Saturday Gold

I don't know if the old week has ended or if the new week has already begun.

Let start with a reprint of my CoT comments from yesterday. As expected, the report was extraordinarily bullish, particularly in silver. Does this mean that the decline is over and silver won't be going any lower? Of course not. Maybe it won't end until the LargeSpecs are actually net short? Regardless,the metals are once again poised for a major move, back toward the top of the 18-month range, at a minimum.

MODERATOR
 
Let's start with gold as it went exactly as we assumed it would. For the week, price fell $21 and OI fell by 2,500. However, those bland numbers belie some incredible turnover.

On the drop to Tuesday's close of $1576, the Large Specs added 12,300 net new shorts. Likely almost all of this came on Tuesday when OI surged by 10,000 while price fell $25. The Small Specs also added a net 3700 new shorts. And of course this allowed The Gold Cartel to cover a net 16,000 shorts. This drops their net short ratio back to a bullish 2.04:1.

Now silver...

For the 4-day week, silver was down a whopping $1.42 while its OI rose by 4,200. On Tuesday, when silver closed at $27.25, here's how things looked. (Keeping in mind that on Wed and Thu, total OI rose by another 1500 contracts to a multi-year high of 157,212.)

The Large Specs which, just eight short weeks ago were long 42,499 and short 6,588, are now long 38,200 and short 30,055. That's a net change of 27,766 contracts or a shortage of nearly 139,000,000 ounces of silver or about 20% of total global production this year...all shorted by the Large Specs over the past eight weeks. It is important to remember here that The Large Specs don't actually have any silver to deliver, they are simply short the paper. With this week's changes, the LargeSpec net long ratio falls to a has-to-be-a-misprint level of just 1.27:1. 

The SmallSpecs got in on the act, too. They added 600 longs but also added 2900 new shorts for a net reduction of their long position of 2300.

And so we turn to the silver commercials. The gross long position which, as a reminder has almost always fluctuated between 30,000 and 40,000 for as long as I can recall, grew again this week. For the reporting period, the Comm gross long position grew by another 2,300 contracts to a record 57,847. As of last night, it may have reached to near 60,000. All of the Spec selling allowed JPM et al to cover some more of their naked shorts. This week they covered another 3200, bringing their total position down to 76,350. Most importantly, the Silver Cartel net short ratio has fallen to 1.32:1. This is the lowest I've ever seen, exceeding the low of 1.34:1 on 12/27/11. That record low marked a bottom and silver proceeded to rally from $26 to $37 in nine weeks.

I SIMPLY CANNOT STRESS ENOUGH HOW EXTRAORDINARILY BULLISH THIS COT REPORT IS. We are clearly on the cusp of a major rally. Did it begin today? Maybe. Will it begin next week or the following week? Perhaps. All I know is that it will begin...and soon. Be ready.

So you're probably wondering where how the charts look after yesterday's move. They're not too shabby. We can't declare victory and a bottom just yet...but...if these rallies can extend back above the lows made right after the first of the year, these charts are going to begin to look very, very bullish. Not to get the cart too far ahead of the proverbial horse but the 50-day MA for June gold is at $1614.10 and the 50-day in May silver is $29.51. It's not going to be easy but if we can get through there, too...well, it's going to be fun.

And here's an interesting chart. I recall seeing some blatant SPIN this week that argued that the reason gold was declining was a rise in real interest rates. This is patently false...like that matters. Also when everyone from Smart Money to The O'Reilly Factor is claiming that gold is dead, you know that the short side is overcrowded and due for a religious experience.

That said, look at this chart of the 10-year note. You can plainly see why The Bernank has that goofy grin on his face this morning. The 10-year is now well above the 132 level, which is where it was when QE∞ was announced and then confirmed 90 days later.

Just a couple of other things that don't at first glance seem connected. First, while scanning the headlines over coffee this morning, I came across this on Drudge. http://thehill.com/blogs/on-the-money/domestic-taxes/292071-obama-budget-to-target-wealthy-iras And check this quote: (A) senior administration official said that wealthy taxpayers can currently “accumulate many millions of dollars in these accounts, substantially more than is needed to fund reasonable levels of retirement saving.” Yikes!! I can't even begin to describe how:

  1. Frightening this is that some bureaucrat can decide what is a "reasonable level of retirement savings".
  2. Frightening at how unbelievably freaking stupid, naive and foolish this is.

And then there's the continuing saga of the N-Kos and Lil Kim. As you know, yesterday the N-Kos recommended that all foreign embassies withdraw their personnel by April 10 because "after that date, they cannot guarantee their safety". Lil Kim also drove another missile over to his coastal launch site, Cape Kimchi. The U.S. then upped that bet and raised him some B-1 bombers to Guam. What in the name of Charles Cabell is going on here?

I have a theory. I think the O'Bottom regime is deliberately poking at Lil Kim. The Kim family has been a thorn in the side of just about everyone for over 60 years. Lil Kim, as a third generation ruler, appears to be no more reasonable and likeable than either is Dad or his Papa. So it appears to me that O'Bottom is taking a gamble similar to his strategy with Egypt and Libya. Namely, "let's sponsor the ending of the current regime and then maybe, just maybe, the next leadership will be a little easier to deal with".

So, knowing tha Lil Kim is just 28 years old and likely reviled by all of the top military brass in N-Ko...Maybe a military disater, even a little one, will be enough to prompt a coup that replaces Kim with someone/something more "reasonable"? I've thought about this for days and that's the best I can come up with. Because otherwise it makes no sense. Why paint the little fucker into a corner and leave him with no options other than some type of manuver to "save face"?

If I'm right, then something is indeed going to happen in the next 7-10 days. The question then becomes, will it be "small" and contained? Or will the unintended/unexpected consequences of war FUBAR all of O'Bottom's plans? 

And now you're asking yourself, what the devil does this have to do with the IRA story?

Incompetence. Plain and simple. Whether it's dealing with the "financial crisis", crafting a budget, managing the debt, the Arab Spring...you name it. The overriding element of five years of O'Bottom is incompetence. So now here they are, attempting to massage and manage a removal of the ruling regime of North Korea. What do you think the chances are that it doesn't go as smoothly as hoped/planned??? Not good.

On that happy note, I'm going to call it a week. Have a great weekend and enjoy some down time. Come back Monday, though, with your game face on. See you then.

TF

p.s. If it looks like "reads" are down for my posts, trust me they're not. We removed the tracking system that works with Google Analytics in the hopes of easing some of the burden on the servers. The result is what looks like about a 50% reduction in accumulated "reads". No biggie.



 

418 Comments

MrGuboci's picture

First !

mapleleaf's picture

2nd

I'll take it. Thanks TF for holding up a lantern in the storm.

Fr. Bill's picture

Durty Thurd!!

La deeee dah. 

A.B.'s picture

4 TH

Tax for all the effort Turd. Hope this week will be better than the last. 

ToastPaperBuySilver's picture

Fufth!

A first (for me). 

dgstage's picture

Silver Doctors

Just posted a interesting article about Bangkok being out of gold Bullion.

http://silverdoctors.com/gold-run-there-is-not-one-single-ounce-of-gold-available-for-sale-in-bangkok/

thurd aye's picture

7 boys

ok just an excuse,my relative s wife has just has their seventh boy on the trot.wow.

beats all the others in the family.hope one of them has a brain worth some p.metal.

gold doing its usual thing..................up down turn around pick a bail o cotton.

)))TAye

Nana's picture

Fasten Your Seatbelts

It's gonna be a bumpy ride...

SilverSurfers's picture

tentrud?

yeap, that's the top 10, 3 of late, should Iz be worried. Curiously, how did turd know it was Horst who sent the ugly email? Trud eyes are everywhere! YIKES? Uncle Sam wants you!!!!

dgstate, thanks again. You could post a url, though. Just saying ....

for you system 8 kids, a url is a Universal Resource Locator, for zeroing in on a particular site.

Ernie Pantusso's picture

net long or net short ?



turd wrote:
With this week's changes, the LargeSpec net long ratio falls to a has-to-be-a-misprint level of just 1.27:1.

Because of that extremely high Managed Money silver short position, collectively the Spec Funds showed their largest ever net short, repeat net short position for silver futures since the inception of the CFTC disaggregated commitments of traders reports (data begins in 2006).

http://www.gotgoldreport.com/2013/04/gold-and-silver-disaggregated-cot-report-dcot-for-april-5.html

?

     
      
So It Goes's picture

Reposting

I posted twice at the very end of the last thread - but I am bringing them forward without further comment because they may be important.

 

Tulving is currently sold out of ASEs and 90% silver.  I have never seen this before.

It may be getting too late now buy US silver in much quantity.

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This could be a very real disconnect between physical and paper if it lasts.

Keep watching, prepping, and of course stacking while you can.

And #2

 

The US Mint has not updated the sales of ASEs for what - a week now.  They were slow to update the end of March sales and pushed those sales to the beginning of April, and since that early April update - there has been no further information.

2013 Silver Sales Totals
(in ounces / number of coins)
Month One
( oz. / #coins )
January 7,498,000
7,498,000
February 3,368,500
3,368,500
March 3,356,500
3,356,500
April 812,000
812,000
Total 15,035,000
15,035,000
 

I know that the US Mint updates the sales on ASEs on an irregular basis, but it has recently been more irregular and less frequent than I can remember.

Just another tin foil hat data point?  You be the judge.

PuraVida's picture

Friend with 3k to spend on PMs

He's got some silver and very little gold. Should I suggest he grab 1oz gold and spend the rest on silver? With the GSR as high at it is I'm tempted to suggest he go all silver. Is the diversification worth it? What do you guys think?

¤'s picture

News Blast

Lots of headlines on page 12 on the last thread that I just posted this a.m.

¤'s picture

PuraVida

That would be my suggestion.

1 oz. gold and the rest silver.

A.B.'s picture

Gold and silver purchases with bitcoin

cheekyBelow is an article about bitcoin and more interesting is that according to it lot of people is using them for purchasing gold and silver. 

Hope more people will be using their fiat before it is too late. 

http://www.marketwatch.com/news/story.asp?guid=%7BEE3A9C76-9E2D-11E2-A906-002128040CF6%7D&siteid=rss&rss=1

Bugzy's picture

Boatman

Stupid is in the water!!! At this time of year, it's bloody freezing! Get him (or her) out before it is too late.

Well, at least they wont die of a heart valve problem brought on via spirochetes / gingivitis.

Perhaps: "oil of Oregano; good for the IQ".

Dyna mo hum's picture

@PureVida

Any PM investment is a good idea. Tell your friend to grab some Franklin Halves and some Roosevelt dimes. Anything beats the declining value of fiat.  Tell your friend accumulating PM's is not a sprint but a marathon over time. Buy and hold and don't look back. 

DBean's picture

Pura Vida

You could direct him to a website.. It's Franklin Sanders site. On the home page he has "the Ten Commandments for Buying Gold and Silver". Then your friend could decide for himself and take you off the hook for future nasty emails leading him wrong...(just a joke)!

the-moneychanger.com

SilverSurfers's picture

Tulving

buying 900,000+ AgEagles for a fat cat, Tulving was slow. Not for me, Im trust him through years of dealing. but back then 2012-early 2013 always, we getting slow in shipping, but not for me, I knew he would always come through. Well, out of the fat-cat market, just me and my small stack, these days, like most, but the fat-cats would scream each day delay, being unsure and impatience. But, if he is truly shut down on Ag Eagles with no supply, meaning the MINT is out, and taking Bangkok news from dgstate, supply has to be getting short.

yeap, could be a good run now, in the graceful retreat, but you know, its only a graceful retreat, and Im sure most will Sit Tight and be Right.

Remember, the FED wants gold to rise, but in an orderly way, which fits the MO of JPM. Maybe 2400$ this run, donno. But no worries here, Im sure Horst will add in supply on the way up.

Prediction is 60:1 on the GSR before Ag takes off. Hit 59+ two days back, close but not enough, so linger here awhile, till about 37$ Ag and GSR hitting 60ish, Ag on its way to $70ish as gold hits 2400ish on the next "graceful retreat", with GSR going back to low 30ish. but really, who knows..... 

MrGuboci's picture

@PureVIda

Silver is the better investment , especially for a smallish stack which you would not have problems to move around or hide . Current gold and silver ratio leans heavily towards silver as a buy.

Texas Sandman's picture

@pura vida

My 2 cents

Worth owning some of each (gold/silver).  They really behave differently under different circumstances  Silver gets killed during deflationary downturns, but outpaces gold when we are expansionary (industrial commodity component).  Gold weathers downturns much better (actually did very well during the great depression --- counterintuitive for a deflation, but historically true).   I wouldn't count on making money in real terms in gold.  You don't buy gold to "get rich", but to preserve buying power.  Gold = Money (statements of a habitually incorrect bearded central banker, notwithstanding).  Silver has the prospect of actually making money in real terms, though that seems a ridiculous statement today.

I personally aim for about 50:50 in dollar amounts, though I reckon I'm still a bit more in gold than silver today.

So I'm buying silver to "catch up" with my gold.  Sounds like your friend would be wiser going the other way (owns no gold means should own some).

One caveat with gold is the confiscation potential.  Being wary of that & the original confiscation order, I originally went with graded, slabbed, uncirculated US $20 gold pieces, thinking government would most likely just reinstate the old order (exempting these).  Holding it abroad may be a better option, but there you have reporting requirements on foreign accounts with stiff penalties allowing treasury to essentially confiscate accounts if you run afoul of the FUBAR.  And of course, if you DO tell them about it, you just know that if they confiscate gold here, they'll know where to get if from you abroad, and the only thing standing in the way will be a foreign legal system (catch-22).

JMHO.

Modern Alchemy's picture

PuraVida

I think it would depend on the time frame he is looking to invest and how much total investment he has.

Just doing a little math he could (1) purchase over 6 Troy pounds of silver or (2) 1 oz gold and a little under 3 Troy pounds of silver.

That being said, I feel like the GSR wont hold out at 58:1 for much longer and for sure if there is a revaluation then it should get a lot closer to the historical mean.

So I would say if he doesn't have much of a stack, stack em high all in silver and convert a pound of silver for an oz of  gold later. In this senario (3) he would end up with 1 oz of gold and 5+ pounds of silver.

Either way, convert the paper into real money while you can!
 

Turd Ferguson's picture

Is it really true that you don't understand this?

MODERATOR

Or are you trying to be a pain?

The report you cite breaks down the CoT even farther. Gene doesn't just look at the broad "Large Spec" category. He breaks it all the way down to Hedge Funds.

So, the large category is still net long but the more specific Hedge Fund category has moved net short. VERY VERY BULLISH.

Turd Ferguson's picture

Excellent observation

MODERATOR

And notice that The Mint still hasn't updated. This last total was from Tuesday. http://www.usmint.gov/mint_programs/american_eagles/?action=sales&year=2013

Also, GLD shrunk again. Down another .91 tonnes to 1205.31.

Response to: Reposting
¤'s picture

PuraVida

If possible...maybe they can purchase from one of TFMR's affiliate on this site?

Just something to consider.

Bugzy's picture

Financial sense MP3 on Gold

PuraVida's picture

Thanks!

I knew I could get some great feedback from the turdites! I don't post often but read every post every day. Keep up the great work and fighting the good fight!

Off to spend some quality time in the garden with the family!

Have I mentioned I love this place?

Cheers,

PuraVida

And yes DPH, GREAT suggestion! Thanks again.

ballyale's picture

We won by losing the Vietnam war. Can we win in Korea?

Oh! We didn't win really by the death count on all sides. No one did.

But just think, if the NV simply decided it wasn't worth the effort and
retreated.

The US would then have been in the position to financially support whatever
corrupt puppet regime we installed for Billions of Dollars per year for the last 45 years or so.

By "losing", the US saved Billions upon Billions of taxpayer money and created
a "buffer" state against any Chinese expansion. The only one who really lost Vietnam was the US Military and their expansionist policy and ever greater need to
expand and create unnecessary Imperial military bases across the world.

Our "security" against the "Domino effect" "World Communism" would have been no
more real if we had won, than what has indeed happened. Conversely, our security against China has increased with a fully functional
united Vietnam, a traditional enemy of China, something our MSM never ever mentioned during all of the War years, not once.

It had nothing to do with "Communism" or Dominos or other such nonsense. It was all
about saving face for LBJ and Nixon. Well, both of them finally found out that their
political faces were mired in Pig Feces, and will ever be.

Conclusion: Once again, the only real solution to NK is if the US, China, and Russia, and Japan, conspire to topple the head of the NK snake. Secondly, they
all agree to a reunification of the two Koreas and an exit of all US forces from
SK as part of the bargain.

What would a united Korea look like? Well, it would have something that looked like
a freely elected gov't. for one. The rush to take advantage of the poverty wages in NK would certainly hurt SK wage earners and businesses. It would also spur a boom in
the building of new manufacturing facilities that both the Chinese, Russians and SK businesses would be part of. This would, of course, help out even American financial
interests.

Conclusion #2: This is now becoming a laughable contest between the US Military/Industrial complex which want tensions to continue, the Global Financial interests who see a huge new marketing sector opening up, and the political interests that can't quite make up their collective minds as to which solution is
in their best financial and security interests.

Conclusion #3: There will be no conclusion for the foreseeable future. Kim simply consolidates power and the mess continues. This is the most likely outcome as a reunited Korea would as stated above set in motion a new unexpected set of outcomes that would no longer be in the hands of the entrenched powers. These people, of whatever, nationality do not like to lose control.

So like the PM manipulation, it will drag on and on until it can't.

Bally.

DBean's picture

DPH

Point taken. Didn't mean to direct for purchase, just information. I always go back to basics...

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