Saturday Gold and Silver Summary

I've found a couple of things for your weekend, so I thought it best to start this new thread. Mainly, I had to make sure that everyone saw the latest OI numbers and CoT report.

First of all, you don't have to wait for me. If you want to get this info for yourself, just save these links to your "favorites". The daily OI numbers are usually released by about 2:30 p.m. EDT and the CoTs come out every Friday at around 3:00 p.m. EDT.

http://www.cmegroup.com/trading/metals/precious/gold_quotes_settlements_futures.html

http://news.goldseek.com/COT/1332531154.php

Both the OI numbers from yesterday and the CoT were exactly what I was hoping for. I posted comments with analysis into the previous thread but I wanted to ensure that as many of you saw it as possible, so I am copy-and-pasting both comments below. It is important to keep in mind the limitations of these reports. They are not necessarily forward-looking in that both are already dated by the time they are released. Therefore, they should be treated more like "forensic evidence" of current and past Cartel activity. For example, it is very difficult to use CoT data exclusively to identify potential tops as the capacity to absorb spec longs is nearly unlimited. The Cartels could go to 4:1 net short or 5:1 net short on the backs of Fed-supplied cash and the established practice of fractional bullion banking. That said for 2012 we will, however, use the net short ratios of late February as benchmarks for possible Cartel limitations. As for calling bottoms, the data is more helpful. Bottoms form over a much longer time period than tops and price declines tend to bottom in the general area where Cartel net short ratios reached 2:1.

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Submitted by Turd Ferguson on March 23, 2012 - 2:39pm
Perfect, 100%-predictable OI moves yesterday.
Recall that I began feeling yesterday that the decline we saw yesterday morning was "it", the final low, at least for gold. Gold rallied in the late morning yesterday and closed the Comex down $7.70. I expected the OI to decline marginally as this has been the trend in this "correction". The numbers are in and the OI did decline marginally, falling back under 432,000 and a near double-bottom in OI with Tuesday's number, which coincides with a near double-bottom in price. With the rally today that continues this afternoon, chances are very high that I will be proven correct in this latest "Turd's Bottom" for gold.
Silver also acted as expected yesterday. Recall that, on Tuesday, silver declined $1.12 but total OI surged by over 3,000 contracts. I surmised at the time this was indicative of spec shorts being added at the bottom...shorts that will soon be fleeced by the EE with a sharp move to the upside. I was curious to see if OI rose again yesterday because, as you know,  silver declined by $0.88 yesterday on the Comex session. Well, whaddayaknow? Total OI rose by 1,400 contracts yesterday during the near $1 selloff. I have deep faith that this was the final suck-in of extra spec shorts before the bottom, just like 2/28 was the final suck-in of the spec longs before the beatdown. For further evidence, as of yesterday the total silver OI is now 5,500 contracts higher than it was on 3/15/12 yet price is $1.38 lower.
Once again, this helps to complete the bottom picture. Spec longs have been wrung out of gold as total OI has now "double-bottomed" below 431,000...an OI level we last saw on Valentine's Day when price was $1718. Spec longs have been driven out of silver, too, and importantly, fresh spec shorts have now been driven in as total silver is already 5,500 contracts off of its "correction lows".

Submitted by Turd Ferguson on March 23, 2012 - 3:21pm.
WOW WOW WOW!!! I LOVE THE CoT REPORT!!!
GOLD
Exactly what I was hoping for! The large specs longs shed 15,468 or another 6% while large spec shorts grew by 3,975 or, roughly 11%. Beautiful! Even the small specs got in on the action by punting 4,500 longs while adding 1,600 shorts. The all-important Cartel did exactly what I'd hoped---They added 15,424 long (10%) while covering 10,126 (3%) shorts. This means the net short position of The Gold Bullion Banking Cartel shrunk by over 25,000 contracts during the week where price fell nearly $50! The net short ratio is now almost exactly 2:1, down from the 2.7:1 that it reached on 2/28 and is actually a shade lower than where it was on 12/27 when price was $1598. A very, very bullish picture!
SILVER
Like gold, almost perfect! First of all, remember that total OI barely budged over the 3/13-3/20 reporting period, only  falling by about 300 contracts while price fell by nearly $2. Ideally, in this situation the large spec longs would be resolute while, at the same time, the EE shrunk their net short position. Additionally, I had hoped that the bulk of the downside price pressure had come from new large and small spec shorts. THIS IS EXACTLY WHAT HAPPENED! ​While price fell $2, large spec longs actually added 30 contracts. This is what we mean when we say that "silver is in strong hands"! Another good sign is that large spec shorts surged by 17% and small spec longs punted almost 9%. Perfect!! Then...the all-important Evil Empire. The Forces of Darkness added 2,281 longs (+6.45%) while covering 1,224 shorts (1.7%). This is a net change in the overall short position of 3,500 contracts (-9.84%) and brings the net short ratio down to 1.85:1. Again, for reference, the EE net short ratio on 2/28 was 2.32:1 and, on 12/27/11 it was a scant 1.34:1. From a purely CoT perspective, you might conclude that silver still has a little ways to go before reaching the extraordinarily bullish levels of late December. However, you must keep in mind that silver is still $3 higher in price than it was back then, too. Therefore, these silver CoT numbers are perfectly acceptable to those (like me) who are searching for a bottom in the here and now.
In conclusion, I am very, very excited for next week and the weeks ahead. Combining the CoTs with the current OI, then adding in the recent backwardation and and the looks of the charts and other technicals and you get a picture that looks, smells and feels like a significant bottom and "markets" that are poised to rebound very soon.

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Next up are two, very interesting weekly charts. As we search for a bottom, note first that gold actually had an UP week last week. Sure didn't feel like it, though. Also, notice that silver has had 4 straight DOWN weeks. While I admit that my eyesight is experiencing some middle-age "issues", I challenge everyone to inspect the weekly silver chart and find a period over the last 5 years where silver has experienced 5, consecutive DOWN weeks. Personally, I don't see one. This makes it seem like history is on our side next week.

paper_3-24gold.jpgpaper_3-24silv.jpg

Lastly, my friend "Big Red" from Virginia sent me this link earlier this week and I thought I would post it here to begin a discussion. Though, for me, the author lays a bit too much blame at the feet of the O'bottom Regime, he nonetheless does a fine job of detailing the precariousness by which freedom currently hangs. He also correctly identifies the problem as being ultimately caused by all politicians, of both parties. Other than that, it's just some light and happy, weekend reading. <sarc>

OUR COLD CIVIL WAR
By Benjamin Smith
On the heels of NDAA, ObamaCare, Stimulus, Son of Stimulus, Patriot Act, takeover of auto, energy, media and movie industries, and the relentless implementation of Agenda 21... the Obama regime running our country into the ground has issued an updated Executive Order which suggests the probability of impending MARTIAL LAW.
We are left to scratch our heads and ask……… Why now?
The only possible answer is…
America is in fact, right now, in the vicious throes of a Cold Civil War.
Cold as in non-violent and Civil as in nationwide; an attempt to force a new government-controlled ideology upon an unwilling public
.... Read more: http://www.theospark.net/2012/03/our-cold-civil-war.html

That's all for this week. Let's hope and prepare for a turnaround next week, particularly once gold option expiry is behind us. See you Monday.   TF

229 Comments

Animal Sacrifice's picture

First

1st

ACM's picture

I Agree With TF

   GW paved the way for Obongo.  I feel we have had the two worst Presidents in US history back to back.  

   I am also of the opinion that looting on a grand scale by the TBTF got under way with HW and has been the hallmark of these four in a row Ivy League sh..head Presidents.

slacker's picture

a turnaround next week

TURN AROUND by DEVO

Kouen's picture

expecting to see firework

expecting to see firework from here   : )

ChicksDigIt's picture

COT's look good...tungsten filled gold does not

Thanks for the COT update Turd! Lets hope you're right and the bottom's in for silver!

Just saw this report that tungsten filled gold bars have been discovered in the UK!
http://silverdoctors.blogspot.com/2012/03/tungsten-filled-1-kilo-gold-bar.html

This is really big news, and I would think this would have bullish implications for the silver/gold ratio.

El Gordo's picture

Ever wonder about stupid people

Here's a study concerning stupid people.  I'm certain that there is some relevance to current events in there somewhere.

http://cantrip.org/stupidity.html

iceman321_2k2's picture

Nice Summary

http://wallstcheatsheet.com/investing/randgold-highlights-mining-risk-as-turkey-seeks-gold-bullion.html/

However, some governments are trying to change these benefits as an act of financial desperation.  Government officials in Turkey will soon launch an incentive plan for consumers to store their bullion inside the country’s banking system.  The WSJ reports, “The push to tap into the individual gold reserve-the traditional form of savings here- is part of Ankara’s efforts to reduce a finance gap that is currently about 10 percent of gross domestic product.”  The Istanbul Gold Refinery estimates that 5,000 tons of gold may be stored outside of the banking system in Turkey.

Does anyone think other banks, such as in the U.S. could offer interest for gold deposits to lure in customers?

cavalier's picture

GOLD rule of law risk; EXK

GOLD saw the rule of law risk when rebels took over parts of the country. GOLD continued business but the change of government is a big risk. The charts don't predict such an event.
EXK on the other hand is in friendly Mexico, where it is easier and faster to produce silver than in the US.
HL was in my opinion required to shut down its not so lucky mine for longer than it should by the regulators.

So on Monday I'm looking to pick up some EXK.

slacker's picture

Gold really is money around the world...

This bugged out, retired expat living in Chiang Mai, Thailand sees gold shops in every town here...

Thai gold is 23K.

People buy and hold it like "money in the bank" for those living in the fiat bubble of unreality...

http://tastythailand.com/why-do-thais-buy-so-much-gold-and-what-do-they-do-with-it/

Punk-Assets's picture

Very scary on the gold bars.

Very scary on the gold bars. I'll be getting rid of the last bit of bullion I have and going back to $20 liberties and $20 St Gaudens in XF/AU. Thats enough to shake me out of bullion right there.

Mariposa de Oro's picture

to slacker

How is Thailand for Americans?  I'm currently in the Marshall Islands and am exploring other expat options.  I can't stay on this particular island indefinitely and at some point will have to move unless the USA has a USSR type collapse, but even then  maybe have to move anyway.  Is it difficult for expats to get work permits, etc?  Are single women considered 'prey'?

Strongsidejedi's picture

24 hours ago

I posted a video of the rocks showing BEFORE the tsunami wave comes ashore.

I have the distinct feeling that we were watching the waters recede in the past few take downs.

In each instance, over the following few weeks or months, the tidal surge brought gold and silver to the bull market trend line.

They can not excape physics.

Gravity and the laws of physics do not change.

Watch out when the tide comes back in on the PM's.

Strongsidejedi's picture

gold bars

These rumors have been circulating for years.

These rumors have a habit of popping up when the cartel knows that they can not keep the price of gold down.

slacker's picture

The best place in the world...

IMHO, and that of Marc Faber, Chiang Mai, Thailand is the best place in the world to be for "The End of the World"!  I'm here with my whole family.  Life is good.  My daughter is going to Payap University.  I pity the fool who considers her prey!  But really, the crime rate is very low here.  Gold shops are open to the street and a gold robbery is extremely rare, always making the news and tabloids.  Immigration is complicated.  Many jobs are protected, work visas are difficult.  Retirement visa is relatively easy if you are 50 years old and can keep 80,000 Baht in the bank.  Otherwise, consider a one year student visa...  Learn to cook Thai!

http://www.worldtravelattractions.com/10-places-where-you-can-go-if-the-end-of-the-world-is-coming-part-1/

Fr. Bill's picture

Blithering Idiot? Or Shameless Shill?

Over coffee I stumbled on this opinion piece in Financial Times which caused me to stop and stare the way you'd do if you passed a fresh car wreck:

Gold loses lustre in face of US recovery

As this comes from the UK's Financial Times, I thought, “Hmmmm. Oooo-tay. Let's see what the Limey is talking about.”

No thought here, of course, that FT always much less mostly gets it right about anything. But, it's supposed to be an outlet for a certain point of view in the financial press. Organs like CNBC are obviously the clowns in the marketplace. 

But, FT? Clowns? Even Pravda, in its heyday, could be counted on for “integrity” in its points of view, once you knew where they were coming from.

Early in the FT article, comes this jewel of insight:

With the US economy showing signs of recovering and fears about the eurozone sovereign debt crisis easing, investors are putting their money into equities and other assets geared towards economic growth rather than havens such as gold.

Yes, there are media organs that tout a recovery in the US economy, and others which claim (with a straight face, even!) that the eurozone sovereign debt crisis is easing. But FT ?

I'm way past the point where I'd suppose journalism of any stripe can be read without a knowledge of the agenda driving the journalistic enterprise. And, I've also never ever imagined that FT  was in the same journalistic universe as, say, Zero Hedge. But still ... neither did I think FT  lived next door to CNBC!

Sheesh!! This FT column makes me wonder if they've built a covered breezeway between themselves and the CNBC clowns. Maybe FT stands for “Folly Today!!” rather than Financial Times ?

slacker's picture

to Mariposa de Oro

Correction... 800,000 Baht or Just under $27,000

pickaxe's picture

OI & CoT's

Todd, the OI and CoT's may be backwards looking, but they can be good confirmation that your personal market outlook is aligned with what the markets are telling us. So, don't discount market signals, just take with a grain of salt when it looks like all the stars are lining up that Mr. Market may still a few nasty surprises waiting.

With that said, the odds certainly favor having a long position in these hugely oversold PM stocks at this moment in time.

I'm "all in" on the substantial portion of my investment portfolios dedicated to resource equities and will ride out any further market nastiness.

~pickaxe

¤'s picture

Mr. Hyde Thanks You...

Mariposa de Oro's picture

Thanks slacker

I'll be 50 soon.  How much is 80,000 bakt in au?  I'd ask in dollars but I have a feeling that will be a moot question by the time I move, lol.

Edit:  I saw the 800,000 correction.  Looks like I'll have to keep saving for awhile.  Folks in my family live into their 90s, especially my mom's family.  My dad is the only one left in his immediate family but he hits 91 this year!smiley

Depending on how soon I have to move, I'll have to work.  Rules for Americans in these Pacific island nations are pretty accommodating as compared to many other countries.  I must say I'm very partial to them.  I love it here and want to stay.  The third world isn't so bad.

Turd Ferguson's picture

WOW!

MODERATOR

That is amazing. The Docs certainly appear to be onto something big.

And let me state this: I don't personally know The Docs, though they are posters here and I have corresponded with them via email regarding a number of topics. All I can say is that they seem to be regular people, just like the rest of us. Also, they have assured me that their "whistleblower" is, in fact, a real person who does, in fact, work for JPM. Take it for what it's worth and, of course, they may just be fooling all of us. On the internet, how can you ever say for sure? But, like the whistleblower deal, I find it highly likely that this tungsten story is authentic and real.

Dr G's picture

Inflation update: Wifey went

Inflation update:

Wifey went to Costco today for our usual weekly purchases. We have stacks and stacks of toilet paper, but I thought we should buy a little more. Maybe some of you have noticed this, but the Costco toilet paper has a new package. Great! It has wider sheets. Great! The package says it is softer on your bum. Great!

It has 30 rolls instead of 36 that it formerly had. WTH!? By looking at the numerous on the front of it, the old package contained 1900 sq feet of bath tissue. The new package has 1500 sq feet. That's a 20% decrease in product volume.

Of course, the price probably increased, but it has been several months since we purchased it so I don't have any proof of that. Even if the price doesn't increase, that's how inflation gets you. Smaller quantities that many consumers are unlikely to notice or care about.

One of my favorite subjects to harp on with family and friends is how ice cream containers have gotten smaller in the last 5 years. Now I can harp on the Costco toilet paper.

Dr G's picture

@Punk-Assets, I'm assuming

@Punk-Assets, I'm assuming you don't have any 1 Kilo gold bars or 400 oz gold bars (and other massive sizes)? I wouldn't worry at all about 1-5oz gold bars. I do prefer coins myself, but think the smaller bullion bars are a good buy.

The craziest part about the story for me is that the bar in the photos is 1000g, yet it was only underweight by about 2 grams. That's a pretty good fake job.

Turd Ferguson's picture

Be sure to read this

MODERATOR
Plunjer's picture

Jim’s Big Picture:“What’s the Plan If the World Doesn’t End12/21

The last segment, starting at 53 minutes in to the podcast, might be worth your time. Jim's perspective has me thinking about things a little bit differently. 

http://www.financialsense.com/financial-sense-newshour/big-picture/2012/03/24/02/jim-puplava/good-will-spending-closed-for-business

I_ate_the_crow's picture

A little Saturday perspective

A little Saturday perspective for those that like to ponder the big picture......

http://www.thevinnyeastwoodshow.com/uploads/1/3/1/2/1312301/_23_mar_henrik_palmgren_red_ice_radio_vinny_eastwood_show_2012.mp3

Punk-Assets's picture

@ Dr G

I stop at the 10 oz bars but I am very adept at spotting counterfeit $20 gold pieces (only found one really good one so far - most are poorly made). I've handled thousands of them. Not so well versed in 1, 5 or 10 oz bars so my best bet is to get rid of/ exchange the ones I have. And thats exactly what i am going to do. The Asian fakes of everything are getting very, very good (or bad depending on how your view it). My opinion of this issue is that if this bar counterfeiting becomes more widespread the premiums on $20 gold peices are going to rise. I'd be willing to bet money on it. Many numismatists are very good at spotting fake antique coins in varying grades etc but bars and ingots? Thats a whole different animal that I want no part of. 

Xeno's picture

AltX

Can't seem to get around the confluence of various news reports on the web. For instance, the Iran nuke situation where now Iksrael and the US now both agree that Iran's nuke program is NOT for weapons. But hey, Israel still pushes the idea that Iran needs to be attacked probably for their own reasons and the US agrees also but probably for different reasons.

So instead of attacking for no verifiable reason, the US engages in sanctions removing Iran from the SWIFT payment system and extending exceptions to others until June unless they drastically reduce purchases of Iran oil.

Really? The rest of the world, that is any nation not Israel or the US (and to a lesser extent the EU), is supposed to bend over and lay down and put their citizens for whom they are responsible at risk of economic disaster because they depend on Iranian oil? And if they don't they will be cut off from the US banking system?

How stupid is that ultimatum? Imagine the cries in the US when the BRIC's get cut off from the US banking system. Can you say no more cheap imports?

And before you think that the BRIC's would suffer from being cut off from the US banking system, remember what PAGE is all about. Do you really think it's just going to be a platform for fully backed spot trades of precious metals? Or more ideally a platform to trade the metals at an honest value for settlements of international trade?

No wonder Iran is the boogyman. No wonder PAGE was corrupted and delayed. At this point a very large portion of the rest of the world could do just fine not participating in the western based banking system. More power to 'em if they can pull it off.

The west has soooo many weapons it seems the only thing they can shoot with pinpoint accuracy these days are themselves or their citizens in the foot.

Go Obama Go!

Senseosensei's picture

@Fr.Bill

The problem with articles like those is that most of the people reading FT and all those other mainstream media, believe it without a doubt.

Even now, with trillions of debt around the world, nobody in my family, neighborhood, or amongst my friends, even considers gold and silver. If i try to raise the subject i get "the look" and the subject changes to holidays, IPads, cars, etc.

It tells me we have a long, long way to go before a blow off top is even possible in precious metals. 

I truly believe we will have a collapse or world war sooner, than that i see people wake up and act on it.

Btw, talking about war. Lindsey Williams has revised his war dates again. First it was somewhere around january, then march, and now it's "end of 2012". I am going to ignore all these guys from now on, it will happen when it happens (the same goes for PM's, it will happen when it happens).

boatman's picture

i should be

sooo lucky to have to worry for a second about a stack of KILO gold bars being fake

Boswell's picture

Roll Size?

Check the size of the cardboard core it's rolled on, those have been getting bigger too!

Bought some store brand saltine crackers... They were rectangular, not square!

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