Whatever is going on behind the scenes is known on

first_imgWhatever is going on behind the scenes is known only to those who need to know. I wouldn’t read much into Tuesday’s price action anywhere on Planet Earth yesterday, although there was some structure to the market…the sell-off up until 2:00 p.m. in Hong Kong, gold’s low of the day…then what looked like a short-covering rally of sorts around 9:00 a.m. in London…then the gentle decline into the London close…and the rally into the close of electronic trading in New York…the second day in a row that has happened. The high tick…$1,478.60 spot…came just about at the electronic close.  The low, around $1,460 spot came minutes after 3:00 p.m. Hong Kong time, less than an hour before London opened. Gold closed on Tuesday at $1,477.20 spot…up 70 cents from Monday.  Gross volume was in the neigbourhood of 154,000 contracts, which wasn’t a lot. I’ve whittled today’s story list down to what I consider the bare minimum but, as always, the final edit is up to you. I believe in only one thing…liberty.  But I do not believe in liberty enough to want to force it upon anyone. – H.L. Mencken It was another ‘nothing’ day in the precious metals yesterday…as the high-frequency traders kept a lid on the markets…and I don’t expect much to happen until “da boyz” decide that it’s time.  It’s incredible to watch the frantic in/out movements in the Comex-approved gold and silver depositories…and even more incredible to watch gold get removed from GLD…while SLV stocks are on the rise. Whatever is going on behind the scenes is known only to those who need to know…and doesn’t include “we, the people.” The 20-day moving averages are sneaking every closer.  Gold close on its 20-day moving average yesterday…and silver’s current price isn’t that far away, either. If gold and silver prices are allowed to break [and close] above these price points, it will be interesting to see how the mega-short technical funds will react.  And the even more important question to be asked is will JPMorgan et al sell to them at a low price, or at a much higher price?  Questions with no answers at the moment…and I know that silver analyst Ted Butler is also watching this situation closely. Here are the 6-month charts in both metals with their respective 20 and 50-day moving averages displayed.  As you can tell, we’re on the cusp…and today’s price action should be watched more carefully than normal. 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Company highlights: Alvalade Project JV with Antofagasta Minerals SA – Copper and Zinc on 1000 km2 project area in the Portuguese Pyrite Belt – 2012 exploration budget of US$ 2.5 million, all provided by Antofagasta, including 6000 meters of core drilling Gold exploration in the Erzgebirge Mining District, Germany – 307 km2 exploration license in 1000+ year producing region of tin, tungsten, silver, base metals, and uranium – Increasingly favorable permitting and mining regulations, long mining culture, widespread known gold panning locations Covas Tungsten JV with Blackheath Resources Inc. – 922,900 mt @ 0.78% WO3 (non NI 43-101 compliant) historic resource – Potential to increase the tungsten resource – New gold target on the project Strong management including Paul Kuhn, CEO, previously involved with several discoveries around the world, and Mark T. Brown, Director, founder of Rare Element Resources Ltd. Low risk exploration strategy Share structure and cash on hand (12/31/2011): 16.1 million shares outstanding; 23.7 million shares outstanding, fully diluted 40% of shares held by insiders, family, friends, and long-term investors Approx. C$ 500,000 cash on hand (consolidated Canada and Europe) Antofagasta has provided US$ 350,000 for all anticipated Alvalade JV expenses for Q1 2012. Please visit our website for more information. Despite the fact that silver closed down by about a percent on the day, every stock in Nick Laird’s Intraday Silver Sentiment Index closed in positive territory…and the index showed a gain of 1.81%.  Platinum and palladium traded in a very narrow range in all markets yesterday. The dollar index closed at 82.14 on Monday afternoon in New York…and then traded more or less sideways until 9:00 a.m. in New York.  Two hours later it was at its low of 81.61…and barely recovered off that low, closing the Tuesday session at 81.72…down 42 basis points from Monday’s close. There was absolutely no indication of that big currency move to be found in any of the precious metals prices.  As I’ve said before, the relationship between the currencies and the dollar…over the long term…is myth.  It’s also a myth over the short term as well, with today’s action being a case in point. In silver, the big rally into the New York electronic close on Monday wasn’t allowed to stand…and by 2:00 p.m. on Tuesday afternoon, the entire rally, plus all of Monday’s gains, were history.  Then silver price followed the same price as gold did, but never came close to getting back to its Monday closing price. The low was a hair over $24.00 spot in afternoon trading in Hong Kong…and the high was in during the London lunch hour. Silver closed at $28.35 spot…down 24 cents from Monday.  Net volume was around the 32,000 contract mark. I was somewhat taken aback by how hard the gold stocks got hit at the 9:30 a.m. open of equities trading in New York yesterday…but after being down over 3 percent for most of the morning, the shares began to struggle back starting around noon EDT.  I was even more taken aback when the share rallied powerfully into the close…and finished on their absolute high tick of the day…with the HUI closing up 1.03%.  I’m not sure what to make of that action.  Let’s see if there is any follow-through in today’s trading. (Click on image to enlarge) (Click on image to enlarge) I also note the bullish configuration of the MACD lines as well…but as you already know, ‘da boyz’ can paint any chart pattern they want…and the T.A. guys swallow it up like it was the gospel.  As I’ve said many times, technical analysis is meaningless in a market where prices are managed. The Fed meeting concludes today, but like every other time they’ve met over the last year or so, they are now powerless to stop, or even slow down, the money-printing process.  Not only is it “print, or die” time…it’s also “print…and die” time.  It’s baked in the cake.  So what they say when the time comes early this afternoon, really doesn’t mean much. However, having said that…I wouldn’t be at all surprised if the precious metals market “reacted” to the news. The world’s central banks need some inflation in the system…and one of the ways to get people’s attention would be to run the gold price up a bit…and get their captive main-stream media outlets to write the proper stories…just like the wrote the proper stories prior to the engineered price decline of a few weeks gack.  I’m speculating here, but I’m not the only person that has floated this idea…and I’m in some rather good company. As I type this paragraph at 3:35 a.m. Eastern time, the London market has been open for 35 minutes.  Gold and silver volumes are shockingly low…a hair under 10,000 contracts in gold…and just under 3,000 contracts in silver.  This looks like it could be real trading volume rather than the price-controlling high-frequency stuff.  The dollar index is comatose. And as I hit the ‘send’ button on today’s column at 5:15 a.m. Eastern time, the prices of both silver and gold are still down a bit, but with volume still at extremely low levels, I wouldn’t read much into that price action…and the dollar index still isn’t doing much of anything. I hope your day goes well…and I’ll see you here tomorrow. Sponsor Advertisement (Click on image to enlarge) The CME’s Daily Delivery Report for ‘Day 2’ of the May delivery month in silver showed that 394 gold and 357 silver contracts were posted for delivery on Thursday. In gold, the only short/issuer worth mentioning was JPMorgan Chase out of its client account, with 368 contracts issued.  Canada’s Bank of Nova Scotia was the only long/stopper of note with 354 contracts. In silver, there were a lot of short/issuers, but the main one was Merrill with 153 contracts…and the largest of the long/stoppers was JPMorgan Chase in its client account with 164.  Yesterday’s Issuers and Stoppers Report is also worth a quick peek…and the link is here. GLD was down again…this time an authorized participant withdrew 67,695 troy ounces and, for the fourth day in a row, an authorized participant added silver to SLV.  This time it was rather chunky 1,448,739 troy ounces. In the last eight calendar days there has been 4.3 million ounces of silver added to SLV…and during that same period 600,000 troy ounces of gold have been withdrawn from GLD.  Something does not compute here…and that story about “investor liquidation” in GLD is getting a little tired.  It appears that there is something else going on that we aren’t privy to, at least for the moment. The good folks over at Switzerland’s Zürcher Kantonalbank…for the week ending at the close of trading on Monday…reported that 33,111 troy ounces of gold were withdrawn from their gold ETF but, for the second week in a row, more silver was added to their silver ETF.  This time it was 169,402 troy ounces.  Where the heck is all the silver coming from that’s disappearing into all these silver funds? The U.S. Mint had a tiny sales report yesterday.  They didn’t report selling any gold eagles or buffaloes…but they pushed their silver eagles sales up by another 111,500…finishing the month at 4,087,000. If yesterday was the last change to April’s sales, then the month ended with 209,500 ounces of gold eagle sales…along with 37,000 one-ounce 24K gold buffaloes…plus the silver eagle total above. Here’s another piece of gold sales trivia for you to chew on.  Year-to-date in 2013, the U.S. Mint has sold 132,000 one-ounce 24K gold buffaloes…a bit over four tonnes.  That equals [to the ounce] the number of gold buffaloes sold during the entire 2012 calendar year! Over at the Comex-approved depositories on Monday, they reported receiving 647,095 troy ounces of silver…and shipped 649,75 troy ounces out the door.  The link to that activity is here. In gold, the Comex-approved depositories reported receiving 269,169 troy ounces on Monday…and shipped 189,258 troy ounces out the door.  The link to that activity is here. Here’s your daily “cute quota”…last_img

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