Option Expiry, a 3-day Weekend and a Raid on Gold and Silver. What a Surprise!

It what should come as a shock to no one, the metals have been mercilessly driven lower today following a positive Comex open. All while the dollar was flat, too. Hmmmm. Who would have seen that coming?

Today is the third Friday of the month. This means that options on stocks and stock indices expire this afternoon. This includes all ETFs, most importantly GLD and SLV. So, after a surprisingly positive overnight and Comex open, the raid was ON. Further impacting the selling pressure is the 3-day weekend that lies ahead for the U.S. With all the crazy shit going on in the world these days, nervous and weak-handed longs would rather be out than in over the weekend and, in all honesty, can you blame them? Here at 10:30 EST, I expect the PMs to remain under pressure for a while longer, maybe stabilizing and trending higher toward the close and on the Globex. We'll see.

paper_2-17gold1.jpgpaper_2-17silv1.jpg

So, I'm sitting chilly right now. I don't want to fiddle with silver just yet because it faces its own option expiry next week. I'd like to buy some gold but I'm waiting for it to dip toward 1705 again and I still think (hope) that it could fall to 1680, as well. Again, we'll see.

paper_2-17gold6.jpgpaper_2-17silv6.jpg

Here's an updated chart of the POSX. For now, it looks like its wants to head lower. (Now that I've typed that, I'm sure it will head higher.) At any rate, until we get some kind of actual resolution in Greece next month, The Pig will likely continue to fluctuate around in this 79.60 + 1.00 area.

paper_2-17pig.jpg

A Turdite pointed out yesterday that main metal correlation is actually silver vs the euro. He has a valid point. Take a look at the charts below. For fun, do what I do: Print them. Put one on top of the other and then hold them up to the sun or some other bright light. (This is how we did it in the old days!) Note the ridiculously high correlation and then ask yourself this all-important question: WHY?? Why would these two, mostly-unrelated items trade in such close correlation? To me, the answer is WOPR. Some folks claim that 90%+ of the PM markets are HFT algos (WOPRs). These two charts would certainly seem to confirm that. Why else would a monetary and industrial metal move in lock-step with a particular currency? For instance, does silver mining capacity and production have anything to do with European stability and growth? Not really. So, again, if the fundos are unrelated, why do these two trade together?

paper_2-17eur.jpgpaper_2-17silvd.jpg

Crude is rolling again today. I have a high of 103.88 and a last of 103.26. The area around 103.50 is very significant resistance. Be on the lookout, though, for a false breakout that stops at 105. Above 105, it's headed back to 115 and $4.00/gallon gasoline. You've got to figure that The O'bottom Regime would very much like to avoid that eventuality.

paper_2-17crude.jpg

Lastly, I give you this ES (mini S&P) chart without further comment.

paper_2-17es.jpg

Just two "news" items for you today. First, there's this. In one sense, it's a happy story as the folks that found this stash will be rewarded. Primarily, though, this story makes me kind of sad. I imagine that someone, fearing confiscation by the Nazis, hid their gold. That person then never returned get it because, I imagine, he/she died in the conflict. In the end, it just goes to demonstrate once again that humans and fiat are mortal. Gold lives eternal.

http://news.yahoo.com/blogs/sideshow/raining-gold-secret-1-million-gold-stash-discovered-203724430.html

And then there's this. I saw this earlier today and now it's been picked up by ZH. I have no idea what the heck is going on here but something is seriously f'd up. First there was this:

http://zerohedge.blogspot.com/2009/06/open-letter-to-secretary-of-department.html

and this:

http://zerohedge.blogspot.com/2009/06/guardia-di-finanza-to-bloombergdie-welt.html

And now there's this:

http://www.zerohedge.com/news/6-trillion-us-bonds-seized-zurich

and this:

http://www.zerohedge.com/news/why-were-trillions-fake-bonds-held-chicago-fed-crates

Thoughts anyone??

That's all for now. I'm recording this week's podcast in an hour or so and I'll post it later this afternoon so please come back and listen to it. Also, keep a close eye on the CoT numbers and any changes in the silver lease rate heading into the weekend. Next week promises to be another wild one!

TF

271 Comments

Tyler's picture

scam

i'm pretty sure the nigerian scam was not a "threat to the international financial system" and did not require international police to be involved for months...

i don't mind that you challenged someone's post, but it would be nice if you had an alternative idea you had put some more thought into

anyway, it's Friday - have a great long weekend everyone!

Groaner's picture

It infuriates me

what a scam

Groaner's picture

It infuriates me

what a scam

lairdwd's picture

Turd - if you take that chart out further - you can see more

of the same pattern. Two other raids from 1735 to 1715, and then another one at 1740 to 1720 area. 

Seems like their algorithm is to push it down 20 points over some predetermined timeframe at gold $5 dollar increments.  My guess is that they can't leave these algo's on without a trader monitoring them, so hopefully Sunday/Monday - the good guys will be able to push it through with a nice EUR/USD spike prompting a decent short cover rally. 

murphy's picture

Pining

Which way to the bacon pools? Are they down the street from the Dark Pools of Soros (sorrow)?

abguy4's picture

Re: BONDS for Gold

Let's cut to the chase on this whole Bonds issue , OK????????

International Bonds, Bank Bonds, Corp Bonds, It does not matter.

Anyone, who exchanges their Gold for a piece of paper is getting scammed.

What part of that is hard to understand~!?

I care not how fancy the inscription at the top, or how many colored inks are used,

or how many noble faces are depicted, here's the bottom line,

when you exchange Gold for paper;

Your Gold is gone, and you got a fancy ass-wipe in yur hand.

Are we clear???????????????

HeNateMe's picture

CounterFIAT Bonds

In Jim Rickards' Currency Wars he mentions a fictional scenario, while participating in a currency war game, where Japan discovers large shipments of counterfeit hundred dollar bills.  In this fictional scenario Swiss banks had been scammed by these hundred dollar bills.  Jim Rickards wrote, "The Swiss banking losses and the large size of the interdicted shipment were enough to cast doubt on the value of US currency held abroad."

Could this be a strikingly similar real scenario?  Six trillion in counterfeit US bonds discovered?  Financial war by other nations to undermine the value of US bonds?  Will foreign nations now question the value of the US bonds they hold?

You should all read Rickards' Currency Wars.  There is a lot of prescient information contained within.

Thoughts?

HeNateMe

Exbroker's picture

This is like................................

Watchin paint dry! Oh me! Oh My! Hosinpheffer Incorporated!

Ya...another day in Turdville. Can't catch a break. Get used to it. These lunatics will try to grind you down. 

Now I know why they made pot illegal. No comfort for the weary.enlightened

SRSrocco's picture

JUST A FEW MORE EXAMPLES

I do realize this is TURD'S METAL REPORT... but energy runs the whole system.  Without energy, we don't mine gold or silver.  Here are a few more examples of the EXPORT LAND MODEL showing how exports decline as both production decreases while domestic consumption increases:

In all of these cases, we can see the BLACK LINE (consumption) increasing.  Even though the Middle East is producing more oil today than it was in the 1970-1980 period... NET EXPORTS (in green) are actually lower than they were in the 1970-1980 time frame.  This is because these Middle Eastern countries want to have an economy like ours.  

Increased consumption of domestic oil and a decline of production will make AVAILABLE NET EXPORTS (minus China-India) fall from 35 mbd in 2010 to only 16-18 mbd by 2020.  Any increase from SHALE OIL fields will only minimize this decline somewhat.

lairdwd's picture

It's comical to watch the action

They need to reel in a few more longs, so they tweak the EUR/USD lower 20 pips. The algos fire and buy gold/silver. Then, to push it another leg lower, they tweak the DXY higher, say 10 pips and SLAM on the shorts.

In any event, unless the DXY is shitting the bed,  I would say the crimex close beatdown is in play for today, and we get our final push lower then to 1715/33.05 - heck I'll even go 33 even, as they already executed the LBMA open and close beatdowns, and they need a nice low price to ward off the margin clerks

JimmyTheHand's picture

Fake Bonds - Gold - Currency Wars

I hate to plug a book, but this story about the "fake" bonds, etc... it all smacks of Rickards book Currency Wars.  I can't quote the chapter, but one of the things that the Soviet war team does is attempt to undermine the validity (like it has any anyway but I digress) of the FED's USD system by printing up fake $100 bills in mass quantities and letting them be found.  Same thing as this except this is on a much more massive scale.

Not that this is fake by any means, I am just pointing out the book has a like minded event in it. 

Those containers look pretty real.  If it is fake, what is the motivation of those faking it?  Would a someone attempting to fake it REALLY try to cash in billions/trillions of bonds?  If it is legit, having something in your possesion of this magnitude would be like walking around with 10 pounds of uranium in your back pocket... your gonna get your a$$ handed to you by TPTB.

HeNateMe's picture

@JimmyTheHand

It might be a way to shake the confidence of any nation holding US bonds.  Are they real or are they fake?  If six trillion counterfeit bonds have been found what's to say that my 500 billion bonds are real?

P.S.  See my comment above. 

HeNateMe

HeNateMe's picture

@JimmyTheHand - not to be ticky-tack

But it was not the Russian team that leaks the counterfeit $100 bill story in Rickards' book.  It was actually the gray cell which is any nation other than US, China and Russia.

HeNateMe

Groaner's picture

So the Oligarchs will spend trillions more

on a war with Iran now, the Iraq war cost 4  trillion, the Afganastan war is costing who knows how much, but they consider this money well spent? For whom? The bankers who have nothing to lose but always lots to gain..

I can't wait for Dan. 2:44

Red Pill's picture

Tyler

neither is Wilcox' story a threat to the International financial system. 

happy to discuss further in the ridiculous conspiracy theory section where this one belongs. 

Groaner's picture

You watch, Trader Dan will say about todays action

I guess those hedge funds decided to get out for the 3 day weekend. Not wanting to be long with so much insanity going on in the world.. blah blah blah

cpnscarlet's picture

I feel the spring

Must say that the action of the last two weeks is both fascinating and sickening at the same time. Add to that the dramatic rise in Santa's posts and it makes for times that are even more interesting than usual.

I have no grand insight to what's happening and I stopped believing most numbers that are being posted, especially when the COTs and delivery numbers just don't jive. If there's a comment from the field I'd like to hear, it's what statistics on gold and silver do you believe at this point.

In the end, my gut just feels that spring being compressed to a frightening extent. I've seen springs small and large in my life go high order - fine parts lost forever and hands broken...eyes miraculously spared. It can be ugly. But this time I hope my gut is right. When this tension is released, PMs will enjoy some great gains  and, hopefully, some EE body parts will be metaphorically crushed to a pulp.

I have stacked some more lately and am considering my next Au purchase. I am also trying to decide how to position my shares for March 15.

/rant off/

PS - Doctor - Good luck on the interview. Unfortunately, a job I really wanted (not much $$$ or time, but looked like fun) was a flush - not enough experience.

Colonel Angus's picture

Fake or real bonds???

Does it matter when they are supported by fake USD? Oh yeah, they're gold bonds, so all that gold we have in Ft. Knox...welll....nevermind. (Anyone done the calculations to see the USD value of the gold in Ft. Knox if we believe it is still there? Yeah, me too.)

So is this where the proper valuation of gold comes in? We need to pay off that USD$6T, so we offer the 8000 tons of gold for it, and voila...you tell me what gold is now worth...I get $31250 per ounce. So, I'll let you have an arbitrage here and offer as much gold as you want at $30,000 per ounce. 

California Lawyer's picture

Fake Bonds?

The story is just too damn interesting to dismiss.  Turd's posts of the zerohedge stories from back in 2009 are as complete and thorough an analysis there is.

If all or some of the bonds are fake, this is a very strange story.  If they are real bonds, it is even stranger.  I cannot for the life of me get my head wrapped around either one of these scenarios.  Is Fulford right?  Or is he some drug-addled loon?  Choose one!  If he is a drug addled loon, the so are all of the others, right?

Do I trust the fed govt?  Hell no.  Look at the Christmas bomber story.  Is there any doubt who runs this country?  Open your eyes and stop being manipulated.  Think for yourself.

I view this story like the rumor of fake or non-existent gold at Fort Knox.  Why on earth would TPTB NOT simply open the vault for an audit and stop all of the rumors, UNLESS, there was some truth to them?  I personally believe that the gold was leased out, sold repeatedly, or some combination, and like all fractional banking schemes, is simply a massive fraud perpetrated upon the world.  An audit cannot be allowed to occur, as that would expose the fraud = game over for TPTB.

Do the audit, prove me wrong, and I will happily shut the fu-- up.  Until then, no way, not on the heels of the Christmas bomber story.

Anyhow, regarding these "fake" bearer bonds, I happen to believe that the airing of this story on main stream media is done for one reason: to make it clear to the world that capital flight will not be allowed.  ​Whether the bonds are fake or not, the message is unmistakable.

It goes like this: 

(1) The super rich, like a despotic dictator, or what not, want to keep their ill-gotten booty from being confiscated, or devalued, etc.;

(2) However, the financial system is rife with corruption, and counterparty risk, as everyone at that level knows, such that the last paper safe-haven is US paper;

(3) The super rich are obviously aware of the pending, imminent collapse, either by being tipped off or otherwise;

(4) The super rich correctly predict that digital banking, controlled by the cartel, will either be stopped outright, or temporarily halted to prevent capital flight while a new currency system is implemented;

(5) Since paper instruments, such as massive bearer bonds are easy to transport, they remain the sole credible means left for movement of fantastic sums of capital from one physical place to another [remember, no one at that level trusts anything now but US paper, backed by the US govt, err, nuclear submarines, etc.];

(6) TPTB know this, so

(7) MOPE emerges and crafts a story.  The bonds are fake, forgeries, an elaborate hoax.  Schemes of this sort are NOT to be taken lightly, because they are a global catastrophe [unlike wars, though, that enrich the military industrial complex, <sarc>]!

(8) TPTB both manage expectations of the masses, and simultaneously create fear in the super rich that expatriation of wealth will not be allowed to happen. 

This is the best I can do for now, but who knows what the truth is?

If anything, it reinforces my preparation, because stories like this are just impossible to imagine absent some real panic as we reach the end of the Keynesian experiment.

Tyler's picture

I wasn't talking about Wilcock

I was saying the Bloomberg story says the 6 tril were a threat - and that this isn't the same thing as a nigerian scam.

understand if you're saying wilcock is a scam.  i definitely don't buy a lot of what he says

just interested in theories on this 6 tril story

Red Pill's picture

Rickards book

read it, twice. 

this story is not anything to do with Russia or China trying to undermine confidence in anything, this is smalltime crooks or scammers IMO.

it will fade away into oblivion, and not because the Jesuit Illuminati or Vatican made it so, but because it may as well have been written by JK Rowling in the reality department.

have you read the "lawsuit" ?  did you see any actual evidence in it or did it look like the rantings of a madman to you too?

do you think if "The Dragon Family" were real, they would be entrusting their fortune (literally and figuratively) to people as delusional as Fulford, letting Wilcox break the "news" on his alien believing blog, and whotf is Steve Keenan?

wouldnt they use a high powered Chinese law firm instead? 

now lets get back to Turd's metals post and leave the fairy stories where they belong.

Senseosensei's picture

@Red Pill

I believe in aliens when i see one in front of me, no debate there.

But the law suit has been filed and looks real enough. Maybe the lawyers in the room could elaborate on that.

The bonds look real too, and according to your own link there are bonds out there that match dates and $ amounts.

Moreover, i find the timing (why now?), place (Europe?), and the fact that they are in FED boxes (see ZH), very suspicious. 

So who would have benefited, and who would have lost. 

The Nigeriam scam comment was a practical joke, i take it.

Big L's picture

Race to the bottom

Considering the current mindset of currency devaluation as the goal for world currencies (to stimulate exports and grow their economies in addition to  reducing the cost of paying back debt - in cheaper 'dollars'), it would be reasonable to suspect the fake bonds could be a false flag  operation.

But 6 Trillion? I mean come on! Dated 1934? I'm not a bond person, but is that supposed to be the origination date for those bonds?

I don't get it, how could they be floating around since 1934?

Explanation please from the bond guys?

Big L

Groaner's picture

Nothing new under the sun

going back to the beginning, every form of human government has been tried and they all have stunk and have dominated man to his injury..

READ Psalms chapter 2.. This is what the rightful ruler is going to do very soon..

realitybiter's picture

MF fall out

What about the fake cash that MF Global had in segregated customer accounts?

How's that investigation going?

cricket, cricket.

http://www.reuters.com/article/2012/02/17/mfglobal-collateral-idUSL2E8DH1MG20120217

and so it goes.  I had a call from a broker the other day encouraging me to start trading with him at his new firm.  I generated 4- 5thousand dollars a month in commissions for these guys over the last few years.  sometimes 10.  I traded frequently with decent size.

I said, "why don't you just be honest and say, hey, retard, want to get screwed again?   Seriously, Tom.  I will never ever ever ever trade another futures contract until I see two things.  1) criminal convictions.  2) repeal of Glass Steagal and the repeal of the 2005 BK laws that allowed these idiotic derivatives to have superiority over customer cash.  This situation has revealed the massive flaw that are systemic.

I won't hold my breath for this change, I will just leave.  ....and as a guy who actually likes you, suggest that you do like me and change.  Your job will be gone and you will struggle short term.  JMO.

I am sorry. I have to get some stuff done.  Don't ever call me again until things materially change."

ActionFive's picture

Price discovery

for PMs -

Won't be found at COMEX. Might have been tried last year/Asia buyers/FUBM-gone. Dial setters won.

Won't be found at phyzz supply. Populace/dials are being supported-no fear, and no cash.

Is being tested in Asia. Gold sellers/EE/chippers vs Asia gold buyers. The staging is set for classic EE/MO to collapse economic support to bring NWO changes from crisis. The Asia gold system needs to be running before the planned EE collapse/crisis. Chavez called his gold/Iran is trading on theirs- I'm thinking the winner determines yer PM prices. 

Bible says EE/chippers beat gold holders- but there is here to there.

Wiseman priority: The Lord > home supply > phyzz crude (if you could) > phyzz PM. 

bullwhip29's picture

@ California Lawyer

Re: Fake Bonds?

I bet you the bonds are real and are simply being seized in broad daylight for other reasons. Know who you are dealing with...

http://www.wanttoknow.info/911/black_eagle_trust_fund

question's picture

@SRSrocco

Good on you bringing up the oil info; I think that not many get it and it is really important figuring on how much we (especially the west) burn to maintain our life styles.

Going forward won't the cost of mining reflect the increase in fuel prices required to extract metals?

Will this raise the price of the metals or will it make them uneconomical to mine?

If the cost of mining is too high then metals become scarce and the price goes up?

One way or another the increasing scarcity of oil will change existence as we know it.

There is no brighter future ahead. Our onward and upward to infinity attitude is going to meet the reality of peak oil soon and the next generations will be living in an entirely different world.

Maybe the space people will save us but I'd rather know a blacksmith and an herbalist and a farmer with chickens and cows.

Groaner's picture

So what are the most in the money silver options at?

to give us an idea on how far they will smash the metals, silver, to make them worthless.

stained white shirt's picture

Fake Bonds from ZH

Why Were The Trillions In Fake Bonds Held In Chicago Fed Crates?

_58563286_fakebonds.jpg

http://www.zerohedge.com/news/why-were-trillions-fake-bonds-held-chicago-fed-crates

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