It was obvious that there were notforprofit sell

first_imgIt was obvious that there were not-for-profit sellers about…especially in the silver market.The gold price traded in a very tight range all through Far East and the first part of the London trading day.  The several attempts that the price made to break above the $1,695 spot mark, were easily turned back.The New York high [$1,696.20 spot] came about twenty minutes after the Comex open…and that was it for the day, as a willing seller came along and sold the price down about ten bucks…and it recovered a few bucks after that.The low price tick of $1,682.80  spot came around 10:40 a.m. Eastern time.Gold closes at $1,684.80 spot…down an even $7.00.  Net volume was very light…around 96,000 contracts.Like the Tuesday trading day, silver had a life of its own yesterday.  The price mostly chopped sideways in a twenty cent range during Far East trading.  The low of the day appeared to come shortly after the London open…and rallied from there.  It really took off at the Comex open…got smacked…and then rallied strongly again after the London p.m. gold fix was in.  The high tick was $32.58 spot…and that came around 10:25 a.m. Eastern.That rally got hit even harder by a not-for-profit seller…and fifteen minutes later, silver hit its low price tick of $32.04 spot.  The subsequent forty cent rally lasted right up until very shortly before the Comex close and, like Tuesday, got sold off in the electronic trading that followed.When the smoke cleared, silver was up the magnificent sum of 2 cents…closing the Wednesday session at $32.23 spot.  Volume was around 33,000 contracts.I thought I’d include the New York Spot Silver [Bid] chart on its own, so you can see the details of the New York trading day with more clarity.  The footprints of JPMorgan et al are more than obvious.The dollar index opened at 79.87 in early Far East trading on their Wednesday…and had another wild day like it had on Tuesday.  It traded as low as 79.71…and as high as 80.08…and closed 79.86, basically unchanged.  Except for the fifteen minute sell-offs in both silver and gold that accompanied a small portion of the morning dollar index rally in New York, there was virtually no co-relation between the precious metal prices and the currencies yesterday.Here’s the 3-day chart so you can see the bit of a ride the dollar index has had since the Tuesday morning open in the Far East…Even though the gold price was flat going into the open of the New York equity markets, the shares headed for the nether reaches of the earth immediately…and never looked back despite what gold was doing.  The HUI finished on its absolute low of the day…down 2.87%.Past experiences have taught me that counterintuitive price action in the shares is, at times, a precursor to a bear raid in the metal itself.With the odd exception, the silver shares were down across the board as well…but the damage wasn’t as bad.  Nick Laird’s Intraday Silver Sentiment Index closed lower by 1.73%.(Click on image to enlarge)The CME’s Daily Delivery Report is hardly worth mentioning, as only 7 silver contracts were posted for delivery on Friday.Over at GLD they reported a withdrawal of 58,089 troy ounces of gold…and there were no reported changes in SLV.There was no sales report from the U.S. Mint.It was a very busy day over at the Comex-approved depositories on Tuesday.  They reported receiving 1,017,030 troy ounces of silver…and shipped 1,942,672 troy ounces out the door.  However…417,547 troy ounces of the activity on both sides of the ledger was a transfer out of the CNT Depository…and into Brink’s, Inc.  The big withdrawal [1.52 million ounces] was from Scotia Mocatta.  Tuesday’s activity is definitely worth a look…and the link is here.There was a story out last night that the Royal Canadian Mint went on allocation with its silver maple leaf bullion coin yesterday morning.  At 1:05 a.m. Eastern time this morning, I went on the RCM’s Media Room page and looked under News Releases…and saw nothing about it.  Maybe the story was posted elsewhere on the RCM’s site…but until I see the hard copy confirmation somewhere, I’ll stick this in the ‘hearsay category.  However, I just wanted you to know that the story was out there.Unbeknownst to silver analyst Ted Butler, I stole a couple of paragraphs from his mid-week commentary to his paying subscribers yesterday…which he’ll discover when he runs through my column this morning.  The linked essays embedded in it…”Life After Bear Stearns”…is a must read.“It’s just a fact of life that we can’t usually see the full picture on any significant silver development at the time. That’s because all the details aren’t available or visible when we first learn of something new. The best example I can give you was of JPMorgan’s takeover of Bear Stearns in 2008. I even wrote an article about it back then titled “Life After Bear Stearns” in which I talked about many of my usual themes, COMEX, COT, SLV and the first sell-out of Silver Eagles by the US Mint. I stand by everything I wrote in that article, but I admit that I had no clue at the time that Bear was the big COMEX silver short. Nor did I know that Bear Stearns most likely failed because of its giant silver short position and its inability to meet a $1 billion margin call on silver. It was only when the August 2008 Bank Participation Report was released and subsequent correspondence from the CFTC that the full facts became known.”“I feel similarly about the big SLV deposit in that we know it is significant, but all the details are missing. At this stage of the game, I feel confident that if and when the full story is known it will parallel and confirm the silver manipulation story to date, just as the real story on Bear Stearns did. The central conclusion of just about everything that comes out in silver is that this has been a manipulated market that is destined to end at some very high final price, no matter what is thrown at it in the interim.”Ted mentioned the August 2008 Bank Participation Report in silver in the above commentary.  Here’s Nick Laird’s chart of that monthly report in silver going back twelve years.  A cursory glance at the red bars on charts #4 and #5 for August 2008 shows the sudden appearance of Bear Stearns’ mega-short position…now on the books of JPMorgan Chase.  Bear Stearns didn’t have to report this position to the CFTC on a monthly basis, because it wasn’t classified as a bank.  It was, in fact, an investment house.  But that certainly wasn’t the case for JPMorgan.  They are a bank…and they had to report.  And they did. [The ‘click to enlarge’ feature is a must here.](Click on image to enlarge)The other eye-opening development was the sudden appearance of the non-U.S. bank with a monster short position in silver. That showed up in October of 2012…and it’s my belief that this non-U.S. bank was none other than Bank of Nova Scotia/Scotia Mocatta.  Note the blue bars in the last four months of data on Chart #4.  I asked them politely on several occasion if they were the new non-U.S. bank that the CFTC mentioned on their website.  They wouldn’t say they were…but they didn’t deny it, either.I have a lot of stories again today, so I hope you can at least read the introductions to each one so you get the flavour of the story.When the white missionaries came to Africa, they had the Bible…and we had the land.  They said “Let us pray.”  We closed our eyes.  When we opened them, we had the Bible…and they had the land. – Desmond TutuEven though volume was light yesterday, it was obvious that there were not-for-profit sellers about…especially in the silver market.  Heaven only knows how high the price would have gone if left to its own devices.  The fact that “da boyz” stepped in three times during the Comex trading session should tell you a lot.I was also less than amused about the performance of the shares, as they stunk up the place once again.  And as I mentioned further up, this counterintuitive price action in the shares is, at times, a precursor to a bear raid in the metal itself.  We’ll see if this is the case this time…as the charts in both gold and silver are potentially set up to ‘fail’ at their respective 50-day moving averages.One other thing about that big deposit into SLV last week. Ted Butler pointed out that it was made on the morning of January 16th.  The cut-off for the bi-monthly short position report posted over at shortsqueeze.com Internet site is at the end of trading on January 15th.Ted mentioned in his bi-weekly commentary yesterday that the latest report from shortsqueeze.com will most likely be posted on their Internet site tomorrow…and because that big deposit was carefully made after the cut-off date, it won’t be in that report.It’s my opinion that this was a deliberate act…but maybe I’m looking for black bears in dark rooms that aren’t there.If one were of a suspicious nature, you would have to ask yourself what might happen during the next couple of weeks in the silver market that required the precise timing of the monstrous surprise deposit in SLV.  Based on my suspicion, I’d guess that it was made to cover a short position…and that they wanted to hide what they were doing for as long as humanely possible.  As they say, we will find out in the fullness of time.It was also quite a coincidence that this HSBC USA purchase of Polish silver occurred within a very short time of the SLV deposit.  It may be nothing in the grand scheme of things, but the fact that it wasn’t public knowledge until KGHM was forced to report it, is just another data point for consideration.In overnight action, both gold and silver were sold off a bit in Far East and very early London trading…and then really took a turn for the worse at 10:00 a.m. GMT…as it appears that we may be in the early stages of the engineered price decline that I spoke of earlier.  As I hit the ‘send’ button at 5:35 a.m. Eastern time, gold is down a bit over ten dollars.  At one point, silver was down over 50 cents…and has recovered only slightly since.  Gold volumes, which had been a little heavier than normal at the London open, have now blow out quite a bit…and there are considerable roll-overs out of the February contract, which hasn’t been the case lately…at least not this early in the trading day.  Silver’s net volume was already very heavy by the open in London…and is now heavier still…around 11,000 contracts.I note that this price pressure is confined to gold and silver…because platinum and palladium appear to be trading without much interference.  The dollar index is bouncing around the 80.00 mark pretty good at the moment…but what it means, if anything, is hard to tell.  It could get interesting when Comex trading begins at 8:20 a.m. Eastern time.That’s all for today…and I’ll see you here on Friday. 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