Watching the metals battle horizontal and MA resistance made me think of our theme song at the old "Watchtower" site. Clearly, it still applies today.
So, where are we on this fine Friday? Well, first of all, those we're some perfect and beautiful FUBMs yesterday. And don't let the silly name throw you. The FUBM is an extremely powerful and important chart formation. Why? It shows that, even though The Cartels would like to rig prices lower, they are unable to do so because of strong demand for both paper and physical at the discounted/rigged prices. We saw a bunch of FUBMs back in early 2011, when prices were preparing to stage their massive rallies. Here are just a few examples:
- http://tfmetalsreport.blogspot.com/2010/12/fubms-continue.html (12/29/10)
- http://tfmetalsreport.blogspot.com/2011/01/feeling-good-louis.html (1/26/11)
- http://tfmetalsreport.blogspot.com/2011/02/not-too-shabby.html (2/3/11)
- http://tfmetalsreport.blogspot.com/2011/02/blythe-is-in-house.html (2/16/11)
Do yesterday's FUBMs signal that a similar move is coming over the horizon? We'll see, I guess.
Another bit of circumstantial evidence of the impending rally comes from the sales of ASEs out of the U.S. Mint. The biggest January on record was January of 2011 with sales of 6.4MM ounces. Yesterday, as we crossed the 6MM mark on just the 17th of the month, The Mint suddenly "suspended sales" through at least the 28th. ( http://www.bloomberg.com/news/2013-01-18/u-s-mint-silver-coins-sell-out-with-fund-buying-at-5-year-high.html) This looks and smells pretty fishy to me. Are they trying to mask and conceal demand OR are they simply out of metal? Actually, who cares?? Either situation is extremely bullish for silver. Since silver has proven to be a rare "Giffen Good" where demand actually increases as price increases, this overwhelming investment demand is just another, very strong indicator of future price.
But if the U.S. mint is having so much trouble finding silver that they have to suspend sales, how on earth can the SLV find and secure 18.4MM ounces (572 metric tonnes) in just one day?? ( http://www.zerohedge.com/news/2013-01-17/slv-etf-adds-record-572-tons-silver-one-day-more-all-2012) Pretty amazing, huh? Let's see, you can only load and transfer about one tonne at a time, maybe two if your truck is big enough. But the logistical magicians in the Custodial Department of JPM are able to transfer 300 truckloads in a day. Wow! No wonder they make the big bucks!
Even more amazing is the fact that this (alleged) addition brings the new silver added to SLV up to 650 metric tonnes, year-to date. On 1/2/13, the total tonnes in trust were 10,085. As of last night, the number was 10,735. That's an increase of 6.44%.
More amazing still is the fact that these (alleged) additions have taken place while the GLD has seen a huge drawdown. On 1/2/13, the total gold held in the GLD was 1348.92 tonnes. As of last night, it was down to 1332.61. That's a drop of 16.31 tonnes or 1.21% in just the past two weeks. So, silver is magically appearing while gold is disappearing. Hmmmm. What do you make of that? The most obvious answer is that it's all just a big charade and scam, but, what do I know? Who am I to question something that seems so obvious? I'm sure that everything is completely on the up-and-up. That JPM is custodian for SLV and HSBC does the same for GLD only inspires confidence, right? Right???
Back to silver, a Turdite named "Ballyale" graciously shared with us an interesting, if anecdotal, tale last week regarding his interactions with Apple and their production delays in producing Imacs, etc. Ballyale speculated that these delays were due to the current scarcity of available silver (though it's clear that plenty is available for the SLV). The good guys over at SilverDoctors took the story and ran with it, today producing a post that neatly sums it all up. I encourage you to read this thoroughly. http://www.silverdoctors.com/is-ted-butlers-silver-panic-imminent-apple-contractor-claims-new-imac-production-delayed-over-silver-shortage/
And this is fun. Jeff Nielson at BullionBullsCanada has written another excellent and well thought-out piece on silver manipulation and he discusses it in the context of platinum which, as you know, we are currently watching very closely here at TFMR. (Retreating from its fourth attempt at $1700 as I type.) Please read this article and support Jeff's site. He's a good dude and he works very hard, trying to expose and publicize the manipulation. http://www.bullionbullscanada.com/intl-commentary/26043-platinum-market-illustrates-silver-manipulation
Then there's this. On Wednesday I received an email from a longtime Turdite. I found it so alarming that I immediately wrote him back to ask if I could share it with the entire community. Thankfully, he obliged. Presented below without comment. Please give your full consideration to this, too.
Thank you again for your dedicated service. I'm a daily reader and a big fan.
I wanted to take a minute and share with you a very scary experience I had yesterday (Jan 15). I keep a portion of my rock collection at JP Morgan Chase in safety deposit boxes. This has been my bank since I moved to this town, I have had these boxes for nearly 10 years. Several years ago I was given 2 of them for "free" as a thank you for the various accounts I had with this branch. There seems to be quite a bit of turnover at the retail level and the branch manager that gave me these boxes left 2 years ago. I have been to the bank many, many times since then and got to know the new people to a lesser degree than the previous manager. I confirmed with the new manager that the same arrangement was in place, she agreed.
Yesterday I went to my JP Morgan Chase branch to make a deposit and touch my collection as I often do. The teller looked puzzled and said "We've been looking for you!". My address hasn't changed, my phone number hasn't changed and they volume of junk mail/account statements sent by them hasn't changed. "We've been sending you letters for the last year about your boxes, they are going to be drilled on 1/31 with the contents sent to the State of *******. Once they go to The State, it can take up to 2 years to get your property back after you pay the levies, fines and fees". Needless to say, the blood ran out of my face. The teller explained to me that my payments were past due for the boxes and it was their policy to drill the boxes and send the contents to The State after a year. Needless to say, I stopped caring about the deposit and began moving the contents. She assured me that she would wipe the issue clean and we'd be fine so I wouldn't have to move anything. Yeah right, my pockets and quickly emptied briefcase nearly gave out as I left 20 minutes later.
How is it that I 5 pieces of mail from The Morgue each week but not these critical pieces? How is it they'd just drill the lock and send the contents away (probably in the trunks of their cars to their homes) when my phone number and address is the same as it's been? Why would they not just call me? Maybe just debit my account which they do for the other boxes and nonsense? I know most of these people by first name and they know me the same. I often see these people at Starbucks and the grocery and we exchange handshakes and pleasantries. Nice.
I thought that some of the collection in The Morgue wasn't a bad idea for diversification's sake and that they're probably the last to go as an organization so it was safer there. Wrong!
Here is just another example of why not to trust banks and why not to let phyzz out of your control.
Keep doing what you're doing and we'll keep stacking and thanking you for your sound guidance daily.
Next, Jim Quinn has a great, new piece that you should be sure to read over the weekend: http://www.theburningplatform.com/?p=46625
And, finally, the charts. I'm delighted to report that both gold and silver look terrific on their respective dailies. Yesterday's failed raids only made them look better in that both metals were able to paint bullish, engulfing candles, too.
Today, both metals are dealing with horizontal AND moving average resistance (silver 50-day is $32.03 and gold is $1697) and this has momentarily stalled the advance. Additionally, we've got a 3-day weekend ahead here in the U.S. and that usually means that there are more sellers than buyers hanging around. That's OK. I'm confident that we'll put these levels behind us early next week and then we'll move on to The Big Test. This event, subsequently known as "TBT", will set the stage for the rest of the spring. IF the meals can pass this test...meaning IF the metals can break resistance and get above all of their respective moving averages...the stage will be set for a very strong rally. Could it be a repeat of 2011? Possibly. Many of the same conditions exist (ongoing QE, tight supply, strong demand, etc). All I know is that nothing happens until and unless the metals pass TBT. For now, sit tight and watch. Get ready for some fireworks and unnerving volatility. But, be optimistic for there is much to be excited about.
OK, that's all for now. Please be sure to check back later as I will be releasing a special and very important podcast dealing with the German Gold story. I'll also have some thoughts on this week's CoT, once it's released at 3:30 EST.
Have a great day and a relaxing weekend. Get ready for next week and the start of TBT.