Gold and Silver Looking To Bottom Soon
The Turd is back in the saddle and ready for another crazy week.
Whew, did I ever have fun in Friday! Got home Saturday in no shape to post a single thing then decided to simply take the day off yesterday. Let's see...what has happened in my absence?
- We have to start with the exclusion of Iran from the SWIFT system that began on Saturday. Megalomaniacal leaders full of brim and bluster like to spout "this is an act of war" all of the time (think Kim Jong-Il). This exclusion from SWIFT truly is. If there was going to be an "economic sanction" that was going to work, this would be it. Unfortunately, this isn't going to work and it will only serve to speed-up-the-lead-up to war. http://rt.com/news/irans-shift-reaction-gulf-893/
- What the heck is this? CALawyer, if you have a few moments, could you please put this into English for us? I have a feeling I'm not going to like what you report, however. http://www.whitehouse.gov/the-press-office/2012/03/16/executive-order-national-defense-resources-preparedness
- That cute little vixen, Meredith Whitney, is making waves again. There is absolutely no question in my mind that she is 100% correct. This looming municipal funding disaster is all part of the "QE to Infinity" equation. http://www.moneynews.com/StreetTalk/Whitney-muni-Bond-Defaults/2012/03/15/id/432699
- Our pal Jim Quinn has penned another outstanding missive that you should take the time to read. He even concludes it with our favorite two-word sentence. http://www.theburningplatform.com/?p=31461
- And while most everyone was either drinking green beer or watching basketball (or both) on Saturday, ZeroHedge snuck in this little beauty. Reposted here just in case you missed it. http://www.zerohedge.com/news/retail-sells-central-banks-wave-gold-both-hands
So, where does this all leave our precious precious metals. Very close to a bottom I believe. Remember, our new pal "Winston" told us back on Thursday that spot/physical demand is such that we should see a bottom in paper price by early this week. The charts, the lease rates and the OI numbers are starting to bear this out. Let's start with lease rates. I didn't print off a picture to post but you can see them for yourself by clicking this link: http://www.kitco.com/charts/s_leaserates.html . Note that both gold and silver lease rates have turned up rather dramatically and that this usually happens right before or during paper price bottoms.
Next, the OI and CoT numbers. By now, you've probably all seen the latest CoT numbers from Friday. They were kind of a yawner with no significant change. The OI numbers since last Tuesday's cutoff are interesting, though. Back on Wednesday, when gold was off $51 and silver was down $1.40, total OI in both metals fell to levels not seen since 2/17/12 when prices were $1726 and $33.29. This means "Mission Accomplished" for The Cartels. Back on Feb 17, prices had been stuck in a tight range for nearly three weeks as The Cartels were busily supplying paper metal, attempting to cap price. Prices then broke out the next trading day, following the 3-day weekend, and were allowed to rise rather dramatically over the next week and suck in all of the new spec longs that have now been officially fleeced. That we have now completed a "round trip" in both price and OI shows that a bottom is near, too.
How about the charts? Well, silver is showing the first signs of a bottom. Gold, not yet. Let's see how things unfold over the next 24-72 hours before jumping to any conclusions.
So, in the end, we are close...and getting closer...to a bottom for this "manufactured correction". The Turd, having survived 24 hours of debauchery, is back at his post, observing things with a keen (if slightly blurry) eye. Soon, we will likely be able to sound the all clear. Your Watchman will keep you posted.