Surviving Gold Opex
As I tried to warn two days ago, gold has been summarily beaten by The Forces of Darkness as we approach Feb13 option expiration on Monday. Hang in there. It's almost over.
If memory serves correctly, I gave you 1660-1670 as a floor for gold and I'd hoped that 31.60 would hold in silver. Mehhh...we're hanging in there. Though other analysts might have you believe something different and even ZH is getting in on the act ( http://www.zerohedge.com/news/2013-01-25/what-happened-precious-metals), this is nothing but Cartel shenanigans attempting to manage price ahead of option expiration. This chart was posted Wednesday by Turdite "JustAnotherLurker" and it pretty much tells you all you need to know.
One glance at the chart above and you can quickly decipher The Cartel "sweet spot", somewhere between 1665 and 1670. No wonder, then, that today's price action is centered there. Look for that to continue Monday, too.
Silver has, of course, been taken to the woodshed along with gold as JPM et al use any possible weakness to exploit price lower. This has nearly run its course, too, though there still exists the possibility that silver could briefly fall to near its 200-day MA early next week. IF it does, BTFD.
A couple of other, random items of which you should be aware...
LOTS of interesting chatter about Fed/ESF interference in the global bonds markets and how this is affecting current economic relationships. As you know, I fully expect a gold-backed renminbi to soon be offered as an alternative currency to the U.S. dollar. The only issue is when. Developments like this certainly move the ball down the field: http://uk.reuters.com/article/2013/01/24/uk-britain-yuan-idUKBRE90N11520130124. And then you've got this idea being kicked around, too:
When it's all over and the pundits, media and analysts are all shaking their heads at how they could have failed to anticipate and connect the dots, you my dear reader will simply be able to sit back and relax, knowing that you had been forewarned.
I don't know if the current beating has violated any of this fellow's charts, but here's some traditional TA from a guy at Minyanville who think that silver is headed to $77 quite soon. Works for me! http://www.minyanville.com/sectors/precious-metals/articles/How-Far-Up-Could-Silver-Go/1/22/2013/id/47549#ixzz2ItjznLPx?refresh=1. And here's his chart:
And for your weekend reading pleasure, here's the latest from Jim Quinn. He sent it to me Wednesday but I haven't had a chance to publicize it until today. ZH picked it up, too, so you might have already seen it. Regardless, I thought I'd add the link today in case you'd missed it. http://www.theburningplatform.com/?p=47568
And the "Race to Debase" continues in earnest. What's-his-bucket, Yamamoto(?), said the other day that he wanted to see the yen trade all of the way down to parity/par with the dollar. Starting to look like he's going to get his wish. Having failed at 1.11 and slipping through 1.10, could 1.00 be coming??
Finally, just two thoughts on the big ETFs. First, I asked our pal Andrew about the enormous, alleged addition to the SLV last week. He confirmed that it did, indeed, happen. 18,000,000 ounces collected, over time, and deposited into the vaults. The main question now is: Why? Why the rush to repay and reload? And then chew on this: Why the additions to SLV (silver in trust - allegedly - is now up almost 7% YTD) while the GLD is being raided for gold? Yesterday we saw another 2.4 mts of gold get sucked out. This leaves the fund at 1331.71 mts versus a 1/2/13 level of 1349.92 mts. Hmmmm...Over 18mts gone in the last three weeks, all while price has been rangebound between 1630 and 1690. Again, hmmmmmm........
OK, that's it for today. I hope you have a great weekend and please check back later this morning or afternoon for a very important and significant "sticky" post. You'll definitely want to read it.