‘Da Boyz’ Cap the Precious Metal Rallies On the Bad Economic News
‘Da Boyz’ Cap the Precious Metal Rallies On the Bad Economic News by Ed Steer – Gold Seek
The gold price sold off a few dollars in morning trading in the Far East on their Friday. The price began to crawl higher starting shortly before 2 p.m. CST — and accelerated a bit in late morning trading in London. The retail sales/consumer prices data was released at 8:30 a.m. EDT in New York — and the gold price shot higher instantly, but was brutally capped within seconds on super-high volume. The high tick of the day was printed minutes before 9 a.m. — and was sold lower until around 11:15 a.m. EDT — and then traded flat for the remainder of the Friday session.
The low and high ticks were reported as $1,214.00 and $1,232.70 in the August contract.
The gold price was closed in New York yesterday at $1,228.40 spot, up $11.10 from Thursday. Net volume was pretty spectacular at around 217,000 contracts, with at least twenty percent of that amount used to put out the 5-alarm fire that occurred at 8:30 a.m. in New York yesterday morning. Roll-over/switch volume out of August was fairly decent as well.
And here’s the 5-minute gold tick chart courtesy of Brad Robertson. The main reason for posting it was to show the huge volume spike that occurred at 6:35 a.m. Denver time/8:35 a.m. in New York…20,000+ contracts. That’s what it took to kill the initial price spike that occurred on the retail sales/consumer prices data that was released at that moment. Volume didn’t drop off to anything resembling normal until after the 8 a.m. MDT/10 a.m. EDT/3 p.m. BST London afternoon gold fix.
The vertical gray line is 10:00 p.m. Denver time, midnight in New York — and noon China Standard Time [CST] the following day in Shanghai—and don’t forget to add two hours for EDT. The ‘click to enlarge‘ feature is a must.
It was virtually the same price path for silver on Friday as it was for gold. The only discernible difference was the fact that the high tick of the day came at the afternoon gold fix in London — and not at 9 a.m. in New York. Once again silver was turned back at the $16 spot mark.
The low and high ticks in this precious metal were reported by the CME Group as $15.575 and $16.07 in the September contract.
Silver finished the Friday session in New York at $15.955 spot, up 28.5 cents on the day. It would have close up $285 if allowed to trade freely in a market-clearing event for the ages. Net volume was extremely heavy at just under 85,000 contracts. Like in gold, a goodly chunk of that amount was used to snuff out the rally at 8:30 a.m. EDT.
Ditto for platinum — and the only difference with this precious metal vs. gold and silver was that it was allowed to rally a bit in early afternoon trading in New York, but ran into a concrete price ceiling at the $920 spot mark. It finished the day at $919 spot — and up 17 dollars from Thursday’s close.
The dollar index closed very late on Thursday afternoon in New York at 95.76 — and after a tiny spike upwards at the 6:00 p.m. EDT open on Thursday evening, it began to chop quietly lower. The rug got pulled out from under it on the 8:30 retail sales/consumer prices numbers. The precipitous decline was halted at 9 a.m. by the usual ‘gentle hands’ I would suspect — and it continued to head quietly lower from there, closing almost on its low tick of the day. The dollar index finished the Friday session at 95.10 — and down 66 basis points from Thursday.
It was another one of those trading sessions…the second one this week…where if the Plunge Protection Team hadn’t been at battle stations, the dollar index would have crashed and burned once again. That’s why I post the 6-month U.S. dollar index chart for its entertainment value only. Because its ‘value’…like the precious metals…has absolutely nothing to do with free-market forces.