Weekend Update

"Jane, you ignorant slut."

Sorry but that just makes me laugh, even to this day. I was probably 12 and, Lord knows, MamaFerg would not have approved of me watching SNL back in those days, at such a tender age. I imagine my brother or brother-in-law kept me up late and let me watch. Didn't even know back then what "slut" meant...just knew that the audience roared with laughter so I laughed along. Now, in the era of 24-hour news cycles where bubbleheads drone on endlessly about topics in which they have no expertise, the line is funny once again. Perhaps now it should be "(insert CNBS or Bloomberg bubblehead here), you ignorant slut".

Moving on. I had intended to type up a full post today discussing the miners but, you know what, that simply takes too much time to do and it's a Saturday and I'd rather do something else. So, we'll save the miners for sometime next week. Suffice it to say, though, I think we've reached the point where those interested in gambling some fiat might begin to dabble. Again, more on that next week.

For today, let's just pick at our bottoms a bit. If you missed it, yesterday's Commitment of Traders report painted another compelling picture. Here's a link to the report: http://news.goldseek.com/COT/1362774776.php And here's a C&P of the immediate analysis I posted yesterday afternoon:

CoT
Submitted by Turd Ferguson on March 8, 2013 - 3:13pm.

Even more bullish than when I typed my somewhat-criticized "BOTTOMBOTTOMSOONSOON" from the CoT review of two weeks ago. Looking even stronger now!

Please open and review this post for context: http://www.tfmetalsreport.com/blog/4492/strange-days-indeed

GOLD

The CoT just keeps getting better and better. For the week, price fell about $40 while total OI was up 728.
The LSpecs dumped 6700 longs and added 2300 new shorts. This brings their net long ratio all the way down to 2.23:1. The SSpecs did the opposite. They added 2400 longs and covered 2800 shorts.
This left The Gold Cartel with only 3800 contracts of wiggle room to decrease their net short position, which they did. They dumped 700 longs and covered 4500 shorts. This brings The Cartel net short ratio down to a very bullish 1.89:1.
Again, for context, at the 8/14/12 price low, the LSpec net long ratio was 3.42:1 and The Cartel net short ratio was 1.98:1. At the price lows of late December 2011, the LSpec net long ratio was 4.57:1 and The Cartel net short ratio was 2.01:1.

Chew on this, too: The gross number of LSpec shorts is now 87,661. On 8/14/12 it was 47,131 and on 12/26/11 it was 36,625. Now 2X the level seen at major, recent bottoms, that's a lot of fuel for a short squeeze!

SILVER

Also extremely bullish. Refer to the "Strange Days" post above for a bunch of historical data. Below I will just show the same dates as the gold analysis.
For the week, price fell about 70¢ but total OI rose by 1,475. The LSpec added 700 longs but also added a whopping 3800 brand new shorts. This brings the LSpec net long ratio down to 1.94:1. Recall that just four weeks ago it was over 6:1! Just as in gold, the SSpecs added 300 longs and covered 1100 shorts.
The silver commercials added 265 shorts to bring their total gross position up to 52,774 and The Silver Cartel covered 1400 shorts, dropping their gross short position down to 81,957. The new commercial net short ratio is a very, very bullish 1.55:1.
Again and for perspective, on 8/14/12 the LSpec net long ratio was 1.93:1 and the commercial net short ratio was 1.49:1. On 12/26/11, the LSpec net long ratio was 1.41:1 and the commercial net short ratio was 1.34:1.
Lastly, at 19,846 the total gross short position of the Large Specs is, by far, the largest number I've ever seen and it dwarfs the 6588 number that we saw just four weeks ago! That's a 3X increase inside of a month! Think these momo-chasing hedgies and HFTs are late-to-the-game and on the wrong side of the trade, about to get a truly religious experience? Me, too.

Now, an important caveat. Always remember and never forget that the CoT is already 72 hours old when we get it and, when taken by itself, is of limited usefulness. However, what does make it helpful is the historical context, given these highly-manipulated and distorted markets. This is why the comparison of The Cartel net short ratios is so important. Note that we are very near or even exceeding the ratio lows of late December 2011 and August 2012. Why is this important? Take a look at these weekly charts and note where price was then and the extent of the rally that followed.

So, what I'm getting at here is that it seems pretty likely, perhaps even "probable" that the metals are putting in at least a short-term bottom here and a rally is coming. The question is: Will the rallies die again at the trendlines or will they extend back toward the tops of the ranges, as they did in February of 2012 and September of 2012? We shall see.

And here are two news articles for you to discuss. Both were emailed to me yesterday by an observant source. First read this: http://www.chinadaily.com.cn/china/2013-03/06/content_16280875.htm No, this is NOT the fully-allocated silver exchange we are all still hoping for. Instead, this major new exchange that will price, fix and trade in competition with London and Comex.

The other item is this: http://www.reuters.com/article/2013/03/08/china-oil-futures-idUSL4N0C013S20130308 Here's the key section of the article for you to consider, with emphasis added:

"The sour crude oil contract could be priced in either the yuan or the U.S. dollar, the SHFE has previously said."

Hmmm. Well that's interesting, isn't it?

Finally, the GLD shed another 3.31 metric tonnes yesterday. This drops it's total to 1,239.74, down from 1,349.92 on 1/2/13. Yes, that's 110 metric tonnes (8+%) (3.5MM ounces) (8,841 London Good Delivery bars) that have been pulled out YTD. The popular bubblehead "analysis" is that this metal has simply been returned to Authorized Participant vaults as "investors" move out of gold. Is that the case? Maybe. I mean seriously, who am I to say? I'm just a dope with a MacBook, banging away in his parents' basement. Of course another scenario is that shares are being redeemed as a simple and easy, convenient source of physical metal and the gold is being shipped to points East, never to return. I guess that, one day in the future, we may finally get some answers. Until then...

I hope that everyone has a safe and relaxing weekend. Get ready for next week and the rest of this month. Fun and interesting times appear right around the corner.

TF

391 Comments

ivars's picture

I added a line on S&P so You

I added a line on S&P so You could see why I think we are entering a non-sustainable bubble phase in S&P right now. It can still go much higher and longer, but the rate of increase will absorb all QE3 and more and than crash IF QE3 is not increased proportionally. Increasing QE3 by buying more debt will move PM up immediately. Increasing by buying  stocks directly- possible but ... Will not look very convincing for stories about companies making profits because of economy:).

Some people who remember me from few years ago know that I am not so bad at predicting bubbles and their crashes, so I will try to do it again:)

(The overlay here is reserve balances at FED=QEs and S&P index. According to QE3 planned purchases of securities by FED, reserve balances of banks at FED  will increase to 2,6 billion USD as marked in the left side of vertical axis). 

sleestak's picture

No way

Impossible.  Long time lurker, rarely sign in but always learning from this great gang.  Now, first?

tmosley's picture

Even a paper exchange will

Even a paper exchange will cause a drain on COMEX and LBMA inventories, assuming it is allowed to trade higher than their western counterparts.  This could be an interesting method of moving silver from west to east, as the traders themselves to it to take advantage of arbitrage opportunities.

Iceberg Slim's picture

3rd!

!

Turd Ferguson's picture

Nope, 2nd

MODERATOR

But welcome anyway wink

Response to: No way
PeterLemonJello's picture

SBBS

Anyone else end up waiting awhile to get their slave queens?

SteveW's picture

This coming week

London pm gold fix will occur at 11 am EDT due to the time change in N. America this weekend (March 10) and the change in Europe occurring at the end of the month (March 31). So expect the 10 am beat down algo to be reset to 11 am.

Also this week we have March equity options expiry. Max pain for GLD is $160 and for SLV is $30. This equates to gold and silver prices of about $1650 and $31 respectively. Both of these prices are within reach this week if we get a shift from the range of the past few weeks. In any case expect more volatility. 

FriendOfTheDevil's picture

@ sleestack

Hah! I was just thinking the same thing ... I read the whole article, scrolled down to look at the comments and ... THERE WASNT ANY! haha, I was like wtf?!?! NO WAY! so I went back to main page to see if it was a closed thread or something, and, seeing 5 comments, was like "ahh shit ... there goes my chance at being first" lol ...

FriendOfTheDevil's picture

oops

oops double post... f'n internet

but while I'm on the subject ...

@Turd

You know, Turd, there's been a lot of issues with the site lately ... very slow to load, A LOT of times I come and it just shows HTML text stuff ... A lot of "error" pages, but my internet is working fine ... All probably within the last month ... just a little FYI

Thanks for everything!

@PeterLemonJello

Oh and about those slave queens ... Im still waiting on an order from Jan 29 (Freedom girls and Slaves)!! Put in another order recently for a few more, but ya, long wait indeed ... Well worth it though!

SilverSurfers's picture

Silverman more bullish than Goldman

Silver jewelry has long vanished from public view, but not gold, as any NBA star would show. Gold is the head liner, silver gets the back page. Silver mania strikes in masses, as we approach blow off time, when advantage is taken of the poor man's price. Silver is more volatile, the scary version in the PM complex. To get into silver, at this time, would, by and large take a stronger personality, having done a modest amount of risk/reward trade offs, and a knowledge of the historical interplay. It would not be surprising at all, to find that Silver Bulls remain stronger, while the gold novices follow sentiment, and abandon gold in herds, while silver bulls stick to their guns, with knowledge, drawing a line in the sand, with stronger hands.  

maravich44's picture

music video..(s)

for those that don't like it. thank you Turd.

¤'s picture

SNL

I just lost it reading the first sentence...lol!

Thanks for the thread.

pbreed's picture

Freedom Girls...

>Oh and about those slave queens ... I'm still waiting on an order from Jan 29 (Freedom girls and Slaves)!! Put in another order >recently for a few more, but ya, long wait indeed ... Well worth it though!

Same here, placed an order 1.29.13 and still no product....

It would be nice if they were clear about the shipping schedule...upfront.

The pictures of the freedom girls  look like  beautiful coins... but I'm still waiting to see one in person.

I will probably not order from them again.

R man J's picture

@SilverSurfers

I agree silver is scarier from a technical standpoint. But from a fundamental supply and demand standpoint silver is the more conservative investment. I know that sounds odd, but consider:

  • SRSRocco's EROI as % of market price for silver is less profitable than any other PM. So Energy value of silver is higher as pct of cost. Stored Energy is cheapest when buying silver.
  • Above ground silver supply has shrunk to a single digit ratio vs gold.
  • Physical investment demand for silver is running over 50:1 in ounces vs gold, when supply is only 9:1
  • Most that are new to PMs invest in gold first (if they have money) and if they are moderate income they invest 50%/50% gold/silver (so it is easier to shake out the newer gold-heavy investors)

I have been following silver since I was a paperboy in the late 60s trying to buy silver dollars from my LCS, my favorite hangout.  Got away from it for 20+ years and I plunged back into PMs in 1999 with pre-33 gold, evolved to 50%/50% pre-33 AU/pre '64 AG in 2006-2009, then to bullion in 2010-present. Point being that age and experience see the value in silver, remembering the shock of its disappearance from everyday life starting in the late 1960s. Even as a 12 year old, I knew silver would be very valuable some day. 

ag1969's picture

I ordered Freedom Girls on 1/30

I just logged into my account and my order status says processing.  At the top of there home page it says this:

"NOTICE: Due to extreme popularity of these unique, privately minted medallions, increased delays in wholesale silver supply and manufacturing times, orders have been taking much longer than normal to process.

All Slave Queen orders are now being minted and shipped. If you ordered a Slave Queen prior to 1/29 please look for tracking information in the coming days.

We are currently offering an estimated ship date on new orders of 14 to 21 days after payment is received and cleared. We anticipate getting to a 7 to 10 day turnaround in the coming weeks.

We sincerely appreciate your patience as we scale to meet your demand. Thank you so much for support in this historically significant effort."

Provident Metals has the Freedom Girl Proofs:

Silver Bullet Silver Shield - Freedom Girl

Now in-stock and shipping daily!

Freedom Girl Proof Rounds contain 1 Troy Ounce of .999 Fine Silver and arrive in New Condition. Each round comes in an Air Tite capsule inside a box, with a numbered and signed Certificate of Authenticity.

http://www.providentmetals.com/proof-sbss-freedom-girl-1-oz-proof-999-fine-silver-bullion-round.html

I did not order the proofs, I ordered medallions. 

I guess we just wait.

achmachat's picture

slave queens and freedom girls

Bollocks and I ordered from a shop in Austria, as we have to order from a European dealer.
Mine have already arrived.
Looked at them quickly and didn't see a single scratch or dent.
Pretty rounds indeed.

It took exactly 5 weeks from ordering to holding them in my hands.

L13's picture

A Golden Sales Pitch

I received this today in my email, yes it is an unashamed sales pitch but raises some interesting points.

Its quite long and does repeat its pitch over and over like any salesman would.

DISCLOSURE: I AM IN NO WAY CONNECTED TO THIS OFFER OR THE COMPANY/INDIVIDUAL INVOLVED THOUGH I DO LIKE PM's.

http://pro.fleetstreetpublications.co.uk/mmi-gold3000/EMMIP312/?a=5&o=72960&s=75800&u=778981&l=269395&r=MC&g=0

Texas Sandman's picture

Adding lightly to my stack at these prices

Using trading gains in the futures from last week to add to my stack (lightly).  Heard all the stuff here about non-availability of "junk" silver coins.  My preferred vehicle is 100 oz bars and I absolutely LOVE the RCM bars, though my initial stacking was done with engelhard & johnson mathey (better known).  I note no shortage mentioned on either goldmart or apmex sites for these.  They look to be downright plentiful, though there are a few very specific products listed as sold-out.  Perhaps just a shortage of individual products?  Perhaps folks will migrate from junk coins and american eagles to bars?  Just a thought.

Though I keep some american eagles and polar bears around for a "doomsday" scenario where I need to trade for a gallon of gas, for larger scale stacking, I, for one, find the bars much more convenient.

silver66's picture

North West Territorial Mint

Just got my silver bullets that were displayed here 6 weeks ago

Have a new paperweight on desk, 50 cal is awesome

http://silverbulletbullion.com

Silver66

Blue Sky's picture

Bollocks computer fix

Big shout out to Bollocks computer fix on last thread.  My HP laptop was running slow and occasionally giving me a blue screen saying I had improperly closed windows when I hadn't and sending me into a repair mode which then removed my Norton.

I tried his fix and the laptop is running a lot faster (it's not even a year old).  I won't know about the blue screen cos it didn't happen all the time.

For the turdite who had to remove miners from 401K I wouldn't leave it too much longer especially GPL, as it's up 30% from its low.  This is a tough market for miners as their latest results will reflect the lower silver/gold price and they will be punished for it.

Check out Keith Neumeyer's very good Kitco video as he comments on AG and the market in general.

My advice for those thinking miners: stay away from explorers with no production.  There is money to be made in the mid tier range of producers eg. EXK and AG and probably Silvercrest.

GLTA

Strongsidejedi's picture

thanks for the new thread

Oil and the current asian pacific rim issue...

in the prior thread, there was a conversation regarding oil supplies and trade in 1940.

There is an interesting related webpage that someone put together on the issue of pacific rim oil supplies.

http://pwencycl.kgbudge.com/O/i/Oil.htm

Its interesting to put the information from that webpage in the context of peak oil and the continuing battle for gold.

SilverSurfers's picture

We wont condone it

So, like clockwork, at 11:30pm, a guy come cruising the neighborhood, with his dog, laying dog mines, on everyone lawns. All others, pick it up, respectfully. So, my neighbor a deputy and I posted sign, he was nice, I wrote, if I catch you, Ill grab a bat. So, tonight I decide to stake out, with my bat, and confront the errant resident. Dont know where he lives, but within 300 yards, on 5 tiny streets. I call the LBPD, and told them, that they might want to send an officer up, park discretely, 11pm-ish, and monitor the chit going down. The go, we can cite him, if we catch him. I go oh big whoopie. I told them over the phone, I might beat the crap out of him. That got their attention, im such an attention ho. I will get in his face, and will defend myself. They ask if officers have ever come to me place before, I said, FBI, IRS thugs, treasury, you guys, sherriffs, you name it, etc, they dont like my free speech. They ask, have you ever been arrested, I go, many times, with guns drawn and assault rifles at the ready. Look, I have lived here 25 years, you guys must have a two inch dossier on me.

Well we dont condone you threatening anyone.

I go, Im not calling asking for permission. 

have a great weekend folks, mine just might be ....

Dagney Taggart's picture

Good Morning

It was an exhausting week so we took yesterday afternoon and played a little while having drinks. Here's a chart a couple of us marked up.....

A couple of interesting observations occurring around the next US election:

- The arc support and upper trendline converge at $157 in November, 2015.

- Arc support goes vertical and disappears at $450 in January, 2016.

Heading to Vancouver tomorrow afternoon and buying another 3000 oz on Monday, basically all of what our supplier there has left from last week. The LCS is dry or not selling.

There is no way for the bankers to win without resorting to violence and crime. And we know that they know it.

Have a good weekend everybody.

Bozzz's picture

How funny!

Ivars, you got 1st man! You're supposed to trumpet this great accomplishment with a witty comment ;) 

Occasnltrvlr's picture

About the Freedom Girls

Yah, I also saw that there are already reviews on Provident, whereas mine ordered directly from SBSS aren't anywhere in sight.

They're likely beautiful medallions, and I am a big believer in cutting out middlemen and doing things as directly and independently as is reasonable.  But my opinion of SBSS has been, shall I say, "tarnished"?

JackPutter's picture

Re: UK imports of silver reposted from previous thread

Would the tonnage of WWII silver shipment recovered from:

48 Tons of Silver Recovered From World War II Shipwreck

http://abcnews.go.com/International/record-setting-silver-recovery-made-...

be considered an import?  It did take awhile to get there but get there it did.

Editted foir spellink

Hagarth's picture

@Texas Sandman and SteveW

There was a lot of the RCM bars made recently, the numbers from 2010 to 2012 jump from 36000 to 76000, at least on mine. Those RCM bars fit in all kinds of places due to their thin design, inside walls they fit like a charm!  The larger portion of my stack is the RCM with a small amount of "collector coins" for when the governments try to tax bullion without remorse. 

@SteveW  Thanks for the heads up on the time change, for some reason I thought it was 2 weeks away.  I guess now there is no reason to be late for anything, sigh....

The Watchman's picture

SAD-but TRUE

ashonest.jpg

SilverSurfers's picture

diminishing returns

Taggart, great graph.

Ivars, the run up in the SP, with peaks, match the timing QE1 QE2 QE3 QE4 fairly well, or so I understand, as the asymptotic curve moves towards the horizontal, indicating increasing diminishing returns on the QE pumps. Investor pile on, not QE, may drive S&P higher, but the duck is cooked, or so it seems.

ancientmoney's picture

@R man J . . .

"I have been following silver since I was a paperboy in the late 60s trying to buy silver dollars from my LCS, my favorite hangout."

--------------------------------------------------------------------------------------------------------

My first job, when I turned 12 was a paperboy as well.  That was in 1964--the last year that 90% silver coins were minted in the U.S.

I remember making around $8/week.  Most of it got spent right there at the paper hutch, waiting for the delivery truck to drop off that day's papers.  The district manager had a candy machine, Pepsi machine, and a peanut vending machine in there--he probably made more off those machines from all the hungry paper boys than he did from the papers.

Cokes were a dime, most candy bars were a nickel or a dime, and a handful of peanuts was a penny.  We didn't get Coke at home, candy was scarce, too.  Even after gorging on the good stuff, I do remember saving up enough to buy a cool (wooden) baseball bat and glove--which I still have to this day.  Pretty thin and raggedy, but use it to play catch yet when the kids come over.  Bat broke about 4 days after I bought it :-(

$8 face today, in silver melt is a cool $168!  No wonder my dad, who was a postal clerk could buy a home, a decent car, raise 7 kids while my mom stayed home.  We had real money then.

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