Updated Gold and Silver Charts

As you might imagine, yesterday's action has changed the complexion of the charts just a bit so I figured we should spend some time today trying to figure where we are going from here.

First of all, the FB/Ag contest is already over. I know of at least one winner, "thesandbox". Did anyone else have 6/1/12? At any rate, Mr. SandBox needs to email me his shipping info so that I can send off his new, genuine and authentic TF hat.

Next, if you haven't yet watched all or parts of "Rollover", I suggest you do it soon. The links are all contained within the "sticky" post at the top of the homepage. Santa expanded a little bit on this theme last night. Here's the email he sent out:

My Dear Extended Family,
QE to infinity is for certain. About that there is no question whatsoever. It cannot be avoided.
Operation twist is a damn joke stimulation wise. At this point in time it is a dark joke.
The Fed is playing with something worse than fire. That fire is posted in a video today on www.jsmineset.com. This video references a worldwide financial crisis that if it starts cannot be stopped by any power on the planet.
They are already easing up on the rhetoric. The Fed will downright panic as the world's economies go from slow to dropping out of sight. That is what is on the plate tonight, this night, right here and now.
Safety only exists in gold bullion and in the outrageously depressed good gold shares now shorted out of sight.

Love, Santa

Yikes! Sounds like everything really is as serious as it seems. Perhaps you should read this next: http://www.dailymail.co.uk/news/article-2153324/Markets-facing-rerun-Great-Panic-2008-Head-World-Bank-warns-Europe-heading-danger-zone-bleakest-day-global-economy-year.html And this: http://www.zerohedge.com/news/why-grexit-would-make-lehman-look-childs-play

Regardless, it looks like next week is going to be quite interesting. One item not getting a lot of national attention (yet) is the recall election in Wisconsin on Tuesday. Sort of like the French elections of last month, the vote on Tuesday will be framed as an American referendum on "austerity". Watch this one closely. http://www.nytimes.com/2012/06/01/us/politics/wisconsin-recall-vote-could-foretell-november-election.html

This week's CoT is even more bullish than I had hoped, particularly in gold. Here is a link to the report: http://news.goldseek.com/COT/1338579201.php And here is a C&P of the comments I posted immediately following its release:

Submitted by Turd Ferguson on June 1, 2012 - 2:48pm.
MODERATOR
Granted, we've already worked off some of this. Regardless, nearly historic numbers.
In gold, the Cartel net short ratio fell to 1.76:1. The lowest I've ever seen it. Again, for the sake of comparison, the 4/5/11 net short ratio was 2.64:1 and the 2/28/12 net short ratio was 2.69:1, so the Gold Cartel net short position has now been cut in half from those peaks. Additionally, LargeSpecShorts added 5281 contracts (10%). This is exactly what I've been telling you for weeks and is, in large part, the cause of the explosive rally today.
In silver, the Cartel net short fell to 1.31:1 and a total, aggregate number of just 14,334. This likely means that JPM is now under 10,000 in net short. By far, the lowest I've ever seen. For the sake of comparison, the 4/5/11 ratio was 2.69:1 and the 2/28/12 ratio was 2.32:1. This means that the net short ratio of The Silver Cartel has been trimmed by 75% since 2/28/12. Additionally, the total long position of The Cartel is 45,817 contracts. On 4/5/11, it was 33,413 and on 2/28/12 it was 33,802. So, the total Cartel long position is up almost 36% in just 3 months. Large specs went short silver, too. Spec longs shed 1519 and spec shorts added 720. Ooops. Dummies.
All in all, another great CoT.

I want to draw your attention to the underlined part of the commentary as I have not heard anyone else mention this yet. Recall that on 2/28/12, silver was winning The Battle Royale and breaking out. Despite the announcement of LTRO2 the next day, the metals were smashed lower and the bottom to this latest manipulation has only recently been found. On the 2/28/12 CoT, the net short ratio of The Silver Cartel was 2.32:1. As of last Tuesday, their net short ratio was just 1.31:1. This is a reduction of over 75%!!! Claim what you want about fair and free markets and no manipulation. If you do so, you are a fool. This entire "episode" was manufactured to allow The Evil Empire to reduce their short position...and it worked!

I'll give you one more. On 4/5/11, just prior to the beginning of The Great EE Panic which led to a near signal failure later that month, the cumulative net short position of the EE was 56,414 contracts, i.e. they were short 89,827 and long 33,413. As of last Tuesday, the cumulative position is just 14,434 contracts as they are currently short 60,151 and long 45,817. Do you see how significant this is? Do you understand now why silver has been mercilessly attacked over the past 13 months?

75% is a huge reduction but they're not net long yet, are they? Perhaps this is why silver is still rangebound between 27 and 29 while gold broke out yesterday? I don't know. We'll get some answers next Friday. Regardless, I think that silver is about to run away from them for reasons they aren't anticipating. If they were smart, The EE would BUY here, cover as many of their remaining shorts as possible and then get out and let silver run free. If they don't, they face disaster. This is your chance, Ms. Masters. I encourage you to act now, before it's too late.

Here are your charts. First, let's look at gold. Here's the long-term, weekly chart:

On the daily chart below, you can see the importance of maintaining a toe-hold above 1610. For the week ahead, let's hope that gold extends its gains on Monday and then survives some attempts to sell it back on Tuesday. After that, let's hope that gold can begin to solidify and base above 1650.

Here is your updated, long-term silver chart. It looks just fine.

As mentioned above, silver remains rangebound on the shorter-term charts. Perhaps The Forces of Darkness will attempt to keep it there while they continue cover and flatten their net position. Perhaps they may not be afforded that opportunity. The next few days will tell us a lot. For now, $29 is our target. After that, $30.

OK, that's all for today. Remember that London is closed on both Monday and Tuesday for Her Majesty's "Diamond Jubilee". Not having a physical trade will allow for greater level on shenanigans on the Comex so be prepared for some volatility. Now, go get some R&R. Next week promises to be crazy.

TF

240 Comments

Xty's picture

Stock_Canines

I believe the problem is that the ducks are coming home to roost, and the whole scheme is falling apart.   JP Morgan is being investigated and sued all over the place.  They have been selling silver they do not have, but they need to balance their books and they need to begin to accumulate the silver they are meant to be holding for their clients.  I found this article that almost explained  why they can no longer afford to play this game.  It is certainly ripe with links and details:

JP Morgan Silver Manipulation

Jason Hommel

 | 

Thursday, April 12th
Facebook Twitter Forward Print
 

(And why you need to know why silver is headed up beyond $500/oz.)

Silver Stock Report

Allow me to bring you up to date on what you need to know about JP Morgan's manipulation of the silver market.

It is being exposed, and JP Morgan is failing, and losing money on their scheme.

On April 5th, we were given the gift of JP Morgan's Blythe Masters giving a TV interview on CNBC where she was trying to claim that JP Morgan does not hold any position in the silver market, but rather, is hedging client long positions in silver.

Blythe says, "We store significant amounts of commodities, for instance silver, on behalf of customers. We operate vaults in New York City, in Singapore and in London. Often when customers have that metal stored in our facilities they hedge it on a forward basis through JPMorgan, which in turn hedges in the commodities market," she said.

"If you see only the hedges and our activity in the futures market but you aren't aware of the underlying client position that we're hedging, then it would suggest inaccurately that we're running a large directional position," she added. "In fact that's not the case at all. We have offsetting positions. We have no stake in whether prices rise or decline."

The article and TV interview are here:
JPMorgan Not Speculating on Commodities: Blythe Masters
http://www.cnbc.com/id/46969993

Note the phrase: "the underlying client position that we're hedging."

Excuse me, my instinct tells me that clients don't want their long silver positions hedged, or sold short. Why would a client with a long silver position want the bank to create an offsetting short position for the client? If you buy stock or shares in a company, do you want your brokerage firm to short the company you just bought to "protect" you from upside gains? This explanation makes no sense. A client with such a long and short position would also have to pay storage fees on the long silver position, and then lose all of any upside gains due to the short position. It makes no sense, in the way that Blythe is trying to get us to understand the words she is using.

As I understand things, JP Morgan (and many other banks, but mostly JP Morgan) has many clients who want to be long silver, in the OTC or "Over The Counter" market and LBMA market, up to perhaps $100 billion to $200 billion worth of "silver" in "accounts".

...

http://www.silverseek.com/article/jp-morgan-silver-manipulation

koan's picture

canines

First off - in no way saying I'm smarter! But I'll throw in my 2c regarding what Byzantium asked (was the first thought that crossed my mind too).

All I've to offer is you have to assume JPM aren't willing to go down with the short silver boat and they know the northerly trajectory is unavoidable even with their apparent unlimited paper and imminent with QE looming ever closer?

But also would love to hear from Turd and others with more to offer.

EDIT: Yeah, pretty much what they said ;)

TomMack's picture

@jgalt

i like the liter/decimal pt comparison.  in the US i'm a $/bbl or gallon guy.  i am not involved with the retail price but i use front month futures settle +around $0.50 to $0.60/g so that would be about $3.15/g in the US.  right now we are about $3.40 so there is a way to go.  

PS they make almost all the money in the C-stores

Byzantium's picture

Cartel intentions

Thank you Stock_Canines, I was starting to feel a bit lonely here.

I just want to add to that, an assertion made by Jim Willie (one of my favourite bloggers) in his recent podcast here, that since the Feb 29 smackdown (I think since then?) that the LBMA has lost 5000 tonnes of physical to buyers. Not only that, but that they are short 20,000 tonnes of 'allocated' physical for their gullible customers.

If this 5,000 tonne figure is true, (big if), then it needs to be seen in light of this context; that the central banks of the world are deemed to hold only 30,000 tonnes of the 170,000 tonnes of gold said to exist. Of that 30,000, 8,000 is purportedly in fort knox (ha-ha, sure). The remaining 22,000 tonnes, is not all ascribed to the western cartel, but 5,000 just came from this 22,000 figure.

So, if true, then the last three months are simply extraordinary. I trust Jim's integrity, but the 5,000 figure cannot be correct.

If it is correct, then as far as I am concerned, it can only mean the following; that the western cartel, have simply no intention of allowing gold to reclaim its monetary role. Why would they be throwing their own life-boat overboard? The implication is that they will defraud cash from the rest of the world, till a default is forced, then laugh all the way to the bank, AND that they have a plan to sabotage any global move to gold. (Or will they confiscate it all back from their own citizens? It wouldn't be enough though...)

This is desperate, epic stuff, but it is all conjecture.  But my view is clear; if they are selling the physical, then they will have no compunction at all in creating fresh shorts on the comex; without limit! If nothing can stop that scam, they'll keep shorting to 1,000 yrs worth of global production if necessary. I guess I am in some respects, with Tmosely on this one. If the comex price rises, it is because they want it to. They figured out from day one how price behaviour affects demand. A rising price increases demand, too low also increases demand. But a gently downward sloping trend, replete with bull and bear traps along the way, but with lower lows and lower highs, seems to be the optimum depressant of demand. And that's what we've had this last year.

5,000 tonnes suggests we are near end game (and that is indeed Jim's point), but like I said above, the western cartel in this scenario, is not behaving rationally. What is it that we are not seeing?

realitybiter's picture

Stewart Smalley

1)  JPM - which is the cartel - is clearly on the ropes.  "Oh, THAT $600 million.  shit, I am so sorry, here, please, of course I was going to return it, MF Global clients....heavens no, it is not mine....hmmmm......how DID it get here?   I am so sorry......"

2)  $2B, 3B, 7B, a shitpile.  In the parlance of Les Grossman, they "shit the moneybed pal."

http://www.hark.com/clips/nvynvtlzyq-this-is-your-fault-you-limey-fuck    (sorry for the f-bomb, but Tom Cruise is priceless)

Look at the US bank stocks.  They are trading as bad as 2008, only starting from lower highs....their moneybed is on fire.

I think that Jim Willie is on to something.  I think that these miserable, conspiring, market rigging POS tyrants, whom all should seriously be brought to justice for destroying the cornerstone of our Country, have spent their magazines, have reached into their mag holder and found nothing, and are now throwing stones, soon to be double tapped- (naw, I say torture them for a few days....Ghengis Kahn style).  

Watch their stock prices, this tells all.

Watch the JPM to Gold ratio....it looks like either 2004 or early 2009 to me, right before a massive rise in gold....it is a beautiful chart..

Again, if you bank at Chase, you are as vulnerable as Lind Waldock customers.  That miserable POS Dimon will simply reach across the desk and pull out your cash from the till, then make you sue and sometime in 2020 some POS judge will return your money (of course, at a revaluation-1/10th)...

BTW, I am holding JPM short, enough to repay me, should they go BK and I cannot get the remaining money they owe me from MF.....its possible...

Argentina denied devaluation the week before in 2001, too....then, boom....its gone.  What is it, no story is true until it is officially denied.....devaluation imminent....

It is shameful how not one democrat Congressperson has signed the letter to our AG to try MF Global.  Not one.  Of course, the R's are using it for political fodder, BUT whatever happened to "bearing false witness"?

Do these guys not have any farmers as constituents?

Crisis always lopes along, then accelerates.  The loping lulls you to sleep, failing to prepare for the acceleration.  "This is such a pleasant creek we are paddling down........"    Then the current picks up right before the waterfall...you have about 2 seconds to respond before it is too late....and then the plunge.

Bix Weir seems nuts to me, but maybe he is right.  What if we shit the moneybed?  before the Summer is over....Obama will look like a total incompetent and Romney will be stuck with his commitment to the thieves that created the mess....leaving just one choice....the guy who predicted it....

I just hope the dopes that drank the BO Koolaid, change....Of course the McCain choice was wrong....so is the Romney choice.  If we don't ditch the entire R and D paradigm, nothing will change.  Libertarian  is the only solution to our problem.  

Byzantium's picture

And just to add, almost the

And just to add, almost the entire goldbug commentator community (Sprott / Embry / Turk / even our own Turd) have had their reputations subjected to a white knuckle ride this last year; ostensibly due to the blatant audacity of the cartel, but lets be clear, allied to that audacity is their criminal capability!

This has made the commentator community (with whom I am aligned and who to me are heroes, lets be clear!), vulnerable to attack and ridicule. KWN is now among many people, a laughing stock. I still read everything on KWN, but for spiritual uplift, not for timing investment decisions.

JPM has achieved all their silver-price objectives, made money along the way, killed sentiment, while covering nearly all their shorts. Their capacity to short, is their ammo. They are fully stocked up with bullets, and are ready for round two.

I want this view to be wrong, but I have yet to be shown that it is wrong. Yes the fundamentals; where were those fundamentals to help us this past year?

I am positioned to profit from a PM explosion upwards, but also to survive them crashing. I advise all to do the same.

realitybiter's picture

Byzantium

History is not on the side of the "cartel"

A corrupt power from yesterday, stealing and bullying, with hubris, has ALWAYS failed to see tomorrow.  I think it is very, very wrong to assume that they are omnipotent and capable of not making fatal mistakes.  Every great power goes down the same way. Arrogant over reach...

Rome is still a nice place to visit and get a great meal....but it aint no world power..

I am just glad the US has big oceans around it.

It takes a lot of dough to buy all that gold.  We don't know who those buyers are.  We know some....Ray Dalio.  Kyle Bass.  Einhorn...I think there are probably some deep pocketed Americans who can't stand the Blankfeins, Dimons, Rubins, etc and are preparing for the aftermath and the new banking paradigm.....after the Nuremberg trials....

balz's picture

@Byzantium

Two things :

1) I agree with you that the Cartel may be looking to add new shorts. Turd belives it wants to get out of their shorts. I don't agree. That would indicate that the Cartel exists to make money on gold and silver. It's false. It exists to make money on everything else. Its only goal is to depress gold and silver price and now they can do it again.

2) I disagree about the Cartel been able to short the market forever. As long as there is physical demand, the Cartel must let gold and silver price raise a bit. If not, then there will be no gold and silver left. This is exactly what happened in the 60s with London Pool, but eventually it failed.

So, if physical demand is stronger and stronger, maybe they won't be able to short this time.

Pining 4 the Fjords's picture

Byzantium

The hole, to me, in your thesis that JPM et al is simply getting ready to deploy a new round of shorts is that they appear to be adding fresh longs too, not just covering old shorts.  If the plan was a new wave of fresh shorts to crash price again, why add new longs that you know will be crushed?

Appreciate the calmly worded well reasoned dissenting opinion, though- thanks!

Xty's picture

Byzantium

but there is something that can stop the scam - reality.  The cartel is falling apart - though I would rather just deal with JPM specifically.  They will not be able to sell silver short when they are bankrupt, and bankruptcy is coming.  The attempt to dampen the volatility in a system that has been increasing in instability for, let us say, 100 years (give or take a few, but the birth of the Fed is as good a place as any to mark the beginning of the demise of the purchasing power of the USD) will fail, and it will fail spectacularly.

Byzantium's picture

To realitybiter

The cartel is not Rome, this cartel have nuclear weapons. 

The US armed forces are the military arm of Wall St.

I heard it in hundreds of blogs / places, and I believe it.

Only a revolution in the US could change that. But the ruling clique have prepared too for that, have they not? 

Byzantium's picture

To XTY

we are on the same side. But what we face is formidable. Do not write them off lightly. Bloodless revolutions are nice, this one won't be bloodless. And it isn't near. Away from this blog, look at your fellow citizens, they are all doped up.

Byzantium's picture

to pining

thanks for your question. 

Based on the premise that JPM control the price, the price is therefore what they want it to be. They use a blend of shorts and longs to fine-tune their aims. If they had more longs than shorts, then they could still injure the price by reducing their longs, and still being net long. Can you imagine then, any regulatory body, taking action against a body for downward manipulation, if that body is net long? They are clever.

Not that they fear regulatory bodies; but public opinion might be important from time to time.

Byzantium's picture

To balz

I categorically agree with you on the first point.

PMs are their kryptonite. Honest money is an anathema to maggots, weasels and thieves.

Xty's picture

Byzantium

sorry if I seem antagonistic - I hope it is just the terseness of the internet.

You write as though you think JPM is invulnerable - do you not think they are going down?  How long do you think they can just carry on?  I give them a year max.

Oh, and there are no sides, per se, unless the argument is about whether or not gold and silver are money.  There a pirate has no doubts.

Gramp's picture

and there it is... the same

and there it is...

the same DEAD end conclusion that i reach when pondering end games...

ClinkinKY's picture

Screw gold and silver, I'm now stacking...

..."thingamajigs".

Byzantium's picture

Hi Xty

I didn't take your post to me as antagonistic, maybe I seem a little fervent because of my sloppy writing style, or maybe I seem curt because I try to keep my posts brief.

There have been concerted efforts to demoralise / antagonise / undermine the goldbug movement recently. I am solidly with the goldbugs, but many criticisms against us are valid. Not least, is that of excessive optimism.

I do not think that JPM are invulnerable. I despise them and look forward to their swift demise.

My point in a different analogy is this; a wounded beast is still dangerous. Not only that, but victory is often snatched from the jaws of defeat. The 'good-guys' here, are reliant on China / Russia to save the day. The domestic gold-bug front has no real power or presence, and face an entire system operating as one coordinated organism.

We can't do much except position ourselves for economic meltdown.

Hopefully, a meltdown will force changes for the good; but believe me, there is no reason to expect that. The bad guys might end up even more powerful, domestically. China & Russia are not going to cleanse the UK & US of corruption, so who is going to do it?

Xty's picture

re thingamajigs

I am worried that there are clearly zombies behind Obama - especially the 'woman' on the lower left.  Things could be worse than even IRB thinks.

Xty's picture

Byzantium

I take your general point, but I do think it is possible to try and analyze what might happen to the price of silver on the Comex given what we can see, especially of JP Morgan's position over the year.  I agree with TF that the tide is turning and that the game cannot continue in this same way much longer.  But I don't think people need to be warned, rather frequently, that there might be further downturns in price.  After the past year, nobody could be so unaware.  And where have you seen these alarming signs of excessive optimism?

I also do have to take exception to the notion that we are powerless.  This idea is pernicious and demoralizing - I am not powerless because I am still free.  The less one participates in their schemes, the freer one becomes.  Convincing the 'goldbug movement' (as you term it) that they have "no real power or presence" certainly fits a demoralizing pattern.  Real money gives people real power.

DBean's picture

We are far less powerless

than ever before. The internet and being able to easily connect to like-minded people gives that one person in a group that sees things a little different the knowledge, the power, the backbone, the courage....to keep making quiet waves. It bothers me that they're called prols, sheeple, and goldbugs....they just may be the quiet start of a powerful wave of change.

Byzantium's picture

Xty

We are not powerless to protect ourselves from the end of the great keynesian experiment; this is where we agree.

We are powerless individually, to reform our respective societies, that was my point. So long the majority public dozes, there will be little change. Those of us who may have succeeded to get friends or colleagues to show interest in PMs, have not necessarily won any hearts and minds given the events of the last year. It seems that honest money is a case of 'he/she who seeks, will find.' I guess that leaves us at around 1%; it isn't enough for a healthy transition. If fiat money collapses this year, western citizens become the new poor, while the East will inherit the Earth. 

That's what really eats me up; from all my trusted circle, I managed to open the eyes of only three people (two of whom were Asian, and an Eastern European, no Brits!); they are only marginally now covered, and did not promote the message any further. The more passion we use in this debate, the more we start to look like the cultists that we are accused of being.

We are though, collectively empowered as the awareness grows, so if others have had a better track record of spreading the word, then all credit to you (but given recent events, it needs to be sold as insurance, never as an investment).

John Galt's picture

Agreed - We Are Not Powerless

To illustrate the point that we're not powerless I've just learned that JPM has agreed to return $600 million of the money absconded from MF Global.

http://gata.org/node/11436

I suspect this has happened because too many people (such as Turd Ferguson, Gerald Celente, Ann Barnhardt, and others) have made too much noise and gotten the attention of too many people who are waking up to what is really going on.

BillAuAg's picture

"Nuts"

In war both sides maneuver to defeat the enemy's WILL to fight.  This has nothing to do with reality; only perception.

It has been shown many times that when the enemy appears invincible, they are near total collapse.  The will of the "goldbugs" is boundless and I would venture to say that every goldbug holds in his posession the means to defend his stash.

Heed the words of Yamamoto when asked if an invasion of the United States might shorten or even end the war.  (I leave this as an exercise by the reader)

BillAuAg's picture

"Powerless"

Powerless is a word used by defeatists.

It is a word used to demoralize and defeat by words alone.

Between men, there are two methods to settle differences.  If you do not know those two methods you are already beaten.

In the case before us we stand with truth while our enemy stands with lies.  And you must chose a side or you will be run over.

Our differences MUST be settled if only for the sake of our children and their children.

God save us.

Chibster's picture

Checkmate! Hyperinflation

Checkmate! Hyperinflation Assured. By Gregory Mannarino.

Published on Jun 2, 2012 by GregVegas5909

"In this video I discuss many pertinent subjects and I go over several very important charts. The global economic situation and market manipulation is out of control."

"Morning Star" chart pattern Euro video 7:24

"Evening Star" chart pattern Dollar video 9:24

Quantitative Easing a certainty, video 10:29, QE1  fail, QE2 fail, Operation Twist failing

Saudi Oil production chart video 13:01  at an all time high

Chibster's picture

Checkmate! Hyperinflation

Checkmate! Hyperinflation Assured. By Gregory Mannarino.

Published on Jun 2, 2012 by GregVegas5909

"In this video I discuss many pertinent subjects and I go over several very important charts. The global economic situation and market manipulation is out of control."

"Morning Star" chart pattern Euro video 7:24

"Evening Star" chart pattern Dollar video 9:24

Quantitative Easing a certainty, video 10:29, QE1  fail, QE2 fail, Operation Twist failing

Saudi Oil production chart video 13:01  at an all time high

Byzantium's picture

To BillAuAg

I just hat-tipped you; I am not trying to erode morale, but harden and bolster it to withstand a psychological war that may go on for longer than we could imagine.

How often did we hear that the comex will collapse? it is still there.

How often did we hear that massive purchases of physical will force the price to moon-shot? Dum de dum, still waiting. Was 5,000 tonnes in 3 months not enough?

I am rock solid in my goldbug mindset, as you are, but stand in a massive battle-field that should be full of my fellow citizens, and it is near empty. If the great re-set comes, don't expect the 99% to laud us as visionaries; we will be the evil speculators. 

Being a goldbug means you certainly need to be strong; by the time this is over, we may at certain times have been everybody's target.

Xty's picture

Byzantium

I will not give up - of course we as individuals can help to reform our respective societies - there is no one but 'us'.   If we despair then what will grow up to replace this malaise?   Speaking truth to power is much more possible than ever before as DBean points out, and who the powerful are is also much more obvious - the common man has always been taught by the elite that they are powerless.  It is indeed part of the psychology of war.

Syndicate contentComments for "Updated Gold and Silver Charts"