The Impenetrable 1750

This is the first of two posts today as I try to get caught up from yesterday. The metals have rallied nicely while The Pig has fallen but, of course, the question is: What happens next?

Our buddy, "Ranting Andy" has ranted for years about the predictable nature of The Cartel's beatdowns, noting that they often occur at the same time, nearly every day. Earlier this week, we saw blatant, unhidden manipulation on the LBMA at precisely 3:00 am EST. Today, for whatever reason, the 3:00 am attack wasn't quite as sharp so the responsibility fell to their brethren on the Comex. As you can see below, the monkeys barely misses a beat.

paper_2-8amgold5.jpg

As often stated here, I don't really care if you agree or disagree with me regarding the manipulation of PM prices. If you choose to remain in NormalcyBiasLand, hoping and praying in the illusion of "free markets", knock yourself out. I'm just here to tell you what I believe and, to me, it is very clear that the precious metals are actively manipulated and suppressed on a daily basis.

Does this mean that gold is going straight down from here? Of course not! The fundamentals remain extraordinarily strong. The Cartel simply fights to keep prices "under control" for a variety of reasons.

This brings us back to the title of this post. Why is $1750 being defended so vigorously? Well, it serves two purposes:

  1. Perhaps by holding the line at 1750, The Cartel can discourage enough spec long buying that gold will eventually roll over and get trapped in a box roughly bounded by 1700 and 1750.
  2. However, since this is unlikely, the main purpose is to suck up buying pressure at 1750 so that those funds are unavailable for use at 1800.

You see, $1800 is the real deal, The Battle Royale. When gold finally breaches that level again, on a daily and weekly basis, it will be cleared for a run back to the old highs of 1900+. Of course, The Cartel will be ready and waiting there to attempt to paint a double top but they'd rather not fight that fight. From their perspective, it would far preferable to instead hold gold below 1800. So, here's what I expect: I think gold will continue to struggle with 1750 for a while, maybe even another week or so. It will then break higher and through 1750 and 1760 and begin its run toward 1800. $1800 will be a Battle Royale.

paper_2-8amgoldd.jpgpaper_2-8amgold6.jpg

Again, as discussed here ad nauseam, much will depend upon short-term changes in the POSX. Having fallen through its two-week floor yesterday, it will be interesting to see if the 78.80 (March) level will act as resistance today. I suspect it will and I'm looking for The Pig to fall toward 78 before the next level of support emerges.

paper_2-8ampig.jpg

Silver continues to look the best of all. It now appears to be building a base above $34, which is exactly what you would hope it would do following a successful breakout through resistance. Watch the level between 34.40 and 34.50 as a clean break through there will mean that the move is on to $35+. I would advise you against getting sucked in at this point, though. Silver is going to encounter very stiff, EE resistance between 35 and 35.50. That area will be Battle Royale I for silver. Battle Royale II will be the down-sloping trendline off of the April and September highs. That line currently resides around $37. The moral of the story is: The quick, easy money in paper silver is just about over. We'll need silver to fight and win the two Battles Royale before we can go aggressively long again.

paper_2-8amsilvd.jpgpaper_2-8amsilv6.jpg

Finally, just some cleanup of some headlines from yesterday and today. First up, there's this headline from RanSquawk that I saw earlier today on ZH:

"Iran and China to discuss alternatives to the USD; to discuss alternative currency oil trades according to the MEHR news agency"

Hmmm. Any chance that the headline above is related to this:

http://www.zerohedge.com/news/uss-enterprise-holding-drills-attack-made-faux-theocracy-shahida-states-and-pesky-garnetians

or this:

http://www.debka.com/article/21716/

Lest you think there's actual hope for austerity and fiscal sanity in the U.S., I give you this:

http://news.investors.com/Article/600452/201202080802/government-dependence-jumps-under-president-obama.htm

And one last note about the ridiculously fabricated BLSBS numbers from last Friday. Our buddy, Jim Quinn, chimes in below:

http://www.theburningplatform.com/?p=28887

OK, that's all for now. Give me a few hours and check back for that post on the miners that I've been promising you. Have a fun day!  TF

154 Comments

bellyacre's picture

FIRST

First!!!!

StevenBHorse's picture

I encourage all to do this.

I am issuing a fatwah against any and all people who simple write a post saying "X number".

You will be placed on ignore.

You petty fucking children, grow up.

I encourage everyone else to do the same.

And if Bellyacre tries to respond to this I will never see it.

Oh well, my loss.

And if you want to ignore me, so be it.

MonkeySmoke's picture

reviewing the Kitco chart...

shows that gold hit or slightly breached $1750 five times in the last 18 hours. While silver is currently bumping off $34.40. Both of these seem to be "lines in the sand". they both will fall, maybe even today.

mack's picture

thank-you

very good summery

JoeKa's picture

Gunning monkeys

Wild monkey alert!

Ok technically a chimp...but still part of the monkey species.

With a gun.

monkey-war.jpg

Aww nuts!

¤'s picture

Thanks for the update

If they keep gold around or under $1750 it's probably seen by the general public as being closer to $1500 then $2000 and not so safe as an investment due to it sliding backwards towards $1600 etc. That's not what I believe, but if I were a average investor who only listens to the MSM or if I only the heard the negatives about gold then I'm probably thinking it's too volatile and falls too rapidly. 

$1750 would seem to be a big psychological benchmark (among other things) that they are trying to hold the line on.  Once we approach or breach $2000 is when it will grab everyone's attention, big and small investors alike, and I don't think they are ready for $2000 gold or $50 silver yet. 

$1750 keeps it on the razors edge of risk for now for the small and uninformed investor who only hears of gold mostly being sold off at times and all of the downside risk. Thank the MSM for that.

Be Prepared's picture

Rasta Monkeys...

Don't Worry... Be Happy...

FleetFeet's picture

Out-of-money experience

Continuing posting items from a recent issue of The Sun.  The quotations below were not linked at the time they were first uttered.  But don't they fit together well?  

*****

I am having an out-of-money experience.

                                                           Author unknown

*****

The issue isn’t just jobs.  Even slaves had jobs.  The issue is wages.

                                               Jim Hightower - columnist, radio commentator,

*****

The poorest people in our country today . . . are earning wages so low that they cannot begin to function in the mainstream of the economic life of our nation. . . .  We have thousands and thousands of people working on full-time jobs, with part-time income. 

                                                           Martin Luther King Jr. 

JoeKa's picture

Monkey In Black

What happens when Agent J goes ape shit.

This.

w221637143.jpg

silverwood's picture

The first shall be last and the last shall be first

LANDOWNER: I will give each of you a denarius to work in my vineyard for the day.
WORKERS: That sounds fair to us.
NARRATOR: About the third hour he went out and saw others standing around doing nothing.
LANDOWNER: You also go and work in my vineyard and I will pay you whatever is right.
WORKERS: We’ll do it!
NARRATOR: The landowner went out again about the sixth hour and the ninth hour and did the same thing. About the 11th hour he went out and found still others standing around doing nothing?
LANDOWNER: Why have you been standing here all day doing nothing?
WORKERS: Because no one has hired us.
LANDOWNER: You also go and work in my vineyard.
NARRATOR: In the evening…
LANDOWNER (TO HIS FOREMAN): Call the workers and pay them their wages, beginning with the last ones hired and going on to the first.
NARRATOR: The workers who were hired about the 11th hour came and each received a denarius. So when those came who were hired first, they expected to receive more. But each one of them also received a denarius.
WORKERS: This is not fair! These men who were hired last worked only one hour, and you have paid them the same as us have done most of the work in tat of the day.
LANDOWNER: Friend, I am not being unfair to you. Didn’t you agree to work for a denarius? I want to give the man who was hired last the same as I gave you. Don’t I have the right to do what I want with my own money? Or are you envious because I am generous?
JESUS: So the last will be first, and the first will be last.

Comparisons and silver content of a silver denarius

Flavia Domitilla, wife of Vespasian and mother of Titus and Domitian.

It is problematic to give even rough comparative values for money from before the 20th century, as the range of products and services available for purchase was very different. The coin's purchasing power in terms of bread in the first century AD has been estimated as equivalent to US$21 in 2005. Classical historians often say that in the late Roman Republic and early Roman Empire the daily wage for an unskilled laborer and common soldier was 1 denarius (with no tax deductions) or about US$20 in bread[citation needed]. By comparison, a laborer earning the minimum wage in the United States makes US$58 for an 8-hour day, before taxes. The silver content of the denarius under the Roman Empire was about 50 grains, or 110 troy ounce. In June 6 2011, this corresponded to approximately US$3.62 in value if the silver were 0.999 pure (which it wasn't).[citation needed]

The fineness of the silver content varied with political and economic circumstances. By the reign of Gallienus, the antoninianus was a copper coin with a thin silver wash.[10]

s1lverbullet's picture

As always...

Thanks for you excellent analysis TF!  Silver and gold both looked like they were going to shatter resistance at 1750 and 34.50 this morning until the banking cartel stepped in and smashed both of them.  As long as we hold 34 and 1735-1740 today though I will be happy.  We need to hold these levels consistently to finish the week though.  If we do I will be extremely happy. 

boatman's picture

everybody gets to post "first"....or 'second' once

but just once.......after that its......its......

hell i did it at dan's once just for fun.

but i will not do it again.

Double Bogey's picture

Eric O

Bacon milkshakes now available at Jack in the Box

Pax Argentum's picture

Ask yourself...

"Have the fundamentals changed, or are we simply on the same timeline to currency devaluation and hyper-inflation?"

-TF

Sometimes I get so focused on the daily, hourly. minute by minute ups and downs that I lose sight of the big picture.

I'm not a futures trader, but I find the study interesting and I believe it sheds light on how the powerful forces that control our 'markets' think and do battle. Information is priceless in these days of controlled media, controlled thought, MOPE, disinformation and extreme spin.

TF is giving us all, free of charge, TOOLS that we can use to better prepare ourselves for the coming storm. If you are simply playing the banker's game and trying to build a paper stack of fiat, you are missing the point.

Sure, make some fiat if you can, but make sure you've taken care of the essentials first. Water, food, community and security. Turn that stack of paper into something useful. Do it sooner rather than later because you are running out of time.

Pax

Feed the Turd.

Senseosensei's picture

Eric Sprott interview

with Financial sense news hour.

http://ericsprott.blogspot.com/

jss_NY's picture

Monkey sharp shooter

Eric Original's picture

Double Bogey

Yeah!  Were you watching that spot they just did on CNBC?  Me too!  Bacon is taking over the world!

http://www.myfoxphoenix.com/dpps/entertainment/jack-in-the-box-fast-food-chain-offers-bacon-milkshake-dpgoh-20120208-fc_17753639

Double Bogey's picture

More for Eric O

CNBS just had a list of gifts you can put on your want list.

Bacon Martini

Bacon Floss

Bacon Cologne

Chocolate Covered Bacon

Bacon Jam

Bacon Soap

Eric Original's picture

Sadly

Sadly for me, my nearest Jack in the Box is a good day's drive away...crying

lairdwd's picture

bull trap

COT doesn't lie. The cartel wants it lower. What the cartel wants, the cartel gets. 

GoldMania3000's picture

My Analysis

I still think there will be a deep penetration into the gold arena with a potential for some very hard upward thrust gyrations.  Once this cycle is complete we could get a horizontal movement over a little time before the upward penetration resumes.  

Things could move into a traditional 69 type of activity with silver on top for a while and gold suc-"cumbs" to the bears. With silver on top and it's violent nature it could get a little "bloody"...You must be prepared for anything.  I'm hoping that silver stays on the bottom for a little longer before it goes violently on top.  Will see, anything could happen, I'd like to see the 69 activity move toward a more traditional "head and shoulders" or even "head and bottom" action.  That's the type of activity that makes me feel comfortable and would allow for a more sturdy/longer-staying power. 

I hope the explosion holds off, but when it does occur I hope its prolonged. 

How's that for analysis.  

RIP George Carlinsmiley

Dr G's picture

Nice silver Crimex takedown

Nice silver Crimex takedown for 50 cents. Looks like they are trying to paint it red for the day.

Be Prepared's picture

Release the Monkeys

jmmergott's picture

Turd, What makes you think we break higher?

Not that I don't think we could, but let's consider,  We are up $230 from the low, momentum is stalling as they continue to cap 1750,  you said the COT report sucked.  From the technical aspect I see a more likely break down to 1675 possibly 1650, than a challenge of 1800 now.  I just think we need to come back, consolidate, gather some energy and start a new move up from a higher base.  Also, if the Miners are any indicator they haven't done spectacular the last couple days.  That's my 2 cents..

JoeKa's picture

@GoldMania3000

By any chance, are you actually this guy??

goldmember.jpg

And if you are, do you mind autographing my crotch?

Crochet I mean.

lairdwd's picture

Cartel can't even wait for correlated trades to take a dive

They can't even wait for the Euro to fall 15 pips before hammering it down. Compare that to a rise of 150 pips yesterday barely moving the needle - silver was flat most of the day until it finally caught a bid. The cartel wants it lower. We're going lower .

They are springing up bull traps left and right. Be careful here. 

Colonel Angus's picture

Serious monkey question

Why is it that we call the EEs minions monkeys? Does it go back to the real meaning of the Wizard of Oz and who the flying monkeys serve? Is it just because we believe these kinds of people are the types who would fling their own feces? Or is it all this and more? I just don't know the etymology....

thesandbox's picture

Tradition....

Never have...probably never will but some things just become tradition and Ed was the only talking Horse I know of.

Aleph0's picture

Negative Interest Rates ?

There's more and more talk recently about all this .

I remember the Japanese CB was talking a few years ago about the same , as well as :

# banning cash
# plastic only
# I didn't hear about banning "stores of value" like PMs etc., but if they ban cash , banning PMs would be the logical next step ... or simply taxing PM "profits" heavily  ( although these are NOT really "profits" at all of course )

Bottom line :
I am not concerned about the (paper) price of Gold or Silver ... I am more concerned about what dirty tricks the Govt./CBs have in store next .... like the above !

What's your take Turd ?
TIA

PS:
Some links :

Treasury may let investors pay to lend to U.S. government
http://www.reuters.com/article/2012/02/01/us-usa-debt-refunding-idUSTRE81023720120201

GOLD WILL RISE TO $1,250 IF EURO ZONE ENDS, enlightenedECONOMISTenlightened SAYS
http://www.zerohedge.com/news/bloomberg-headline-day

"Supercommittee That Runs America" Urges End To The "Zero Bound", Demands Issuance Of Negative Yield Bonds
http://www.zerohedge.com/news/supercommittee-runs-america-urges-end-zero-bound-demands-issuance-negative-yield-bonds

Continuing Negative Real Interest Rates Sees Gold Rise Above $1,700/oz
http://www.zerohedge.com/news/continuing-negative-real-interest-rates-sees-gold-rise-above-1700oz

JoeKa's picture

answer to serious monkey question

Well. We called the crimex algo office.

Guess who picked up?

secretary_monkey_on_the_phone.png

and then we asked (monkey muttered): who's manning your trading desk?

the reply?

monkey-computer.jpg

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