If that was the case, it worked like a charm

After trading virtually flat for all of Far East, most of London trading—and early trading in New York, the gold price got hit at 11:00 a.m. EST on the dot just as London closed for the day.  The low tick came thirty minutes later—and then at precisely 2 p.m. EST, the gold price rocketed 12 bucks higher in just minutes, which was probably a result of the release of the Federal Reserve's January meeting—and crawled higher from there, closing virtually on its high tick of the day.

The low and high were recorded by the CME Group as $1,197.20 and $1,213.40 in the April contract.

Gold closed in New York yesterday afternoon at $1,213.30 spot, up $3.50 from Tuesday's close.  Considering the price volatility, net volume was pretty light at around 111,000 contracts.

Here's the 5-minute tick chart for gold courtesy of Brad Robertson—and you should note the volume spikes on the price moves throughout the trading session.  Considering the price volatility in New York, the associated volume can hardly be called robust.

Silver didn't do much in price and volume terms on Wednesday, either.  The Far East high tick, such as it was, came shortly after 2 p.m. Hong Kong time—and less than an hour before the London open.  from that point the silver price chopped quietly and unsteadily lower, with the low tick coming shortly before the 1:30 p.m. COMEX close.  Like gold, silver also had its little price spike at 2 p.m. in electronic trading on the Fed news, or lack thereof—and recovered all its losses on the day in the process.  From that point onwards, the price didn't do a lot.

The high and low were recorded as $16.575 and $16.23 in the March contract.

Silver finished the Tuesday session at $16.495 spot, up 2.5 cents on the day.  Gross volume was pretty high, but once the roll-overs were taken out, net volume dropped down to only 26,000 contracts.

The platinum charts was a mini version of the gold chart—and the palladium charts was a mini version of the platinum chart, sort of.  Platinum closed at $1,169 spot, down four dollars—and palladium finished the Wednesday session at $775 spot, down an even five bucks.  Here are the charts.

The dollar index closed late on Tuesday afternoon at 94.13—and from there came close to dipping back below the 94.00 mark late in Far East trading on their Wednesday morning.  Then, starting at 2 p.m. Hong Kong time, the index began to chop higher, hitting its 94.50 high tick minutes after 12 o'clock noon in New York.   It hung in there at that level until the Fed news at 2 p.m. EST—and then fell like a stone within minutes to within an eyelash of 94.00 once again.  It “recovered” a handful of basis points from there—and didn't do much for the remainder of the day.  The dollar index closed yesterday at 94.10—which was basically unchanged from Tuesday.

The gold stocks spent half of Wednesday morning fighting to stay in positive territory, but finally gave up the ghost shortly after 11 a.m. EST—and traded down a percent and change until 2 p.m. EST.  Then they blasted into positive territory immediately on the out-of-the-blue price spike in gold—and then crawled higher for the remainder of the New York trading session.  The HUI closed up 2.02 percent.

In most respects, the silver equities followed the path of their golden brethren, complete with the 2 p.m. EST price spike—and Nick Laird's Intraday Silver Sentiment Index closed up 1.77 percent.

The CME Daily Delivery Report showed that zero gold and 36 silver contracts were posted for delivery within the COMEX-approved depositories on Friday.  The only short/issuer was Jefferies—and they stopped 16 contracts as well.   Canada's Scotiabank stopped the other 20 contracts.

Even though February, like January, isn't a big delivery month in silver, there have been 420 silver contracts posted for delivery already this month.

The CME Preliminary Report for the Wednesday trading session showed that gold open interest dropped by the 49 gold contracts being delivered today—and February o.i. is now down to 552 contracts.  Silver's February open interest is still unchanged at 56 contracts, but 50 contracts of that amount can be subtracted as per the Friday deliveries posted in the previous paragraph.

There was a small 9,600 troy ounces of gold withdrawn from GLD yesterday—and I would suspect that this amount represented a fee payment of some kind.  But the big surprise was in SLV, as authorized participants deposited a whopping 3,971,459 troy ounces yesterday.  It's a safe bet that this was deposited to cover part of an existing short position in this ETF.

And because it was deposited on a Wednesday, it's a good bet that it won't be in tomorrow's SLV bar list report from Joshua Gibbons—and it certainly won't be in next week's short position report from the folks over at shortsqueeze.com.

The good folks over at Switzerland's Zürcher Kantonalbank updated their website with the changes in their gold and silver ETFs as of the close of business on Friday, February 13—and this is what they had to report.  Their gold ETF dropped, but only by 2,565 troy ounces.  However, their silver ETF had a very chunky withdrawal of 268,457 troy ounces.

There was a very decent sales report from the U.S. Mint yesterday.  They sold 5,000 troy ounces of gold eagles—3,000 one-ounce 24K gold buffaloes—and 625,000 silver eagles.

There wasn't a lot of gold movement at the COMEX-approved depositories on Tuesday, as only 8,407 troy ounces were reported received—and two kilobars were shipped out.

But it was another very decent day for silver movement, as 498,299 troy ounces were reported received—and 532,516 troy ounces were shipped out.  The link to that activity is here.

I don't have a lot of stories today—and that suits me, and probably you, just fine.

It would appear the influence of COMEX futures positioning is at play in silver and gold prices. Certainly, if the price action for this week, month, year—and years past—is not fully explained by changes in the COT market structure, then I am at a loss to explain it in different terms. I actually feel badly for anyone who thinks silver and gold prices are dependent on any other financial news or events other than COMEX trading. That’s not to sound cocky or say it will always be this way, because that’s not the case in the long run. But it happens to be the case right now—and has been for a very long time.

In simple terms, we went lower on Tuesday and Wednesday—and in the case of every previous significant sell-off in gold and silver—because the commercials (led by JPMorgan) set prices lower through means of HFT and other dirty tricks on the COMEX in order to induce technical fund selling so that the commercials could buy. If this is not the story 100% of the time, then it's the story 99% of the time. In any case, this is the manipulation that increasing numbers of observers are coming to grasp. The clincher is that it is confirmed in evolving COT data. Never has there been a significant decline in the price of silver or gold without significant commercial buying.

That brings us to the current “count.” I would be surprised if the COT report to be released on Friday and covering trading through the close of business on Tuesday, didn’t feature hefty declines in the headline number of the total commercial net short position. For COMEX gold, considering there were two significant down days in the reporting week, Tuesday when new price lows were set—and last Thursday, Feb 11 when the 50-day moving average was first penetrated to the downside, I would guess another 30,000 net contracts or so were taken off the total commercial net short position. In silver, the 50-day moving average wasn’t violated until Tuesday, but there could have been a reduction in the headline number of as many as 5,000 to 10,000 contracts.Silver analyst Ted Butler: 18 February 2014

It was another very quiet day in the precious metal markets, at least up until the U.S. equity markets opened.  Then shortly after that, the price began to head lower—and by the time the HFT boyz were done after the 11 a.m. EST London close, the gold price was down twelve bucks.

That was all gained back on the release of the January minutes from the Federal Reserve at 2 p.m. EST—and you'll excuse me for thinking that the morning sell-off in the precious metals was done to counteract the expected jump in their respective prices when the minutes were released.  If that was the case, it worked like a charm.

Here are the 6-month charts for all four precious metals—and nothing should be read into yesterday's price shenanigans in New York on a longer-term basis, despite the positive dojis on their respective charts.

And as I type this paragraph, the London open is fifteen minutes away.  Not much is going on in Far East trading with the Chinese New Year now in full swing—and it's one of the reasons why trading volume has been so light during these hours for the last day or so.  The smallish gains in all four precious metals that accrued during early morning trading in the Far East on their Thursday are all staring to slip away, but are still up a hair from their closes in New York yesterday afternoon—and volume is a little heavier than it was this time yesterday, probably because of those early rallies—such as they were.  The dollar index is down 8 basis points—and trading on both side of the 94.00 mark at the moment.

We seem to be in some sort of holding pattern at the moment. Although I'm expecting the engineered price declines to continue in both gold and silver in the days ahead, the fact is that these markets could move strongly to the upside as well.

But unless it's the big “reset,” any rallies or sell-offs will be paper trading on the COMEX at the hands of JPMorgan et al—and nothing to do with supply and demand, a fact that was more than adequately covered in Ted's quote above.

And as I hit the 'send' button on today's column at 5:15 a.m. EST, I note that there's a bit of positive price activity in three of the four precious metals [palladium is down a buck], but nothing much should be read into this, either.  Net gold volume is closing in on 24,000 contracts—and silver's net volume is a hair over 6,500 contracts.  The dollar index is back above the 94.00 mark, but only by 4 basis points—and it's currently down 6 basis points from its close in New York yesterday.  It will be interesting to see if this is the start of another “gentle hands” rescue as the Thursday trading day unfolds.

That's all I have for today—and I'll see you here tomorrow.

Ed Steer

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I'm going to take a break from Arizona for a day and feature three photos that gold market analyst Lawrie Williams sent my way from his trip to Cape Town, South Africa to attend the recently-concluded Cape Town Mining Indaba.  I thought they were worth sharing—and I hope you do as well.

These photos were taken when he was on a boat excursion—and show the city from a perspective that few ever get to see.  The first photo shows Signal Hill and Lion's Head in the foreground—and Table Mountain in the background, with clouds called the “tablecloth” spilling over the edge.

The second photo is a little further around the coast and show the “tablecloth” clouds on Table Mountain more clearly.

And lastly, further around the coast still, comes a mountain formation the locals call the “Twelve Apostles”.