Did JPMorgan Cover More Short Positions Yesterday?

Well, that little dip in the gold price in the wee hours of yesterday morning didn't amount to much… although it did set the low [around $1,231 spot] for the Tuesday trading session. The price began to move up sharply shortly before Comex trading began yesterday… and was up $14 by the time the London p.m. gold fix rolled around at 10:00 a.m. Eastern time. From that point, gold only tacked on another four bucks or so to its high of the day [$1,251.20 spot] around 2:00 p.m. in New York… and from there, gold slid a couple of dollars into the close of electronic trading at 5:15 p.m. Eastern time.

The silver price declined starting at 1:00 p.m. Hong Kong time… and hit its low [around $18.80 spot] shortly after lunch in London… about an hour before the Comex opened. Then, in just over an hour, silver tacked on about 50 cents. The silver price continued to rise, albeit mores slowly, and bounced off its high of the day [$19.43 spot] several times before closing at $19.40 spot.

When I spoke with Ted Butler yesterday, he was of the opinion that the initial price spikes [the ones in both silver and gold before 10:00 a.m. in New York] was JPMorgan covering short positions. And, like Tuesday of last week, yesterday's big short covering rally occurred on the cut-off day for this Friday's Commitment of Traders report. Last Tuesday's big short covering rally wasn't in last Friday's report… and I would be really surprised if yesterday's big price spike is in this Friday's report. We'll have to wait and see, but I'm not holding my breath.

The dollar did nothing of consequence yesterday. Here's the graph for entertainment purposes.

The precious metals stocks did well until around noon… and then began to slide… despite the fact that both gold and silver had not yet reached their highs of the day. Then, like the rest of the equity markets, the HUI rolled over shortly after 2:00 p.m. in New York… and well over half of Tuesday's gains evaporated. The HUI only finished up 1.15% on the day. I must have admit that I was expecting better.

Yesterday's CME Delivery Report showed that 76 gold, 203 palladium and 408 silver contracts were posted for delivery on Thursday. JPMorgan was the biggest stopper in silver… and the link to all the action is here.

I mentioned yesterday that I was surprised that there was such a low number of silver contracts posted for delivery on September 1st… and this makes it two days in a row. Normally, the first couple of days of the delivery month are huge, as the issuers want to deliver and get their money and move on. That hasn't happened so far. Ted is of the same opinion. We wonder what it means… if anything.

Both GLD and SLV had reports yesterday. The GLD ETF added a rather large 127,059 ounces of gold… and SLV added 978,688 troy ounces. And, surprisingly enough, the U.S. Mint had no sales report again yesterday… finishing off August as the slowest bullion coin sales month of 2010. For the month of August… 41,500 ounces of gold disappeared into their gold eagle program… plus 15,500 24-K gold buffaloes… and 1,906,000 silver eagles were also sold.

Over at the Comex-approved depositories, the in-and-out action pretty much cancelled each other out… and there was a tiny net gain of 6,708 troy ounces of silver in their Monday report. The link to that action is here.