,300 spot, give or take a dime.  Here are the 6-month charts.

I'm not sure what to make of it, but I still can't shake the feeling that JPMorgan et al aren't done to the downside quite yet.  And as I said in my Tuesday column—“There's always a chance we could be done to the downside already.  But if I had to bet ten bucks, that's not how I'd bet it, at least not using past history as a guide.

And as I write this paragraph, the London open is about 35 minutes away.  All four metals are up from their Tuesday close in New York.  Gold is up five bucks or so, but platinum and palladium are stealing the show at the moment.  I'm happy to see that volumes in both gold and silver aren't that heavy considering the positive price action—and one can only hope that it continues this way—rallies on very little volume.  The dollar index is basically unchanged from its close in New York yesterday.

Here's a chart that Nick Laird sent our way just after midnight MDT this morning—and it shows the slow turn in the accumulation of physical gold in all the world's visible depositories.

And as I send today's effort off to Stowe, Vermont, I note that all four precious metals are off their earlier highs by a bit—and silver is the only metal that's down on the day.  Volumes are still very much on the lighter side—and the dollar index is down a small handful of basis points.

I haven't the foggiest notion how the rest of the Thursday trading session will turn out, but whatever price action there is, either up or down, will undoubtedly be greatly influenced by JPMorgan et al.

Enjoy what's left of your day—and I'll see here tomorrow.

Sponsor Advertisement

Freegold Ventures Limited is a North American gold exploration company with three gold projects in Alaska. Current projects include Golden Summit, Vinasale and Rob. Both Vinasale and Golden Summit host NI 43-101 Compliant Resource Calculations.

An updated NI 43-101 resource was calculated on Golden Summit in October 2012 and using 0.3 g/t cutoff  the current resource is 73,580,000 tonnes grading 0.67 g/t Au for total of 1,576,000 contained ounces in the indicated category, and 223,300,000 tonnes grading 0.62 g/t Au for a total of 4,437,000 contained ounces in the inferred category. In addition to the Golden Summit Project the Vinasale also hosts a NI 43-101 resource calculation which was updated in March 2013. Indicated resources are 3.41 million tonnes averaging 1.48 g/t Au for 162,000 ounces, and Inferred resources are 53.25 million tonnes averaging 1.05 g/t Au for 1,799,000 ounces of gold utilizing a cutoff value of 0.5 grams/tonne (g/t) as a possible open pit cutoff. Please send us an email for more information, [email protected]


Here's a pair of mating damselflies that I took about a month ago.

This is a photo that Nick Laird took the other day.  It's a Rock-wallaby.  There's lot of interesting things to photograph in Australia—and I wish I was there with camera gear in hand.  Nick and I would have more than a few beers.