Freaky Friday

From a distance, it may appear that Friday is just another day. It's not. Keep a close eye on gold all day.

"What's the deal, Turd? The BLSBS isn't until next Friday and First Notice Day is next Wednesday. Why should I care about tomorrow? I'm just looking forward to the weekend!"

I'm looking forward to it, too. It has certainly been a long week. But do you recall how I mentioned last week that gold hadn't had three consecutive UP weeks since last August? That's almost a full year ago!! Yet here we are. As I type, gold is UP about $35 for the week. Can it hold on? For a green candle, we need a close above $1296.

More importantly from a technical standpoint, during the week of April 15, when gold was mercilessly and purposefully driven down through critical support at $1525, gold bottomed at $1321. That low of April 16 held as support for over two months until price was again schemed lower on June 20. We've since rebounded. A weekly close tomorrow back above that weekly low from the original April beatdown ($1321) would be significantly bullish. Furthermore, as of this moment, I show the 50-day moving average for the Aug13 contract to be $1329.70. A weekly close above $1321 and $1330 might be a blow from which the Spec Short Gold Bears may not recover.

However, we must also remain diligent. IF, somehow, price is significantly raided tomorrow and gold were to close below last week's low of $1270....well, let's just say that that would be very bad. Very bad, indeed and it would indicate that a retest of the June lows (at a minimum) was likely in the cards.

Now do you see why tomorrow is "Freaky Friday"?

And I just want to take a moment to reflect upon the ongoing and incredible volatility in the currencies, particularly as it relates to The Pig ($) and The POSX (U.S. Dollar Index).

As anyone who has ever traded Forex will tell you, there was a time when a BIG MOVE in a currency was 20 basis points (0.20%). Heck, 10 basis points was a big, daily move. Now, currencies and indices will move 100+ basis points in a day and no one bats an eye. If anything testifies to the fact that "markets" have been simply taken over by HFTs and algorithmic trading, it's this....but that's a topic for another day.

The main thing I wanted to point out today was the extreme and continued volatility of The POSX. Take a look at this chart. In less than three months, it has round-tripped in a 4-point, 5% range not once but twice!!

I suppose that there are those out there who will apologize for the sorry state of our "markets" and claim that HFT is not to blame. OK. Fine. But then you have to be more than concerned by this:

The U.S. Dollar....which is The Global Reserve Currency...is fluctuating wildly in value...more so than ever before, with the only comparable period I can find being the 8-9 months centered around The Great Financial Crisis of 2008.

Maybe it's something, maybe it's nothing. Only with the benefit of hindsight will we be able to say with certainty. Regardless, to me it's another indictment of the fiat currency system where the value of your work and savings fluctuates wildly based upon the whims of the "market" and a few, unelected central bankers. At the end of the day, you can keep your dollars. I don't want them. I'll keep my gold (and silver), instead.

TF

214 Comments

Bollocks's picture

FURST!!

Have to whip this out (again) to celebrate cheeky

kingboo's picture

#2.....

Thats right mofo...

Turd Ferguson's picture

And this is very good

MODERATOR

I recall seeing Jan on Max Keiser last week and thought she was quite impressive:

http://therealasset.co.uk/backwardation-gofo-gold/

H - original's picture

Thurd

had to say it...

zman's picture

I thought gold and mainly

I thought gold and mainly silver would get a little more bounce with the dollar down so much today. 

I remember the days when dollar weakness meant something to markets, seems like that trade ended sometime ago.    

meegoreng1's picture

It doesn't matter

if Douche Bank or for that matter, any banks defaulting. Gold and silver is not going higher in prices until physical demand overwhelms supply! PERIOD!!!!!

We can have a world war, QEs to infinity, dollar collapse etc but until we control the physical, it will continue to be manipulated. Kapish?

Now if you do agree with that, between gold and silver, which do you think we have a better chance in gaining control. Gold is being hoarded for centuries and we almost have all the gold there's ever been. Not so for silver.  Silver, because it is much cheaper, its dwindling supply and of its multiple industrial usage, is our only 'weapon' against this tyrannical forces.  If we want these decades of manipulation to end, we the people of this world need to join forces and buy up all the physical silver there is. That is the only factor that will help propel higher silver prices!

While we think in terms of months and years for an event to happen, the EE plans in terms of decades and centuries to fulfill their agenda.

kingboo's picture

i take strange pleasure

Out of the fact that "first!" "Second!" "Thurd!" bothers some people and i will tell you why: If you take yourself so seriously that something like a little tradition bothers people...then thats there problem...

Bollocks's picture

I've just hired 13 witch doctors

to chant THIRTEEN-THIRTY for the next 30 minutes.

That'll fix it. Just watch wink.

 

Bollocks's picture

kingboo

I disagree. All that "furst, second, thurd" stuff is totally immature, reveals a lack of intelligence, and destroys all integrity in those do that sort of childish stuff. That kind of behaviour is quite unacceptable to me.

There, I've said it.

no, wait...

SRSrocco's picture

A VERY INTERESTING TREND HAS TAKEN PLACE IN SILVER

I have been going over the data from the U.S. Mint, and I have to say... investors are buying a whole lot more silver eagles in volume and in dollar terms compared to gold eagles.  So far in July, silver eagles are selling at a staggering 95 to 1 ratio.  I also have compared global gold investment compared to silver in my newest article:

SILVER: The King of Future Investment Gains

http://srsroccoreport.com/silver-the-king-of-future-investment-gains/silver-the-king-of-future-investment-gains/

The Watchman's picture

GLD Continues to be DRAINED-2.41 Tonnes Gone

Tonnes927.35

Ounces29,815,389.67

Value US$39,521,275,234.12

Howard Roark's picture

Another week

Let´s see what tomorrow brings. The bag of tricks of EE is big, we know this, right?

I hope that the underlying assumptions of Turd´s post win. And we would go off for the races.

@bollocks - fun start of flow in the comments section. ;)

Keep brave,

HR

ps - just a (maybe late) contribution on some philosophical insights in the other thread; beliefs are a condition of knowledge (not opposites as some classical thinkers such as Plato thought); knowledge can be seen as having some conditions and beliefs are one of them.

Howard Roark's picture

Regarding GOFO data

I think it´s not Mish (and others) that are skeptics on the meaning of some data. Take this passage from TButler:

"There continues to be an outburst of what I feel are misleading reports from within the precious metals Internet community. Some of the reports, from declining gold inventories on the COMEX, to stories about lease rates and backwardation in gold, to predictions of COMEX default or sudden changes in contract delivery terms, have my head spinning. Look, I’m bullish about the price prospects for gold and silver based upon the market structure and the fact that the silver cost of production is above current prices, but that’s no excuse for spreading false information. The level of COMEX inventories has little to do with a contract default. What would matter more would be short contract holders refusing to buy back or roll over positions in the spot delivery month.

A delivery default would kill the COMEX and it would be a self-inflicted fatality. The CME knows better than anyone what the consequences of a delivery default would be and they would take any measure necessary to prevent it, especially now that JPMorgan is massively long COMEX gold. The same goes for suggestions that the exchange would suddenly and unilaterally alter basic contract delivery requirements or institute a cash settlement. The term, futures contract, means there are rigid contractual requirements which can’t be suddenly abrogated without that being considered a legal default.

I suppose the CME could introduce new futures contracts voiding the physical delivery obligations of the current contracts, but that would take years and no one would deal in such phony contracts anyway. The one thing that gives COMEX metal contracts legitimacy is the ability to convert futures contracts into actual metal via delivery. The chance of the CME initiating a contract default in gold or silver, regardless of what warehouse inventories may be, are about as good as me stepping ahead of the new royal baby in future UK succession plans for the throne. And I have to add that I don’t understand any of the current discussion of gold lease rates (and I am very familiar with metals leasing), for the simple reason that none of them make any sense. Let me be the first to say it – for a wide variety of reasons, GOFO is goofy."

Just some more insights for our discussions. Beyond all ad hominem attacks, lets keep thinking and discussing everything fairly, critically and rationally. We have something of value here, don´t we?

Keep strong.

Salut,

HR

dgstage's picture

I am bettting we Hold

the 1321.00 line tomorrow.

Bohemian's picture

@SRSrocco

That's interesting... Well, one answer could be that the price of AGE is too high for many people right now, that several ASEs are just more practical for many than one AGE...

However, we don't know who is buying those ASEs. It could be that the averages are same as before, but there is one or two -- new major buyers of ASE, buying ASEs in bulk, right? Look, some say that JPM is LONG silver, for some reason. SLV is gaining physical silver, while GLD is losing gold on daily basis... Is there something JPM knows and we don't? Sure, they know much more than we do. Is this their game? It could be...

DirkDirkler's picture

I don't like the dollar going

I don't like the dollar going down sharply with gold going up only slightly. A reverse correlation has been established over the last months, but it has not always been that way. If that correlation holds up, I more of expect the dollar to reverse with gold going down sharply again than the dollar breaching and decisively going below 80.

If this correlation were to continue as it is now, it would probably take the USD to fall to 60 to get gold up to the alltime highs. Not going to happen.

tmosley's picture

Too many indicators are

Too many indicators are signaling oncoming crises, or are giving unprecedented readings.  SOMETHING is certainly about to happen, and it is going to be a lot bigger than 2008.

Hope you are ready for it.  I think it hits between September 1st and November 15th, personally.

jezfry's picture

10 year treasury

When the yield inches up the market hopes and expects a dovish comment will be uttered by a central banker - so the dollar drops. Soon however rhetoric won't cut the mustard. Then it will be fun...

Just A Regular Guy's picture

@tmosley

Hey buddy, nice posts on the previous couple of threads!
I do concur with you and turd. One being that I think today (26th) will be very interesting RE:Gold, and the dollar machinations. Similarly I agree with you about a crisis coming. I think it could even hit this weekend.... Some things I think about are seeing the USD Index ralliyng sharply (say above 85.5), and similarly remember too the release of the new $100 bill in October! I think the crisis hits before October, but defiantly in the next 8 weeks with a bias towards sooner rather than later.

Peace

Just A Regular Guy's picture

@SRSRocoo

You're working on the Sprott hypothesis! He has mentioned that more silver is being bought in relation to gold, yet the ratio is what 1336.4/20.30 = 65.7. Hence he believes silver will go absolutely ballistic once it starts moving!

Peace

tyberious's picture

Gold Backwardation: When Good

Gold Backwardation: When Good People Make Bad Comparisons

jessescrossroadscafe.blogspot.com / By Jesse / July 25, 2013

You may have heard some talk lately of ‘gold backwardation.’

Backwardation is a pricing phenomenon in the futures markets where the price of an asset now is higher relative to the price of that same asset in the future.

The usual state of most assets is one of contango, where the price increases in the future. This is often due to the time value of money. But let’s put that aside for now. Especially in times of ZIRP.

And there is the source of the term backwardation.  The pricing is literally ‘backwards.’  I don’t remember where the heck contango comes from, and don’t care, but that is a shortcut in how I remember the difference between them.

There are strong indications in the gold market of short term physical supply pressures. Gold Forwards prices are negative, and in a way that we have not seen in some time.   Registered or dealer inventories on the COMEX exchange are at record lows for this leg of the bull market, something that has signaled a change in price trend since the gold bull market began.  Reports of tight supply in the physical markets have been in the news especially in Asia.

READ MORE

SilverSurfers's picture

As Long

as its freaky friday, lets have a fitting tribute to all at Turdville.

I swear that zebra was rockin to the tunes, no chit!!!

I swear I've seen that zebra before, somewhere? *&&$%^#  LOL

The Zerbra needs some audio though.
DirkDirkler's picture

Exactly meegoreng

I would like to quote you for truth.

Gold is actually the friend of the establishment. Over history, they have always been transferring it to the power center of their choice. Right now they are exploiting the last natural, human and financial resources of their current power center, the USA. Mostly, they have via the US military control, but it is not sustainable without a strong enough economy behind it. So they are currently building up their next power center, China, in every aspect - Financials, technology, demography, energy, resources.. You'll notice that considering the long term, China is currently making the right decision in every aspect, while the US is making the worst decisions in every aspect, at the benefit of the present. This is not by coincidence, this is by design.

One means of control is gold. Who has the most gold can back up their currency with it (while economic, military and psychological superiority is also needed to be able to issue the reserve currency of the world). The current suppression scheme may at first glance seem in contrast to that, but it is not. What better way to gain control of all the gold than to make us not want it? It enables the quiet transfer of bullion to their new power center (just like the London gold pool fed Europe with gold in the 60s, which decades later turned into the EU, another one of their power centers). Also it ensures that King Dollar retains control a little while longer, which is needed until their new power center and their control there is stable enough.

They truly are the squid. Tentacles all over the world, in every aspect of human life. "Own nothing, control everything" - a Rockefeller motto. When you own nothing, nothing can be traced to you. You control everything, but noone can ever prove it.

They don't make mistakes, don't for a second be drawn into that line of thought. Of course normal human beings make mistakes, but don't project yourself onto others - the rulers of billions of people don't make mistakes. If it were so, they wouldn't be the rulers. Simple as that. But they do enter calculated risk scenarios. One of those calculated risks is silver. They didn't try to gain control of the silver as they did with gold. So they are obviously counting on their ability to make us believe that silver is not essential. Or they have some other plan(s) that we have no imagination of yet. Who knows. But I do agree that silver is a chance for us.

Honestly, I don't know if silver can break the system of their control. But taking away their silver is one way of making it hard for them. I for one am very pleased of that fact, while ofc I am also very pleased that it is going to make me very wealthy one day. Silver is a win-win scenario for every owner for sure, and probably has the best risk-reward ratio of any investment right now, if not ever.

Addenum: regarding production price and physical supply, realize that the bull market IS the production price increases. It has nothing at all to do with dollar or debt. Foremost, the reason why PM prices are going up are production price increases. Production price has increased somewhere between 10-20% every year since around 2000. Look up Rocco's work, it will confirm it. It mainly has to do with continuously declining ore grades and rising energy prices. The latter are also mainly a product of accessability of oil reserves constantly declining. The suppression scheme only ensures that we never significantly go above production prices, and that sentiment and thus investment demand remains low via constant surprisingly sharp price drops, volatility etc. To break that, as stated correctly by meegoreng, a supply squeeze is needed, where mostly the industrial users of physical silver would bid up the price on the physical market, rendering paper markets with significantly lower prices untrustworthy. Don't ever count on a supply squeeze in gold - the big buyers in gold belong to the squid.

zman's picture

@tmosley

What are the indicators that are signaling a crisis bigger than 2008?

Today we have the US stock market hitting all-time highs.   Bonds yields despite the move higher are still very low.  PM prices still down a lot.  GDP is weak, but still positive on a global basis.  Real estate prices are at least stable, and moving higher in some markets.  The dollar is still above 80 on the index.

I admit that oil at $106 is a issue, so watching the oil price will be important.

Just A Regular Guy's picture

Got Gold Report from July 17th

rtabit's picture

Scientists Make Mice “Remember” Things That Didn’t Happen

One step closer to plugging something into my head when I want to learn something like in the Matrix.
 
Scientists have created a false memory in mice by manipulating neurons that bear the memory of a place. The work further demonstrates just how unreliable memory can be. It also lays new ground for understanding the cell behavior and circuitry that controls memory, and could one day help researchers discover new ways to treat mental illnesses influenced by memory.
 
In the study, published in Science on Thursday, the MIT scientists show that they can modify a memory and have a mouse believe it experienced something it didn’t. Susumu Tonegawa, a neuroscientist at MIT, and members of his lab used mice that were genetically modified to allow for certain neurons to be activated with a flash of light; the technique enabled the researchers to activate a memory that caused a mouse to believe it had experienced electrical shocks in a particular box, even though no such thing had happened there. “The process of memory is nothing like a tape recording,” says study co-first author Steve Ramirez. “It’s really malleable and susceptible to the incorporation of new information.”
 
The results are “really mind-blowing,” says Sheena Josselyn, a neuroscientist at the Hospital for Sick Children in Toronto. “It shows that your memories are really just activities of different cells, and they can take the place of an actual thing that happened by just activating some cells in the brain,” she says. “People have been playing around with this idea for a while, but having a theory and showing it are two different things.”

http://www.technologyreview.com/news/517226/scientists-make-mice-remember-things-that-didnt-happen/

Turd Ferguson's picture

It's only getting worse

MODERATOR

And to think...There was a time, when The Patriot Act was being considered, that the general public was up in arms over the idea that "the feds" would have access to your library records...

http://news.cnet.com/8301-13578_3-57595529-38/feds-tell-web-firms-to-turn-over-user-account-passwords/

SteveW's picture

Forex volatility

is, I believe, a symptom of an underlying tottering, destablization of the current system falling apart. Central banks intervene to control their currency values but there are also huge pools of currency looking to make a profit (think Soros).

Dyna mo hum's picture

I keep my money in my sock now.

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