As frustrating as it is, price discovery(at least for a while longer) continues to take place on the Comex. The Chinese and Indians and others continue to let this play out, because the suppression of prices works to their advantage. They take advantage by using the exchange for physical mechanism to buy futures at lower prices, exchange and transfer the physical metal to London where they have it sent to their home exchanges in China and India.

I have mentioned previously that there are three key times of day that I watch and that usually represent important highs or lows during the course of daily trading. The first is 4AM EST which seems to represent a changeover from Asian trading to European trading. The second and probably most important is 8AM EST which is when the Comex floor trading session begins which has seen more daily price cap tops and sometimes daily floors, than any other time. A third and more recent important time, is 10AM EST. This is probably because so many important economic data releases come out at 8:30 AM EST and additional releases also come out usually by 10AM.

That is often a turning point and or ceiling or floor for the trading day if the earlier economic releases caused either a spike or drop beforehand. I don’t trade futures but have used these important times and the price moves around them to sometimes trade options on stocks and ETF’s related to gold and silver. They also sometimes play in to the timing of some of the posts I make regarding the metals.

What I have been seeing is the recent relative strength in gold vs silver has been the typical way the bankers play gold and silver against one another. They often take a long position in gold and after a brief ramp for both, cap(and presumably go short silver). While gold sees some modest additional gains, silver gets stopped dead in it’s tracks and eventually works it’s way lower. They profit from both positions and move on to another day.

Today is a perfect example. There was modest strength in both early on but after some minor economic data out at 8:30 they began a usual Tuesday take down. It may last the whole day, but with some additional minor economic releases coming out at 10AM, I will be interested to see if that creates a bottom for the day or adds to the downside pressure.

I don’t believe there is a lot of room left on the downside, but the slow grind higher is being drawn out for as long as the banksters can get away with it. I hope it doesn’t take another two weeks of this range bound trading(FED Day 7/31) before we get a substantial move higher for both gold and silver.