I would classify the gold and silver price action yesterday as a bear raid by JPMorgan et al

Gold’s rally in early Far East trading lasted until 10:00 a.m. Tokyo time on their Tuesday…at the exact moment that the dollar index began its big rally.

From that point, the gold price traded sideways until around 2:30 p.m. in Hong Kong…about thirty minutes before the London open…and then the serious sell-off began.  The low tick of the day [$1,420.30 spot] came at 9:00 a.m. in New York, right on the button.  The subsequent rally lasted until the London p.m. gold fix, or just moments after…and that, as they say, was that.

Gold closed at $1,425.80 spot…down an even five bucks on the day.  Net volume was decent at around 141,000 contracts.

It was mostly the same story in silver, although it appeared that the silver price got a bit of a shove starting just before 11:00 a.m. BST in London, as it didn’t appear to want to go down on its own.  Then it got smacked for another 40 cents the moment that Comex trading began in New York…and the low price tick [$23.05 spot] came a few minutes after 8:30 a.m. EDT.  The subsequent rally appeared to run into the same set of not-for-profit sellers as gold did at, or shortly after, the London p.m. gold fix around 10:00 a.m. in New York.  From there it got sold down until about 12:30 p.m. EDT…and traded sideways into the 5:15 p.m. electronic close.

Silver finished the Tuesday trading day at $23.41 spot…down 24 cents from Monday’s close.  Gross volume, not surprisingly, was fairly decent…around 44,500 contracts.

It was a slightly different story in both platinum and palladium…and here are the charts.

For the Tuesday trading session, gold finished down 0.35%…silver closed down 1.01%…platinum closed up 1.42%…and palladium was up 1.68%.

The dollar index, which closed on Monday at 83.22…began to head south the moment that trading began in the Far East on their Tuesday morning…but someone was there to catch a falling knife as the index fell below 83.00 at 10:00 a.m. in Tokyo…and until 10:30 a.m. in London it traded pretty close to the 83.00 mark.

Then away it went to the upside…and was at 83.36 about an hour later.  From there it chopped sideways until 11:00 a.m. in New York.  The rally began anew at that point…and topped out at 83.67 around 3:45 p.m. Eastern time, before selling off a hair into the close.  The dollar index closed at 83.605…up about 38 basis points…with the vast majority of that gain coming between 11:00 a.m. and the 3:45 p.m. EDT high tick.

It would take a very vivid imagination to fit the price action of any of the four precious metals into the price action of the dollar index after the low tick was in, in early Far East trading yesterday.  As a matter of fact, it doesn’t fit at all…and in my opinion was just another bear raid on the precious metals hidden behind the skirts of a manufactured rally in the dollar index.

Here’s the 3-day chart so you can see the entire Tuesday trading day starting at 6:00 p.m. EDT in New York on their Monday night.

The gold stocks rallied until “da boyz” showed up at, or just after, the London p.m gold fix at 10:00 a.m. in New York.  The stocks got sold down from there, reaching their nadir at 2:15 p.m. EDT…and then rallied a hair into the close.  The HUI finished down another 1.18%.

The silver stocks finished mostly down on the day, but the big cap silver stocks that make up Nick Laird’s Intraday Silver Sentiment Index closed basically flat…down a smallish 0.43%.

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The CME’s Daily Delivery Report showed that 7 gold and 21 silver contracts were posted for delivery within the Comex-approved depositories on Thursday.

There were no reported changes in either GLD or SLV for the second day in a row.

Over at Switzerland’s Zürcher Kantonalbank for the week ending on Monday, May 13th…they reported that 112,879 troy ounces of gold were withdrawn from their gold ETF.  And, for the fourth week in a row, they reported an increase in their silver ETF holdings.  This time it was 209,816 troy ounces.

The U.S. Mint finally came out with a sales report…and I can tell from the numbers, that they have not been reporting their sales in anything close to a ‘timely manner’…as there are some big changes.  They sold 16,000 ounces of gold eagles…5,000 one-ounce 24K gold buffaloes…and 833,500 silver eagles.

Over at the Comex-approved depositories on Monday, they reported receiving 214,163 troy ounces of silver…and shipped 101,801 troy ounces out the door.  The link to that activity is here.

In gold, they didn’t report receiving any on Monday…and shipped out 54,808 troy ounces…all of it from the JPMorgan Chase depository.  The link to that activity is here.

Here’s your daily “cute quota”…

Despite my best efforts, I have almost the same number of stories today that I had in my Tuesday missive, so I hope you can find the time to read all the articles that interest you.

A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed. – 2nd Amendment…Constitution of the United States of America…December 17, 1791

As I said further up in this column, I would classify the gold and silver price action yesterday as a bear raid by JPMorgan et al…hidden, in part, by the rally in the dollar index…such as it was.

The only good thing about yesterday’s price action was the fact that it should appear in Friday’s Commitment of Traders Report.  Of course, when it suits them, “da boyz” have been tardy about reporting Comex trading volume in the past, so it remains to be seen if they pull that stunt again…and I’d put nothing past these guys.

Just eye-balling the price action over the five reporting days that will show up in Friday’s COT report, I would guess that we’ll see improvements in the Commercial net short positions in both gold and silver…but nothing in platinum, as it has been trading flat…and palladium is on a tear…up about fifty bucks during the reporting period.

Just looking at the last five trading days on the 6-month charts, it should be obvious that the price pressure has only appeared in silver and gold…and not platinum and palladium.  Here are all four charts…complete with 20 and 50-day moving averages.

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All four precious metals came under some price pressure during the Far East trading session on their Wednesday…and the high-frequency traders went back to work in gold and silver about the same times as they did on Tuesday…shortly before the London open.  As I write this paragraph, the London market has been open about thirty minutes…and gold is down about eleven dollars…and silver, JPM’s real problem child, is down a bit over 40 cents.  Trading volumes are quite high…but as I said, it’s all HFT.  This is not true supply and demand setting prices at this point…and to top it off, there’s virtually no liquidity, as little real-world trading is being done.  It’s the machines with their algos.

And as I hit the ‘send’ button on today’s column at 5:15 p.m. EDT, both gold and silver are still under considerable selling pressure.  Platinum and palladium are lower as well, but just barely.  Gold is down about fifteen bucks…and silver is down 45 cents…about 2 percent.  Gold volume is north of 48,000 contracts…and silver’s volume is over 14,000 contracts.  The dollar index, which spiked up about 25 basis points in afternoon trading in Hong Kong, is now up only 16 basis points as of 10:15 a.m. BST in London.

This ‘bear market’ we’re going through is JPMorgan et al‘s last attempts to cover as many short positions as they can before prices head higher…much higher.  But as Ted Butler mentioned in yesterday’s column, JPMorgan Chase was short 18,000 Comex silver contracts before the mid-April price smash…and was still short about that amount as of last Friday’s COT Report, so one has to wonder what they’re up to at the moment.  If they couldn’t cover any or all of it back then, it’s doubtful they can pull it off now.  We’ll see.

Needless to say, nothing will surprise me as far as price action is concerned once we get past the noon silver fix in London, which is 7:00 a.m. EDT…and after that, the 8:20 a.m. Comex open awaits.

Marin Katusa, CR‘s chief energy investment strategist, interviews the world’s top energy experts including former U.S. Energy Secretary – Spencer Abraham, Canada’s former Minister of Natural Resources – Herb Dhaliwal, and the Chairmen Emeritus of the U.K. Atomic Energy Authority – Lady Barbara Thomas Judge, and co-founder and CEO of Uranium Energy Corp – Amir Adnani about how important nuclear power will be for our global energy future.

Marin and Chairman of Sprott US Holdings, Rick Rule believe that due to increasing costs to bring uranium to market, increased demand, and the end of the Megatons to Megawatts agreement with Russia at the end of the year, uranium prices have nowhere to go but up.  And early investors can position themselves now for very large gains in the near future.

This free video will air on Tuesday, May 21 at 2:00 p.m. Eastern Daylight Time.  It will be available for viewing after the initial stream for those who have schedule conflicts.

Following the webinar, all attendees will get a free copy of the new Global Resource Intelligence report on Uranium.  It’s a $29 value, roughly 39 pages, and will be e-mailed on May 21st.

See you tomorrow.

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