A new week begins and it's going to be another wild one.
The dominant event of the week will, no doubt, be the congressional testimony of The Bernank on Wednesday and Thursday. Even though the two biggest and ugliest TBTF/PD banks are now on record slashing their "growth" estimates for the just-completed 2nd quarter (http://www.zerohedge.com/news/2013-07-15/goldman-joins-jpm-cutting-q2-gdp-1-stall-speed-funny-chart-becomes-funnier), I'd expect The Bernank to take an opposite tack to last week. He'll likely talk down QE and talk up taper, following along with his Goons who alternate daily from "more QE" to "less QE". Again, in the end, this is all of zero long-term significance...QE cannot and will not ever end...but for the price of paper metal, it's going to be a volatile week.
Both metals have room to run without disrupting the current downtrend. Silver could stretch toward $21 and gold could mover $50 but, from a technical perspective, no damage would be done to the bears' case. The key levels to watch are the downtrend lines from the April smashes and the old lows that immediately followed. I've drawn both on the charts below. IF we can get price to move through these areas, the charts will begin to look more favorable to us bulls and the spec shorts will begin to feel some squeezing as the potential for a longer-term, reverse head-and-shoulder pattern would begin to appear on the daily chart. That's still a long ways away however so don't go getting all excited just yet. For now, just wait and watch to see what happens when price encounters the red lines.
Crude remains volatile, too, and we should expect some of that to spill over to the metals. After peaking at $107.50 last week, we are currently near $106. (Higher gas prices hinder economic "growth", too.) The main thing I'm following is the fallout from the latest Israeli raid into Syria back on July 5. Whether the attack came by air (http://rt.com/news/israel-strike-syria-turkey-089/) or by sea (http://www.jpost.com/Middle-East/Report-Israeli-submarine-strike-hit-Syrian-arms-depot-319756) matters little. What does matter is that this particular attack came after an explicit warning from Syria and its allies that attacks will no longer be tolerated. All talk, no action from Syria, Russia, Iran, Hezbollah et al OR will things really begin to heat up in the days ahead? We'll see. Again, crude is your tell. Over the last three weeks, crude has only seen three down days. Watch it closely.
After I wrote about "JPM hoarding silver" last week, it seems that many folks have begun paying attention to the July deliveries. Uncle Ted's noticed it first and he passed along this latest update over the weekend. So far for July, 2416 deliveries have been made at 5,000 ounces each. Of the 2416, 2192 have gone to JPM and, of the 2192, 2004 have gone specifically into the JPM house account. This means that JPM has taken down just over 10MM ounces of real metal and has personally swallowed 82.95% of all the Comex deliveries this month. Again, what is their motive? Building inventory to deliver against their remaining short position (which Ted still estimates at 12,000 naked)? Using this metal to cover some SLV shorts (recall that SLV gained 3MM ounces in "inventory" last Thursday)? WTFK. All I know is that JPM taking physical delivery of silver at these prices is a good sign for the long-term price.
OK, for your reading list today, we have these three items. First, this great article and interview of Bill Black, the Kansas City professor who has been and remains all over the fraudulent and criminal banks.
Next, we have this great article from Jeff Nielson about bullion leasing. If you're wondering...one, two and three month GOFO rates remain negative for a record sixth, straight day. In fact, they actually worsened considerably today versus Friday. You can see them here: http://www.lbma.org.uk/pages/index.cfm?page_id=55&show=2013
And finally, our pal Alasdair is out with another terrific piece discussing gold vs the supply of paper money, which is a very interesting metric, indeed.
Finally, today, I'd like to commend everyone for the overall quality of the discussions here over the weekend. You may think it was a bit rough but, when compared to the rest of the internet cesspool, it was actually quite civilized. Of course, anytime there are divisive issues in play, we always see some folks storm off in a huff, mumbling about cults and cliques. This happens. But, in general, the conversation regarding the Zimm Trial was measured and thoughtful. I am proud of everyone. Now...that said...it's back to business here on the main thread. If you want to further discuss race and race relations, please do so in the forums. You can do so by starting your own thread here: http://www.tfmetalsreport.com/forums/current-news-and-events
That's it for today. Keep the faith and keep adding to your stack.