What the market gave on Tuesday, JPMorgan et al. took back

The gold price rallied starting at the 6 p.m. open in New York on Tuesday evening—and hit its high tick of the day at 10 a.m. Hong Kong time on their Wednesday morning.  That was it, as the gold price chopped quietly lower until the London p.m. gold fix—and once that was put to bed, “da boyz” in New York had nobody in their way.  By the time the trading day was done, they had made sure that all of Tuesday's gains had vanished, almost to the penny—and the price was back well below its 50-day moving average once again.

The high and low ticks were reported by the CME Group as $1,203.90 and $1,179.50 in the February contract.

Gold closed yesterday in New York at $1,182.90 spot, down $17.10 from Tuesday's close.  Net volume was microscopic at 65,000 contracts.

Here's the five-minute tick chart courtesy of Brad Robertson—and the “click to enlarge” feature really helps.  Don't forget to add two hours for EST.

It was more or less the same chart pattern for silver—and the low tick came about five minutes before the Comex close.  From there it recovered some its losses on the day, but JPMorgan et al. took back all of Tuesday's gains, plus more, before the trading day was done yesterday.

The high and low were recorded as $16.31 and $15.545 in the March contract.

Silver was closed at $15.685 spot, down 58.5 cents on the day.  Net volume was 24,500 contracts.

The platinum price didn't do much for most of the Wednesday session—and its attempt to rally above its Tuesday close ran into a willing seller on several occasions during the Comex trading session.  Platinum was closed at $1,204 spot and down $6 from Tuesday.

Palladium did precisely nothing until the platinum price got axed at 1 p.m. EST—and the metal was closed down $7, instead of flat or up on the day.

The dollar index closed late on Tuesday afternoon at 89.94—and then rallied up to 90.05 by 3 p.m. Hong Kong time—and an hour before the London open.  From there it slid to its 89.89 low of the day shortly before 1 p.m. GMT in London—and then it was rally time, with most of the gains in by 11 a.m. EST, which happened to be the close of London trading.  From there it chopped sideways in a very tight range, closing at 90.27—up 33 basis points.

The gold stocks opened down at bit—and chopped sideways until about 2:15 p.m.  At that point they rallied into positive territory, before sliding back into negative territory just before the close.  The HUI finished down 0.37%—which is rather amazing considering the price action in the underlying metal.

The silver equities opened down, but by shortly after 10 a.m. had rallied back to unchanged.  From there they headed lower, hitting their low tick at exactly 11 a.m. EST.  From that point they rallied into positive territory virtually without a break, as Nick Laird's Intraday Silver Sentiment Index closed up a surprising 0.19%.

The CME Daily Delivery Report for Day 2 of the January delivery month showed that zero gold and four silver contracts were posted for delivery within the COMEX-approved depositories on Monday.  Nothing to see here.

The CME Preliminary Report for the Wednesday trading session showed that there were 353 gold contracts still open in the January delivery month, down 36 from Tuesday's report.  January open interest in silver is 104 contracts, down 15 contracts from Tuesday—less the 4 contracts posted for delivery on Monday that were mentioned in the previous paragraph.

There was another withdrawal from GLD yesterday.  This time it was 57,634 troy ounces.   And as of 10:17  p.m. EST yesterday evening, there were no reported changes in SLV.

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

For the month of December, the mint sold 18,000 troy ounces of gold eagles—4,500 one-ounce 24K gold buffaloes—and 2,459,000 silver eagles.  The silver/gold sales ratio for the month works out to a ridiculous 109 to 1.

For the 2014 year in total, the mint sold 524,000 troy ounces of gold eagles—177,500 one-ounce 24K gold buffaloes—44,006,000 silver eagles—and 16,900 one-ounce platinum eagles.

The silver/gold ratio for the whole year works out to just under 63 to 1.

Here are three charts that Nick sent our way yesterday evening about gold and silver sales at the U.S. Mint—and I never even had to ask for them.

The first is “U.S. Mint – Gold Eagle and Gold Buffalo Coin Sales“:

This one is “Silver Eagle Coin Sales“:

And lastly: “U.S. Mint Coin Sales – Gold vs. Silver in U.S. Dollars“:

There wasn't much activity at the Comex-approved depositories on Tuesday.  In gold, nothing was received—and 5 kilobars were shipped out of HSBC USA.  There only slightly more activity in silver, as 103,549 troy ounces were received—and 37,752 troy ounces were shipped out the door.

I have a decent number of stories for you today, despite my best efforts to keep them down to a bare minimum.

“Remember what we're looking at. Gold is a currency. It is still, by all evidence, a premier currency, that no fiat currency, including the dollar, can match.” – Alan Greenspan, October 2014

What the market gave on Tuesday, JPMorgan et al. took back on Wednesday—and they finished the year on a down note in all four precious metals, as they were all taken another step away from their critical 50- or 200-day moving averages.

But the equities turned in basically unchanged performances—and I must admit that my “spidey senses” are aroused when I see this sort of counterintuitive action.  I'm not sure if it's bottom fishing, or maybe the powers that be loading up on all the shares dumped yesterday, plus some more, in order to hit everything harder at a later date—like tomorrow, for instance.  That's wild-ass speculation on my part, but that's what happens in the dead of night when the effects of the blue pill start to wear off.

Here are the six-month charts for the four precious metals, plus natural gas and WTIC.

You'll note that natural gas made a new low for this move down—and WTIC hit a new interim low during the Wednesday session, but didn't close there.

I note that we survived the last month of Comex trading without it blowing up or melting down—or going out of business.  The “lunatic fringe” was apoplectic in the latter parts of the year about the imminent demise of the Comex due to delivery defaults and the like.

You just have to shake your head when you read stuff like this, as it's obvious that there's absolutely no barrier to writing anything on the Internet—and the worst part of it is that people gobble this stuff up like it's the gospel.  Of course, nothing like that would ever be allowed to occur by the powers that be.  It's not that it can't happen under extreme circumstances, but the Comex has very strict rules to prevent this from happening—and if it did, there's not a soul out there [including me] who would know about it in advance.  But some commentators think that their interpretation of the data is superior to everyone else's—but the fact of the matter is, they're just making it up as they go along, because they really don't have a clue.

It was for similar reasons that I dropped King World News from my column back in October, because some of the things that Eric's guests were saying were so far out to lunch that I wanted no part of it in this space—and readers were starting to complain.  For two years I posted a disclaimer under the KWN blogs, but after a while, enough was enough—as I had my own reputation to think of.

I have no forecast for next year as far as the precious metal market is concerned.  I know what should be happening—and we know why it's not happening.  Until JPMorgan et al. give up or lose control of the situation, nothing will change.  The wild up-and-down price action will continue—and all of it is the back-and-forth machinations of the “Big 8” commercial traders as they put the Managed Money traders through their paces in the Comex futures market.  That scenario has changed somewhat during the latter part of this year, but up until this point, there's been no sign of it in prices.

And as I put the finishing touches on today's effort, it would be remiss of me not to thank those who have made this column what it is today.

Casey Research sends this column of mine out to about 38,000 signed-up readers every day—five days a week—and that doesn't include those who read it off the website on a daily basis without being signed up to receive it by email.  In a niche market like the precious metals, these are astounding numbers—and I put CR's Alex Daley's feet to the fire about this when I saw him in San Antonio in September.  He says that the numbers are even better than this, but his explanation of page views, etc., was way beyond me—and it's only this part of his explanation that I could grasp even partially.

But not for one second do I think that I got to this position all by myself.  Yes, I write it, but without the contributions from so many readers, there's no question that this daily missive would be noticeably diminished without them.

Eight years ago when I started writing for Casey Research, I promised myself that I would not leave my readers behind, as most newsletters are nothing but mouthpieces for the egos behind them—and no one else's opinion mattered, nor did their contributions.  Long before I wrote a single word, I discovered from the various precious metal shows that I attended with my GATA hat on that the average attendee was totally disenfranchised from those who wrote newsletters—and then pontificated at these same conferences.  That included me.

So I give thanks to those whose contributions enriched this column during the last year—whether it was a chart, graph, quote, photo, cartoon, it didn't matter.  All the ones that I used made it better for everyone—and I also thank those who sent me something, even though I didn't use it.

Although I'm sure I'll forget a few—and I apologize in advance for that—I'd like to thank some our regular contributors:  Phil Barlett, Harold Jacobsen, Brad Robertson, reader M.A., Elliot Simon, Dan Lazicki, Dennis Mong, our man in Greece—Harry Grant, reader U.D., Manitoba reader U.M., South African reader B.V.—and at the very top of the heap every year is Roy Stephens.

And in a special category all by himself is silver analyst Ted Butler.  I'm privileged to be able to use this column to disseminate the unvarnished, true story behind the precious metal price management scheme.  He's been at this for almost three decades—and with his experience in commodities in general, and silver in particular, I consider his work to be definitive.  So should you.

Also in a category by herself is Juli Placek, the nice lady who extracts herself from a warm bed at 4:50 a.m. EST five days a week to ensure that my efforts are placed in the familiar form that you receive them in every day at the Casey Research website.  I can't even begin to tell you how many times she has bailed me out of problems of my own making—and that I'm not computer savvy enough to figure out on my own.  I think it's safe to say that we are now a team in every sense of the word—and from one team member to another, thank you, Juli!  And riding shotgun over both of us from a safe distance is Casey Research's own Dody Day—and I thank her for all she's done for the team this past year as well.

I'm done here.  Happy New Year once again—and I'll see you on Saturday, as I won't have a column tomorrow.

By the way, my Saturday column will be my last one until the morning of Friday, January 16—as I'm going on vacation for 10 days.  I'll be taking my laptop with me, but unless the world blows up or melts down while I'm gone, I won't be posting a thing.

Ed Steer

Cypress Development Corp. is a Canadian gold, silver and base metals exploration company developing projects in Red Lake, Ontario, Canada, and in Nevada, U.S.A.

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