Mid-Week Gold & Silver Charts

As we barrel toward another fun-filled BLSBS Friday, I thought it was time to contemplate where we've been, where we are and where we're going.

Perhaps you've noticed a clear pattern this week of price suppression.

  1. The obvious manipulative event of Monday where JPM dumped 7500 contracts onto the Comex. This blatant and overt attempt to drive price lower was later written off as a trading error. "Oops. I fat-fingered and entered 7500 instead of 750. My bad." This trimmed $15 from gold just as it was threatening a move to 1680 and, more importantly, made a Comex close over $1672 extremely unlikely. Why was $1672 so important? It would have turned the month of April green on the chart and helped further set the stage for a rally in May.
  2. The less obvious but equally painful hammering of yesterday. After gold had rallied back from Monday's BS and was threatening, once again, to make a run at 1680, gold was struck for another $15 after the first release of a semi-positive economic number in weeks. Gold then struggled all day while stocks and crude oil surged.
  3. Today, gold rallied after the ADP employment survey came in weaker than expected. ADP is often considered somewhat of a precursor for the BLSBS and gold surged back over $1660. What happened next? To the surprise of no one, gold promptly fell another $15.

Does anyone see a pattern here?

But, of course, it is what it is. If you're going to trade/stack gold and silver, you're likely used to this by now. The primary question is: Why? Why three, successive manipulation days on the Monday-Wednesday ahead of BLSBS day? To engineer a lower price ahead of the number? I'll guess we'll know soon enough.

Another question of importance is: How? How is The Cartel still so successful at pulling off these raids? It's simple, actually. They're the only ones left in the pit. Well, them and some robots. Volume is so light and trading is so thin that the primary action in paper metal right now is Cartel manipulation surrounded by HFT WOPRs trolling for stops to game. When there's no depth or "muscle" on the bid side of the trade, it makes The Cartel's job that much easier. I'm not saying that we're going to be stuck here forever, mind you. However, I am saying that patience is going to continue to be required from those trading paper, hoping for another big, sustained move to the upside.

That said, there is some reason for hope. Over the past week, the total open interest in gold appears to have bottomed...at least for now. It banged around for a few days under 400,000 but has since turned and is now comfortably back above 410,000. This interest and willingness to play in the casino is vital for liquidity and liquidity must return for paper gold to surge higher again. Let's watch to see if OI continues to expand in the coming days. IF the BLSBS is metal bullish on Friday, let's look for an accompanying surge in OI as confirmation of trend change.

Lastly and along those lines, this week's CoT promises to be very interesting. For the reporting week, gold rose in price by nearly $20 and total OI rose by nearly 16,000 contracts or over 4%. How that rise in OI is dispersed among market participants will go a long way toward helping determine whether liquidity is returning. In silver, a different picture emerges. For the week, silver was essentially unchanged in price yet total OI fell by 11,500 contracts or 10%! Who was buying and who was selling? How did the net ratios of the specs and the EE change within this 10% drop? Again, the answers will be very interesting.

Here are your charts. Ahead of the BLSBS, I expect tomorrow to be a choppy, rangebound day with most traders unwilling to make a commitment either way. We'll be left with the same nonsense as today where WOPRs bang around, trolling for stops. $1645-50 should continue to provide support in paper gold as there continues to be buying support in physical metal at those levels.

Silver tried to rally and break out above $31.40 after bouncing off of $30 late last week. No such luck. It seems to have pretty solid buying support between $30 and $30.50. Let's hope for a continuance of support at that level as we head toward Friday.

<Having trouble adding charts. Keep checking back. Thank you for your patience.>

TF

195 Comments

alert's picture

First?`

Yes, I"m first.

bellyacre's picture

Dos

Dos on Dos de Mayo

Mantis's picture

Thurd

My highest rank ever ! I feel like first might be in my reach sometime soon

¤'s picture

Fourth / Piece of Pie

Thanks! Appreciate the update as usual.

I think everyone is so sick of the day to day take downs that a nice spikey up day  hopefully is on tap for everyone soon.

The man who stole a leopard's picture

FIRST!!!!11!!!!1

what a business meeting would be if it was a blog...

sixdollarsilver's picture

top 10

yay turd!

enkidu's picture

Bankers blaming bankers?

http://www.telegraph.co.uk/finance/economics/9242016/Sir-Mervyn-King-blasts-banks-for-bringing-UK-to-brink-of-ruin.html

The Governor of the Bank of England has blamed the banks for the recession and stressed that an overhaul of the financial system, including the separation of retail banking from "risky investment banking", was essential "to make our economy safer".

The comments will pile pressure on the Chancellor not to cave into the banking lobby and to press ahead with planned legislation to ringfence retail banking by 2015.

"We don't build nuclear power stations in densely populated areas, nor should we allow essential banking services and risky investment banking activities to be carried out in the same 'too important to fail' bank," Sir Mervyn said on Wednesday. "It is vital that Parliament legislates to enact these proposals sooner rather than later."

He also pledged to crack down on the "vested interests [who] rise up to defend their bonuses and profits".

Sir Mervyn underlined the scale of the financial crisis by claiming that "almost all Britain's banks would have failed had not taxpayer support been extended" to the entire system at the end of 2008, and not just Royal Bank of Scotland and Lloyds Banking Group, the two state-backed lenders.

kingboo's picture

Top 10.........again

i suck

miscreanity's picture

On-Target

Turd, thank you for striking the heart of the issue surrounding the COMEX, et al. You are saying what many are silently thinking. I stopped trading the paper exchanges over a year ago aside from a pittance of play funds for exactly the reasons you outlined above.

Since then, I've moved entirely to trading Bitcoins. There is almost complete transparency, and the well-defined supply allows for accurate movement estimates within the system itself. The derivatives environment is developing, providing stability and opportunity. Lending is also amplifying. There are business models emerging that simply weren't possible with traditional finance.

Bitcoin startup Coinlab lands $500k in VC

We Pay Up To $50 Per Month For Idle Time

There is no cartel that can stuff Bitcoin right now, and the mechanism is not easily overcome. I trust only Bitcoin and physical gold & silver with my stored wealth.

apex101's picture

where are charts?

where are charts?

Dr G's picture

Thanks for the update.

Thanks for the update.

Xty's picture

enkidu

Sir Mervyn underlined the scale of the financial crisis by claiming that "almost all Britain's banks would have failed had not taxpayer support been extended" to the entire system at the end of 2008, and not just Royal Bank of Scotland and Lloyds Banking Group, the two state-backed lenders.

​He then said everything was going to be peachy, because the fundamentals had improved greatly since then ...

enkidu's picture

Honest it gets better

Check out this link for the FULL report from Sir Merv

http://www.telegraph.co.uk/finance/economics/9242245/Sir-Mervyn-Kings-speech-in-full.html

Here's an example...

So how did banks find themselves in such a precarious position? Banks are a vital part of our economy. They run the payment system, allowing us to pay our bills and receive our wages. They finance businesses investing in new ventures and families buying a new home. Without a banking system our economy would grind to a halt. Because of that, markets correctly believed that no government could let a bank fail since that would cause immense disruption to the economy. This meant that large banks in particular benefited from an implicit taxpayer guarantee, enabling them to borrow cheaply to finance their lending. In good times, banks took the benefits for their employees and shareholders, while in bad times the taxpayer bore the costs. For the banks, it was a case of heads I win, tails you - the taxpayer - lose.

This cheap funding fuelled lending. Banks got bigger. In the UK, their balance sheets rose from around one-half to more than five times our national income in less than a generation. As the banks got bigger, so did the implicit subsidy - by the time of the crisis it reached many billions of pounds a year. The bigger banks became, the more they were seen as too important to fail, and the surer markets became that the taxpayer would bail them out. But there are only so many good loans and investments to be made. In order to expand, banks made increasingly risky investments. To make matters worse, they started making huge bets with each other on whether loans that had already been made would be repaid. The seeds of the eventual downfall of the financial system had been sown. As loans and investments went bad, those seeds started to sprout.

GM Jenkins's picture

"Well, them and some

"Well, them and some robots."

Lol. So this is how it ends ...

Here are some charts for those who love charts: http://screwtapefiles.blogspot.com/2012/05/study-in-gold.html

The Body's picture

Bizarre Conversation #2

The Body: “I was just checking out that guy, Turd’s, tits again.  Wow, those tits are in bad shape.  They’re drooping all over the place.  They are extremely unhappy tits.  What should I do?

The Body’s Wife: “Well, is the current established, yet despised medium of exchange in our country US Dollars?”

The Body: “Yes.”

The Body’s Wife: “Have you converted all your excess meaningless mediums of exchange in for real things that have meaning and value?”

The Body: “No.”

The Body’s Wife: “Why not.”

The Body: “Because I am not in a position to abandon the system, as much as I hate it.  I have to have a certain amount of USD on hand to run my daily, Matrix-style life.  The only derivative I use is USD, and only because I am not prepared to abandon the system.  All other conjured financial apparitions - options, swaps, etfs, etc. -  are tools of the kleptocrats.  I will not indulge them.”

The Body’s Wife:  “Since you have some excess USD on hand and have not gone all in, I suggest converting 1/3 of those USDs to hard assets.  If another major dip happens, convert 1/3 of your excess USDs into hard assets.  Be patient and only convert 1/3 at a time so you always have some abhorrent fiat on hand for unexpected drooping tits moments… could you also convert some of that ridiculous funny money into a couple of real, pleasurable, fat NY Strips and 2-25 ounce bottles of Chimay Grand Reserve?  Let’s be as happy as we can be, especially at moments when the tits are in their worst shape.”

Looks like I'll finally be seeing Libertads in person.  Woo hoo. yes

Thanks for the great site and discussions.  I have learned a lot from this place.

Mantis's picture

bitcoins

@miscreanity. I just put an order for some bitcoins myself on Intersango. I'm very bullish bitcoins. Gold and Silver too of course, I've put much more fiat into precious metal than bitcoins so far. But I reckon bitcoins will rival gold in time.

iceman321_2k2's picture

What do Americans Think About Gold?

"According to a recent Gallup poll, gold leads four other types of investments when Americans were asked to pick the best long-term investment. The poll found that 28 percent of Americans view gold as the best investment vehicle for the long-term, compared to 20 percent selecting real estate. Paper assets such as stocks and savings accounts were tied for third place with 19 percent, as bonds finished last with only 8 percent."

"While the Gallup poll findings may raise red flags for contrarian investors, the percentage of Americans that viewed gold as the best investment actually declined 6 percent from last year. Furthermore, what Americans say and do are completely two different things. Gold ownership still remains low by historical standards and according to sales by the United States Mint, there is no rush to buy American Gold Eagles, the most popular bullion coin in the country. In April, the U.S. Mint sold 19,000 American Gold Eagles, the lowest monthly amount since 2008. For the first four months of 2012, the U.S. Mint sold 181,000 Gold Eagles, compared to 358,000 sold in 2011. Furthermore, gold held in the SPDR Gold Trust, the world’s largest gold backed ETF, recently fell to a three month low of 1,274.09 tonnes."

http://wallstcheatsheet.com/stocks/what-do-americans-think-about-gold.html/

bullionguy's picture

Question???

Is there some kind of a Turd Alert System when new articles are posted...or does bellyacre sit around and refresh his screen all day like a loser?

Thanks for the help!

Cobalt Silver's picture

We are not the only ones stacking

Let the games continue.  I suspect every suit on Wall St. is buying physical under the radar.  Loyalty and truthfulness are not their strong points if you know what I mean.  The average money handler can see what most Central Banks and Eastern Investors are doing.  Common sense for anyone in the know is to load up.  The longer the precious remains artificially low the more those who are awake can stack.  Simple as that.  Go with the flow.  

As I look back at $5 silver and $250 gold it sounds like a fairy tale.  Long long ago and far far away but I still have some socks from those years!  Time flies my friends.  2020 will be here soon and I will no doubt still have socks that are new today.  $31 and $1650 will be but a nostalgic memory.

Quixote2's picture

Converting gold to silver

Today I converted some CEF (50 oz Ag/1 oz Au) to PSLV (all Ag).

Physical is 94% Ag.

California Lawyer's picture

Stolen Leopard

That was the funniest thing I have seen in weeks.  I am still laughing.  Seriously.  Thank you for sharing.  That would have been a great post for the last blog by the way.  Awesome!

I Run Bartertown's picture

Tired of waiting

I'm about to order one of these:

That's a pretty leaf. The old lady on the front is unfortunate-looking.

I wanted one of these:

The Aussies at least seem to doll the old broad up a bit. They were out of stock because people bought the pretty gold first. Which begs the question: How many more would they sell if they'd put the Leaf on one side and the Moose on the other?

Should I wait for Fri AM on the theory that they'll beat it down at least until the jobs propaganda is released? And my apologies if I offended English Bob.

dropout's picture

Margin Doubles for "Non-Hedge's" by Monday

Trader Dan has a blurb up on his blog, about the CME requiring all member firms to conform to the new Dodd-Frank regulations by this coming Monday. Effectively doubling margins.

As trader Dan says he "sees only two things wrong with Dodd-Frank ~ Dodd and Frank!"

Priceless.

Exbroker's picture

The fed

The Fed is going to fight the development of the inverse head and shoulder bottom with everything they have. Otherwise they are looking at 40 bucks in Silver. 

Exbroker's picture

Bob will get over it

He's used to seeing ugly English chicks. surprise

dropout's picture

Hunter ~ Biderman Talk

Greg Hunter of USA Watchdog talks with Charles Biderman of Trim Tabs.

Excellent info.

http://usawatchdog.com/charles-biderman-eu-debt-crises-going-to-get-worse/#more-7873 

Bugzy's picture

link not working

response out looking in

Edit: Click home link at top left - goes to stories.

rocoach's picture

English chicks

May be ugly, but they sure are lots of fun

kn33bar's picture

Another new metal exchange starting May 8th

SINGAPORE: The Singapore Mercantile Exchange (SMX) has said it will be launching new gold and silver futures contracts with effect from May 8.

http://www.brotherjohnf.com/28623/

Troll's should be banned. Precious metals  get enough bashing from the mainstream media and financial sites.

There is plenty of room at the SLV message board for trolls.

dropout's picture

More Excellent Info

Mike "Mish" Shedlock was Lauren Lyster's guest on the Capital Account program. Despite the shortness of Lauren's dress, the info presented is excellent.

http://globaleconomicanalysis.blogspot.ca/  

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