The price pattern in silver was similar except th

first_img The price pattern in silver was similar, except the sell-off after the price spike in New York on Thursday evening was much more intense—and the spike low didn’t occur until around 11:40 a.m. EDT in New York trading.  The price bounced back quickly, but then traded quietly higher into the close.  JPMorgan et al obviously wasted little time in getting silver back below the $21 spot price mark. The high and low tick were recorded as $21.315 and $20.78 in the September contract. Silver closed in New York yesterday at $20.89 spot, down 27 cents from Thursday’s close.  Volume, net of July and August, was 36,000 contracts. When it does, it will be ugly The gold price showed signs of going parabolic in what had all the hallmarks of a ‘no ask’ market shortly after trading began at 6 p.m. EDT in New York on Thursday evening.  But, as I mentioned in The Wrap yesterday, “da boyz” were at the ready—and within a couple of hours, the gold price was in full retreat.  The low tick came about 9:15 a.m. in New York yesterday morning—and from there the price chopped quietly higher until shortly before 2 p.m. EDT.  From there it traded basically flat into the 5:15 p.m. close. The high and low tick were recorded by the CME as $1,325.50 and $1,305.00 in the August contract. Gold closed in New York on Friday at $1,310.90 spot, down $7.30 from Thursday’s close.  Volume, net of roll-overs, was around 98,000 contracts. The CME Daily Delivery Report showed that 25 gold and zero silver contracts were posted for delivery within the Comex-approved depositories on Tuesday. I was happy to see that after two days of withdrawals from GLD, there was an increase yesterday—as an authorized participant added 57,741 troy ounces.  And as of 8:16 p.m. EDT yesterday evening, there were no reported changes in SLV.  To tell you the truth, dear reader, I’m not expecting to see any deposits into SLV for a considerable period of time, as the authorized participants are still attempting to cover their short positions in lieu of metal they never deposited during the June rally. The U.S. Mint had a tiny sales report yesterday as 1,000 troy ounces of gold eagles were sold—and 30,000 silver eagles.  Month to date the mint has sold 24,500 troy ounces of gold eagles—4,000 one-ounce 24K gold buffaloes—and a pitiful 1,025,000 silver eagles. Ted Butler nailed this a month ago, as it’s obvious to anyone who wishes to objectively examine the U.S. Mint data, that silver eagles sales have crashed by at least two thirds in July, as the ‘big buyer’ that has been sucking up silver eagles [and Canada’s silver maple leaf] for the last several years, has obviously stepped away from the table for the moment. Whether this is going to turn into a permanent withdrawal remains to be seen—and because the Royal Canadian Mint only provides quarterly sales reports for their bullion products—we won’t know what’s going on there for about another three months.  But the crashing silver eagles sales don’t bode well for silver maple leaf sales going forward, either.  It’s certainly my suspicion that it’s the same buyer at the trough in both. Over at the Comex-approved depositories on Thursday, there was a decent amount of gold received—103,561 troy ounces to be exact.  Virtually all of it went into the Manfra, Tordella & Brookes, Inc. depository.  Nothing was reported shipped out.  The link to that activity is here. It was another big day in silver again, as nothing was reported received, but 999,492 troy ounces were shipped out the door.  All the activity was at the CNT Depository—and HSBC USA.  The link to that action is here. Since the 20th of the July falls on a weekend, the always punctual and predictable Central Bank of the Russia Federation updated their website with June’s data on Friday.  Included in that update was the amount of gold bullion they purchased for their reserves that month.  It turned out to be a chunky 500,000 troy ounces. It was more or less the same chart pattern in the silver stocks, but because “da boyz” were more aggressive with silver to the downside, the rally off their 1:30 p.m. lows was only able to get Nick Laird’s Intraday Silver Sentiment Index back up to a loss of 0.70%. The gold stocks gapped down a bit less than 2 percent at the open—and then chopped sideways until the 1:30 p.m. Comex close.  A rally commenced at that point which lasted right into the close, as the HUI cut its losses on the day to only 0.30%. Platinum spiked up as well, but also got sold down until about noon in Zurich.  The subsequent rally ended/got capped shortly before 9 a.m. in New York—and from there it got sold down to its low of that day, around 1 p.m. EDT.  From there it rallied a few dollars into the close.  Platinum closed down 13 bucks on the day. The palladium price chart was a mini version of the platinum price chart.  Palladium closed down only 5 bucks from Thursday’s close. In the last three months, the central bank has purchased 1,500,000 troy ounces of gold, which is pretty close to 100 percent of their own production.  If you look at Nick Laird’s excellent chart above, you’ll note that Russia has stepped up its gold purchases in the last three months. One wonders if that has anything to do with the Crimea/Ukraine situation?  Now if they could be convinced to buy all their silver production as well, then the fox would certainly be amongst the pigeons, as Russia’s 1,700 tonne yearly production represents a bit over 6.5 percent of yearly world silver production, which is a material amount. Well, the Commitment of Traders Report for positions held at the close of Comex trading on Tuesday, July 15 was certainly not what I had hoped for, at least in silver. The Commercial net short position in silver increased again, this time by 678 contracts, or 3.4 million ounces.  The Commercial net short position now sits at 293.5 million troy ounces.  The Big 4 trader’s short holdings [read JPMorgan] increased by around 1,200 contracts—and Ted Butler pegs JPMorgan’s short-side corner in the Comex silver market at about 19,000 contracts, or 95 million troy ounces.  The ‘5 through 8’ largest short holders covered about 3,000 contracts of their short position during the reporting week. In gold, the Commercial net short position actually improved by 9,097 contracts, or 909,700 troy ounces.  The Commercial net short position in gold has obviously declined by that amount—and is down to 15.69 million troy ounces, which is still a horrendously large number. The 8 largest short holders added 1,000 contracts to their short positions—and Ted says that JPMorgan sold another 3,000 contracts during the reporting week—and their long-side corner in the Comex gold market continues to shrink, and is now down to 2.2 million troy ounces, or 22,000 Comex contracts. Ted said—and I agree—that probably not all of the decline on Monday and Tuesday was reported to the CFTC in a timely manner, so hopefully there’s some spill-over into next Friday’s Report.  If that doesn’t prove to be the case however, it’s a given that next Friday’s COT Report will be even uglier than even I imagined it might be, because in my comments in The Wrap yesterday, I stated that JPMorgan et al threw everything they had at that spike in gold and silver prices in New York Thursday morning.  That data alone should be enough to curl your hair. Of course we have two more reporting days between now and the Tuesday cut-off—and anything can happen between now and then—but as it stands at the moment, the next COT will be pretty horrific, because almost the entire technical fund short positions in both metals are still in place, plus there will be more to add.  This does not bode well for gold and silver prices somewhere down the road. Here’s Nick Laird’s “Days of World Production to Cover Comex Short Positions“—and it looks just as grotesque as it always does in all four precious metals. It’s also obvious that the situation in the precious metal market—and particularly in silver—is getting stranger by the day. 1]  There’s no physical silver available to deposit in SLV, so the authorized participants have had to short the shares in lieu of depositing real metal. 2] The frantic in/out movement in silver within the Comex-approved warehouse system is approaching the absurd.  According to Ted Butler’s calculations from the Comex warehouse reports, the extrapolated turnover year-to-date is somewhere between 200 and 300 million troy ounces per year at the moment. 3] The big buyer of silver eagles [and probably silver maple leafs as well] has stepped away from the table.  Silver eagles sales have imploded as a result—and we’ll find out in October whether the same applies to silver maple leafs. 4] The silver charts show a neutral RSI, but the Commercial net short position is sky high—and back where it was about four years ago—and the technical funds net long positions are almost at a record high. 5] With all of this going on, silver is sitting under $21 the ounce—and below the cost of production of most primary silver producers.  One can scarcely imagine what the price will be when JPMorgan et al get through harvesting this near-record technical fund long position for fun, profit and price management purposes. How all this is going to resolve itself—and over what time period—is unknown, but when it does, it will be ugly. How did it come to this? After almost twelve hours of writing this column, I’m done for the day—and the week. Enjoy what’s left of your weekend—and I’ll see you on Tuesday. I have a decent number of stories for you today—and I hope you can find the time in what’s left of your weekend to read the ones you like. “The herd instinct among forecasters makes sheep look like independent thinkers.” – Edgar R. Fiedler, author of The Three Rs of Economic Forecasting—Irrational, Irrelevant and Irreverent Today’s pop ‘blast from the past’ is by a Canadian rock group that needs no introduction, as their name is known world-wide.  This hit dates from the early 1970s—and has an unusual story behind it.  The link is here. Today’s classical ‘blast from the past’ is an old chestnut from Peter I. Tchaikovsky.  It’s the Polonaise from his opera Eugene Onegin.  I’d be the most surprised person in the world if you haven’t heard this piece in one form or another during your lifetime.  The link is here. Except for the brief price spikes shortly after the precious metal market opened early in Far East trading on their Friday, it was a nothing sort of day all around.  But it should be obvious to all but the willfully blind that “da boyz” were involved in gold and silver yesterday when they had to be. Here are the 6-month gold and silver charts updated with Friday’s data. Sponsor Advertisement The dollar index closed at 80.53 late on Thursday afternoon in New York and, like Thursday, didn’t do much during its respective trading session.  It chopped sideways in a 2 basis point range until around 9:40 a.m. EDT, when a spike took it up to 80.68—but by 2 p.m. it was back to unchanged on the day—and that’s where it closed, at 80.53.  That’s the third day in a row that the dollar index has closed at that value.  Here’s the 3-day chart so you can see it for yourself. 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