Being a Tuesday column I have more stories than n
Being a Tuesday column, I have more stories than normal, so I hope you have the time to read/listen to the ones you like.If I am correct in my assumption that JPMorgan has established big long gold positions in COMEX futures, actual metal and gold derivatives as a hedge against their remaining COMEX silver short positions, that may be especially bullish for gold prices once we get the turn up. That’s because JPMorgan is more likely to let gold prices rip higher than they might normally. And if JPMorgan escaped regulatory action for manipulating silver prices lower, there is little chance the bank would face any actions for letting prices soar. Also in mind is that these big long gold positions were only established because of the brutal nature of the sell-off this year. This suggests to me that this is not something that can be replicated easily…or at will…and may make it a unique circumstance that must be taken advantage of accordingly. In other words, I don’t know how often JPMorgan or the commercials will be able to so favorably positioned in the future as they are currently. They better make hay while the sun is shining. – Silver analyst Ted Butler…18 May 2013Just when I thought it was over, JPMorgan et al came calling one more time. Although gold and platinum got hit a bit, it was more than obvious that silver was the metal that they were after. A drop of two bucks in about 45 minutes…about a 10 percent move…and not a word from the CFTC, the CME Group, or the miners.Now if the Dow had dropped that percentage in 45 minutes, all hell would have broken loose as everyone would want to get to find out what happened. But when it comes to the precious metals…zip, nada, nothing.But under the hood, there was, without doubt, more speculative long selling…but not too much, as there’s almost nothing left to sell on the long side. It’s a good bet that there are now more short positions in place, especially in silver…and JPMorgan et al were going long against all comers.Today is the cut-off for Friday’s Commitment of Traders Report…and if we can get through the rest of the trading day today with little or no price activity, then we should see another COT Report for the record books. But as we found out after the smash of April 12/15th…the volume data associated with that event was not reported to the CFTC in a timely manner…and it took two more weeks of reports before we finally got to see the whole thing. That may happen again this time…and it will be the first thing I check for when it’s posted on Friday.And as I pointed out further up, the powers-that-be painted key reversals to the upside so large, that even Stevie Wonder could see them. All that remains is the upside triggering event…and I’m sure not looking forward to that…whatever it may be.Here are the 6-month gold and silver charts from stockcharts.com…and the silver chart is one for the record books.(Click on image to enlarge)(Click on image to enlarge)As Ted pointed out in the paragraph I borrowed from this Saturday commentary to his paying subscribers, he feels that JPMorgan is now massively long the gold market…and with that, has basically covered its remaining short position in silver. I would guess that they added to their comfort level with Sunday evening’s engineered price decline at the New York open.There was no follow-through in Far East trading on their Tuesday…nor during the first couple of hours of London trading, either. The one attempt that gold made to break above the $1,400 spot price mark got turned back in short order…and the prices of both gold and silver have been in slow, but steady, decline since. Gold is down about ten bucks…and silver is down 40 cents as I hit the ‘send’ button on today’s column at 4:55 a.m. EDT. Volumes are over 40,000 contracts in gold and 11,000 contracts in silver…with almost all of it of the HFT variety. The dollar index, which hadn’t done much all night long, took off around 9:00 a.m. BST in London…and is up 28 basis points as of this writing…and north of the 84.00 mark again.See you on Wednesday. What we saw in all four precious metals were key-reversals to the upside so big that no T.A. analyst could possibly miss them. And as I said on Saturday, “da boyz” can print any chart pattern they want…and yesterday’s example, especially in silver, will be talked about for centuries.The dollar index closed at 84.21 on Friday afternoon in New York…and got hit for a bit more than 10 basis points the moment that trading began at 6:00 p.m. in New York on Sunday night. It’s high of the day [84.25] came three hours later at 9:00 a.m. in Hong Kong trading on their Monday morning…and it was all down hill from there. The low tick [83.72] came a few minutes after 3:00 p.m. in New York…and the index rallied a hair from there. The dollar index closed at 83.76…down 45 basis points from Friday’s close.As is most often the case, the dollar index had zip to do with yesterday’s moves in the precious metals.The gold stocks opened in negative territory by a bit, but that didn’t last long…rallying strongly into the noon price spike in New York. From there they traded basically sideways until the smallish rally developed just before 4:00 p.m. in electronic trading. The shares tacked on another percent or so..and the HUI finished up 6.04%…almost on its high tick.It was a very similar story in the silver stocks as well…and Nick Laird’s Intraday Silver Sentiment Index closed up 6.70%.(Click on image to enlarge)The CME’s Daily Delivery Report showed that 3 gold and 65 silver contracts were posted for delivery within the Comex-approved depositories on Wednesday. In silver, JPMorgan was the short/issuer on 57 contracts…and they and the Bank of Nova Scotia stopped 55 contracts. The link to yesterday’s Issuers and Stoppers Report is here.Another day…another withdrawal from GLD. This time an authorized participant took out 222,371 troy ounces…and there was also a withdrawal from SLV. This time it was 1,738,029 troy ounces.The U.S. Mint finally had another sales report. They sold 2,000 ounces of gold eagles…500 one-ounce 24K gold buffaloes…and 611,500 silver eagles.Over at the Comex-approved depositories on Friday, they reported receiving 1,260,558 troy ounces of silver…and shipped 211,435 troy ounces of the stuff out the door. The link to that activity is here.In gold on Friday, these same depositories did not report receiving any, but shipped 32,001 troy ounces out the door…all from Scotia Mocatta. The link to that activity is here.Since yesterday was the 20th of the month, The Central Bank of the Russian Federation updated their website with their April data. It showed that they added another 200,000 troy ounces of gold to their reserves…bringing their total up to 31.8 million troy ounces. Here’s Nick Laird’s most excellent chart updated with that data…(Click on image to enlarge)Here’s a chart that reader ‘David in California’ sent our way yesterday. It’s a comparison of the 1976 bull market in gold compared to the one going on right now.(Click on image to enlarge)And here’s your “cute quota” of the day… It was more than obvious that silver was the metal that they were after.The gold price jumped up about five bucks right at the 6:00 p.m. Sunday evening open in New York, but that rally got crushed immediately by the high-frequency traders…and in less than a hour, gold was down a bit over twenty bucks from its Friday close.After that, the gold price chopped around the $1,345 spot price mark until the London open. Then a rally began that tried to break out a couple of times before it really took off at noon in New York, as the market went ‘no ask’…and the price went vertical. But, as has always been the case in the past, a not-for-profit seller stepped in and became the short seller of last resort. If they hadn’t been there, the price would have gone supernova.Then shortly before 3:00 p.m. in the thinly-traded New York access market, the rally resumed, hitting its zenith at precisely 4:00 p.m. before sliding a hair into the close.The low tick [around $1,339 spot] came just before 8:00 a.m. in Tokyo on their Monday morning…and the high tick came in New York. However it’s impossible to tell from the N.Y. gold chart below, whether the high tick came at noon or 4:00 p.m. EDT. Not that it matter, I suppose. Kitco recorded the high tick at $1,400.60 spot.Gold closed at $1,394.10 spot…up $33.90 according to Kitco’s numbers…and an intraday move of fifty-five bucks. Net volume was an immense 222,000 contracts. It was a wild and crazy day…and I’ll have much more about it in ‘The Wrap’.Here’s the New York Spot Gold [Bid] chart on its own…and the big price spike at noon is even more noticeable.Of course it should come as no surprise that it was silver that JPMorgan et al were after. In less than an hour, the high-frequency traders had the price down to its low tick of the day, which the CME reported as $20.25 in the July contract, which is the next front month for silver. That’s a two dollar drop from the spot closing price on Friday…and it all happened in about forty-five minutes. Ted Butler said that only about 1,600 contracts were sold between the Sunday night open…and the low tick. In such a thinly-traded market, that’s all it took to drop the price that low.Silver recovered a bit as morning trading wore on in the Far East…and from about noon in Hong Kong, the silver price began a rally that ended with a vicious ‘no ask’ price spike at noon in New York…just like gold.After the seller of last resort showed up, the silver price chart looked more or less the same as the gold chart for the rest of the trading day…right down to the rally that ended at precisely 4:00 p.m. in electronic trading in New York.As I mentioned above, the low tick in the July contract was $20.25…and Kitco recorded the spot high price as $23.40 spot…an intraday move of $3.15.Silver closed at $22.92 spot…up 66 cents from Friday. Gross volume was immense…96,000 contracts.Platinum did not go unscathed either…although palladium was pretty much spared the beating that the other three precious metals got. Palladium had its price capped shortly after 12:00 o’clock noon in New York as well, or all four precious metals would have closed the Monday trading session at prices that would have made your eyes glaze over. Here are their respective charts from yesterday.