Wednesday, October 1: Today in Gold and Silver


NEW YORK ( TheStreet) -- The gold price didn't do a whole heck of a lot until minutes before 10:30 a.m. BST in London on their Tuesday morning---the London a.m. gold fix---and as the last chart in yesterday's edition of The Wrap indicated, the HFT boyz showed up with a vengeance once the 'fix' was in.  They set a new low for this move down in the process---and that came at the noon London silver fix---and the subsequent rally to a few dollars above unchanged got dealt with in the usual manner at the London p.m. gold fix.  By 12:30 p.m. EDT, the gold price was back down near its low of the day---and wasn't allowed to do much after that.

The low and high were reported by the crooks over at the CME Group as $1,204.30 and $1,220.70 in the December contract.

Gold closed in New York yesterday afternoon at $1,208.70 spot, down $6.30 on the day.  Not surprisingly, net volume was way up there at 174,000 contracts.

It was more or less the same chart pattern in silver.  The high of the day, such as it was, came about 11:30 a.m. Hong Kong time---and after that, the silver chart looked pretty much the same as the gold chart for the remainder of the Tuesday session.  The only major difference was the JPMorgan et al set a new low for this move down at 12:30 p.m. EDT, rather than the noon silver fix London that happened with gold.  And then, like gold, the silver price wasn't allowed to do much after that.

The high and low were reported as $17.57 and $16.85 in the December contract.

Silver finished the trading day yesterday at $16.97 spot, down 49 cents from Monday's close.  Net volume was heavy there as well at around 62,000 contracts.

Platinum hit is high tick an hour or so before the Zurich open---and except for a brief bounce going into the London p.m. gold fix, it sold off quietly for the rest of the day, closing down 5 bucks on the day.

Palladium's high came at the same time as platinum's, but then the HFT boyz and their algorithms really put the screws to the metal, with the new $763 low price for this move down coming shortly after 12 o'clock noon in New York.  The price recovered a bunch immediately after that, before trading flat for the remainder of the day.  The metal closed down 18 bucks, giving up all its Monday gains, plus four dollars more.

From its high on September 1, to its low tick yesterday, the palladium price has been engineered lower to the tune of $149---or 16%.

The dollar index closed at 85.61 late on Monday afternoon in New York---and its low tick of 85.50 came at 2:20 p.m. Hong Kong time.  The rally to its 86.20 high came at 12:25 p.m. in London.  From there it sold off to around 85.90 by 10:30 a.m. EDT---and then traded flat for the remainder of the Tuesday session, closing at 85.926, which was up 31 or so basis points from Monday.

The gold stocks opened down, but rallied into positive territory for a minute or so at the London p.m. gold fix---and once JPMorgan et al showed up, the gold price, along with their associated equities, never got a sniff of positive territory again.  The HUI closed down 1.99%.

The silver equities got crushed under the jackboots of JPMorgan et al once again, as Nick Laird's Intraday Silver Sentiment Index closed down a whopping 3.78%.

The CME Daily Delivery Report for Day 2 of the October delivery month showed that 57 gold and 170 silver contracts were posted for delivery within the Comex-approved depositories on Thursday. In gold, the short/issuer of note was HSBC USA with 49 contracts---and Barclays stopped 57 contracts.  In silver, Jefferies was the short/issuer on 139 contracts---and RCG was a distant second with 30 contracts.  The long/stoppers were Jefferies, Canada's Scotiabank and R.J. O'Brien with 41, 98 and 31 contracts respectively.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Tuesday trading session showed that there are still 2,498 gold contracts open in October, which was down 475 contracts from yesterday's report.  There are still 375 silver contracts open as well, a decrease of 39 from Monday's Preliminary Report.  From these numbers, one has to subtract the deliveries posted in the previous paragraph to get the true state of things as of the close of trading yesterday.

An authorized participant over at the GLD ETF withdrew another 76,924 troy ounces of gold yesterday---and as of 9:52 p.m. EDT yesterday evening, there were no reported changes in SLV.  But when I checked back an hour later, I was amazed to see that an eye-watering 4,075,208 troy ounces were deposited yesterday.  Since August 4, there has been just under 30 million troy ounces deposited into SLV---and silver is down $3.25 the ounce over that same period.  Ted and I are still looking for an explanation.

By the way, over that same time period, GLD is down about 900,000 troy ounces.

The U.S. Mint had another sales report yesterday to end the month.  They sold 2,500 troy ounces of gold eagles---500 one-ounce 24K gold buffaloes---and a whopping 765,000 silver eagles.  After discussions with Ted Butler, he seems to feel that the mystery buyer of silver eagles may have returned.  We'll see what October brings.  The mint also sold another 100 platinum eagles as well.

Unless something is added today, the totals for the month of September are as follows: They sold 58,000 gold eagles---14,500 one-ounce 24K gold buffaloes---4,140,000 silver eagles---and 2,700 platinum eagles.  The only product that didn't see a sales increase of over 100 percent compared to August were the gold buffaloes---and sales there were up 'only' 81 percent.

It was another big day for gold shipments out of the Comex-approved depositories on Monday.  They reported receiving a tiny 1,607 troy ounces, but 160,910 troy ounces were shipped out.  The vast majority of the gold shipped out came from JPMorgan's vault---160,750.000 troy ounces, which works out to precisely 5,000 kilobars.  The link to that activity ishere.

In silver, there was 385,747 troy ounces reported shipped in---and 879,231 troy ounces shipped out---the lion's share of which came out of the CNT Depository.  The link to that action is here.

I don't have that many stories for you today---and I hope you'll find some of them of interest.  And starting with today's column, I will no longer be posting the daily King World Newsinterviews.  If you wish to read them on a daily basis, you can go directly to Eric's website linked here---and bookmark his Internet site for future reference.

¤ The Wrap

Even though I already discussed that silver broke the pattern of technical fund net selling being the prime cause of the price decline in the reporting week, the other four metals exhibited a stark similarity in that the managed money category in gold, copper, platinum and palladium all featured big long liquidation and an increase in short positions to the point where the net selling in the managed money category accounted for more selling than any other category. 

What this proves is that the collusive commercial trickery of the technical funds, so prevalent in COMEX silver for years, has now spread to all the COMEX metals. Actual supply and demand has been pushed aside in price discovery considerations and has been replaced by crooked dealings on exchanges run by the CME. That’s because the quantities of contracts dealt with on the COMEX and NYMEX far exceed the quantities of actual materials being transacted over similar periods of time. And since we know that participants in the managed money category are purely speculative (as are their commercial counterparties), the price of silver, gold, copper, platinum and palladium is being set and manipulated by speculators. This is so against the intent of US commodity law so as to embarrass the crooks at the CFTC and CME. (I would imagine, based upon the regulatory record that the crooks at JPMorgan are beyond being embarrassed). - Silver analyst Ted Butler: 27 September 2014

It was another day where JPMorgan and their HFT buddies with algorithms in tow, ran amuck in the precious metals.  All four, plus copper, set new lows for this move down, with the engineered price declines in both silver and palladium being the most egregious.

Also some consideration should be placed on the fact that it was month and quarter end yesterday as well---but how much of yesterday's price action was a result of book-squaring is open for debate.

Here are the 6-month charts for all five once again.

These engineered price declines are already miles past where I expected them to end---and speculating on when that might happen at this point is a mug's game.   Da boyz will keep hammering away until they've got the technical funds and small traders as minimum long and maximum short as they can get them.

And as Ted Butler pointed out in a quote I posted in this space late last week:

I’ve written about technical funds and the COT Report for ages, so this may seem to be old stuff. But I’m talking about a relatively new pattern, namely, the emergence of collective short positions in the managed money category on a scale never witnessed before, particularly in COMEX silver. Simply put (and I recognize this is not a simple subject) and over the past two years, the technical funds have come to establish at times far larger gross short positions than they did in previous years. This is especially true in COMEX silver, but also true in COMEX gold and copper, as well as in other commodities.

There is no question in my mind that the increased willingness of the technical funds to hold much larger short positions than they previously held is the reason we have witnessed a series of new price lows in silver and other commodities. In other words, the only reason we are at---and have seen the new price lows in silver---is because of the record amount of technical fund short selling on the COMEX. - Silver analyst Ted Butler: 24 September 2014

That, of course, applies to the six key commodities---the four precious metals, copper---and crude oil.

And as I write this paragraph, the London open is fifteen minutes away.  Gold, silver and palladium are all off their earlier lows---but are still below their closing prices in New York yesterday afternoon.  The HFT boyz slammed platinum pretty hard---and took it down 22 bucks at one point, but it's still down 16 dollars at the moment.  Gold volume is at 16,000 contracts---and silver's volume is already pretty chunky at 6,400 contracts.  The dollar index is up a small handful of basis points.

Yesterday was the cut-off for Friday's Commitment of Traders Report---and both Ted and I were discussing just how much of yesterday's price/volume action will appear in that report.  As I've said on many occasions, they can withhold data from this report when it suits them, but we won't know for sure until the report shows up on the CFTC's website on Friday afternoon.

And as I send this off to Stowe, Vermont at 5:02 a.m. EDT, I note that gold is trading quietly sideways, but for how much longer remains to be seen.  The other three precious metals have all had new engineered price lows set---and at one point platinum was down 38 bucks.  Gold volume is just over 22,000 contracts---and silver's net volume now sits at just under 9,800 contracts.  The dollar index is being ramped higher at the moment---and is up 22 basis points as of 9:52 a.m. BST in London.

I haven't the faintest idea of what will happen in the New York trading session.  Volumes were pretty low when I filed yesterday's column, but they exploded the moment that gold got slammed shortly before 10:30 a.m. BST in London, which I pointed out before was the London a.m. gold fix.  So what JPMorgan et al may have in store for us as the Wednesday trading day progresses is a complete unknown and, like I said in this space yesterday, nothing will surprise me when I check the charts later this morning.

But one thing I do know for sure is that the precious metal mining companies will say nothing---and do nothing---even as they watch their companies, their industry---and their shareholders, get obliterated.  The CFTC, the World Gold Council---and The Silver Institute are fully complicit in all of this---and with 'friends' like these, who needs enemies?

I hope your day goes well as can be expected under these circumstances---and I'll see you here tomorrow.