In a stunning development, gold and silver sold off today...just like last Tuesday, and the Tuesday before that, and the Tuesday before that, and the Tuesday before that. In all, that's five consecutive Tuesdays where price has fallen. Hmmmm. Why would that be?
Of course, regular readers and longtime Turdites know why. Tuesday is the day of the Commitment of Traders survey and, as we all know, great care must be taken to "paint" the CoT.
In the past, when The Cartel were active sellers, we referred to these days as "Happy Tuesday". After selling short all week, The Cartel would buy on Tuesday to "cover their tracks" ahead of the CoT survey. This resulted in UP days. Now, however, things have reversed. As I've mentioned here repeatedly, The Cartel is now actively covering shorts (buying) all week. Therefore, the attempt to "cover tracks" for the CoT survey now involves selling, not buying, and now Tuesdays are not so happy.
Regardless, in the grand scheme, this really doesn't mean much. In the end, both Cartels are still at work transferring risk from themselves to the specs (mgd money, hedge funds, etc). The Cartels are not quite net long but their net short positions have been dramatically curtailed. Expect this to continue (if they know what's good for them). In his latest newsletter, Uncle Ted estimated that JPM's net short position in silver is now down to near 10,000 contracts. This is a 75% drop from its peak. Many expect JPM to simply add shorts back on when price reverses. This time, I don't think they will. I've done a lot of homework and talked to a lot of people and this is what I believe. We'll just have to wait and see what happens.
In the short term, today's beatdown was insignificant. Gold shed almost $20 in the final 20 minutes of trading, losing $9 right before the bell. Ho-hum. We've seen it all before. Silver, of course, sold off in sympathy. Whatever. Let's see what happens tomorrow.
Here are some interesting items that I picked up along the way today. First up, some good news for the "Re-Elect The Great Leader" campaign. Remember, anyone that falls off of employment "insurance" is no longer even counted by the BLS. That person just disappears and is no longer part of the workforce. Therefore, less people "collecting unemployment" means that the unemployment rate will go down! Hooray! All our problems are solved! Vote to re-elect The Dear Leader! ( http://finance.yahoo.com/news/u-winds-down-longer-benefits-152809517.html)
But don't look now, the MENA is about to get more unsettled, if this Debka article is to be believed. Russia backing away from Syria would likely allow overt support of the "rebels" to begin. Remember, Syria is pals with Iran, Hezbollah and the like and any moves against them will inflame the entire region. Uh-oh. ( http://www.debka.com/article/22038/Russian-arms-ship-turned-away-from-Syria-President-Putin’s-first-misstep-)
And then you must read this. Not one of our usual sources but maybe it should be. Making gold a "Tier 1 Asset" would be a very good idea and a really big deal. Please read ( http://www.sharpspixley.com/comment/ross-norman-the-next-big-thing-in-gold-possible-purchase-of-1700-tonnes-gold/122544)
OK, that's all for now. Let's see if gold can hold and gain overnight and establish a third, consecutive higher low within the range. More on Wednesday. TF