NEW YORK (TheStreet) — The gold price got sold down about ten bucks during the first hour of trading in Hong Kong and then traded in a tight $10 price range for the remainder of the Thursday trading session. The two small rally attempts in New York, one at the Comex open and the other during their lunch hour, didn’t get far. The last rally, such as it was, died just minutes before the Comex close. The highs and lows aren’t worth mentioning.
Gold finished the trading day in New York on Thursday at $1,407.20 spot, down $10.60 from Wednesday. Volume, net of what few rollovers there were, came in around the 143,000 contract mark.
The price pattern in silver had a little more shape to it, but was very similar to gold’s. Silver got sold down two bits in the early going in Far East trading. The tiny rally that began during the Hong Kong lunch hour got sold down hard. Then the rally that began late in the morning in London got dealt with a few minutes after the Comex open, and the last rally attempt died at the Comex close.
After that, the silver price got sold back below the $24 spot price mark, and then traded sideways into the 5:15 p.m. electronic close.
Silver finished the day at $23.87 spot, down 52 cents from Wednesday. Net volume was pretty heavy at 48,000 contracts, with almost all of it in the new front month for silver, which is December.
Both platinum and palladium sold off gently in every market on Planet Earth yesterday. Here are the charts.
The dollar index closed late on Wednesday afternoon in New York at 81.44. When trading began in the Far East shortly thereafter on their Thursday morning, the index traded flat until noon in Hong Kong. Then away it went to the upside for the second day in a row, with the rally topping out at 82.05 around 11:20 a.m. in New York, shortly after London closed for the day. After that it traded pretty flat into the close. The index finished Thursday at 82.005, up about 56 basis points.
In the face of a negative day for the metal itself, the gold shares did rather well, and the HUI managed to eke out a small gain, closing the day up 0.80%.
With the exception of one mining company, all the stocks in Nick Laird’s Intraday Silver Sentiment Index closed down on the day. The index closed lower by 0.82%.
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The CME’s Daily Delivery Report showed that only 9 gold contracts were posted for delivery later today within the Comex-approved depositories and, true to form, JPMorgan stopped 8 of them in its proprietary trading account. This completes the deliveries in both gold and silver for the August month.
But the big surprise was the first notice day in silver, as 1,661 contracts were posted for delivery next Tuesday. It wasn’t the amount that was a surprise, it was the identity of the big short/issuer, who turned out to be none other than JPMorgan Chase with 985 contracts out of it’s in-house [proprietary] trading account. There was quite a list of short/issuers, each with a decent amount of contracts issued.
The list of long/stoppers was also a bit of a surprise. As usual for first notice day, there were a couple of dozen of them, but the major ones were Canada’s Bank of Nova Scotia with 825, Credit Suisse in its proprietary trading account with 241, and JPMorgan in its client account with 233 contracts.
The link to yesterday’s Issuers and Stoppers Report is link here, and is definitely worth a minute or so of your time.
For the second day in a row there were no reported changes in GLD or SLV, and no sales report from the U.S. Mint.
Over at the Comex-approved depository in gold, there was only 514 troy ounces shipped out the door, and none was received.
In silver there was 658,320 troy ounces received, and 260,846 troy ounces shipped out. The link to that activity is here.
I have a decent number of stories again today, and some of them are quite important, so I hope you have the time to read the ones that interest you.
¤ The Wrap
I remember writing over the past year or two about the discovery of a silver cache in a ship sunk in World War II by a German U-boat. The SS Gairsoppa was discovered in 2011 and salvage efforts have been underway since. It made the news a month or so ago, as silver bars were raised to the surface amid the glare of TV cameras.In a little-noticed story and buried at the end, the recovery efforts were recently not extended due to concerns that the price of silver was too low. Hey, it’s one thing when the price goes below the cost of production, but you know silver is really cheap when it goes below the cost of recovery as sunken treasure. – Silver analyst Ted Butler, 28 August 2013
I wouldn’t read much into yesterday’s price action in either metal, except for what I noted at the top of this column, that the two rallies of any substance yesterday both got dealt with in the usual manner during the Comex trading session.
But the big surprise yesterday, at least for me, was the fact that JPMorgan Chase ended up as the largest of the short/issuers in silver on First Day Notice, and even more surprising was the fact that Canada’s Bank of Nova Scotia was the biggest long/stopper.
It’s always been my opinion that, along with JPMorgan Chase, Canada’s Scotiabank/Scotia Mocatta was the number two player on the short side in both gold and silver, and that this delivery of a bit more than 4.1 million ounces of silver would take a very large bite out of what Scotiabank is still short.
As the CFTC pointed out on their website late last year, “The October 2012 Bank Participation Report includes COMEX gold and COMEX silver futures and options positions for a newly classified non-U.S. bank, based upon the entity’s self-description on its latest CFTC Form 40. Given the methodology of the Bank Participation Report, the entity’s most recent Form 40 submission results in all of its futures and options positions now being included within the report.” That notification is still posted on the CFTC’s website here, so you can read it for yourself if you doubt me. Ted Butler mentioned the possibility that it might be Scotiabank, and almost instantly I was 100 percent convinced that it was, as the fit was perfect.
Shortly after that, I got into a long e-mail discussion with someone from Scotiabank’s head office, and he would neither confirm nor deny it. The entire thread was posted in this space late last year as it developed.
Here are the current Bank Participation Reports for both silver and gold . Chart #4 on each is most applicable, and you’ll need to use the ‘Click to Enlarge’ feature to bring them up to full screen size. Please note how the non-U.S. bank category in both metals blew out in October 2012. Those were the Comex futures positions of the bank that the CFTC was referring to. It only lacked a name, and I was happy to provide it.
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If anyone at Scotiabank or Scotia Mocatta reads this and can prove I’m wrong with some hard facts and figures, mainly the last five years of the CFTC Form 40, I’ll be happy to print a retraction. They’ve had that opportunity on many occasions since last October, but I haven’t heard a peep from them.
The other news event that I find interesting is the fact that the White House may go it alone in Syria. If they do, in fact, do that, it wouldn’t surprise me in the slightest if that event, or the blowback from it, is what launches the precious metal prices to the moon. As I’ve said on many occasions, when the precious metals are finally allowed to go ballistic, it will be hidden behind the skirts of a major world event. It could have been economic, financial or monetary up until this point, and still could be, however military adventurism was never an option I considered until now. I was always wary that another 9/11 event would be sprung on us by the powers that be. As Ron Paul so correctly stated, you have to be on the look-our for obvious false-flag events.
We’ll see what happens going forward.
Today, at 3:30 p.m. EDT, we get the latest Commitment of Traders Report for positions held at the close of Comex trading on Tuesday. I’m not really sure what to expect, but I’m prepared for the worst, while hoping for the best. Whatever the numbers turn out to be, I’ll have them for you in tomorrow’s missive.
Both gold and silver were sold down a bit in Far East trading on their Friday, and as you’ve already noted the moment that London opened, both these metals got sold down even more. Volumes are pretty heavy for this time of day, especially in silver. The dollar index is flat, hovering just below the 82 mark. And as I hit the send button on today’s column at 5:17 a.m. EDT, gold is down about eleven bucks, and silver is down about 20 cents.
That’s more than enough for today. Enjoy your weekend, or what’s left of it if you live west of the International Date Line, and I’ll see you here tomorrow.
