Not So Happy Tuesday

Lots going on today and I'm off to a late start so let's dive right in.

First, let's talk about the price action today. After the surprising rally yesterday, I asked you to watch the Asia and London trade for clues to the Comex action today. What did we see? After a flat Asian session, the London Monkeys did their usual thing from about 2:00 am EDT on. The London Monkeys have now acted on 14 of the past 17 days. Check this chart from Ranting Andy:

The result was a giveback of more than half of yesterday's gains.

Why did we see this? Hard to say for sure but, with volume light ahead of the BLSBS later this week, I suspect that a lot of this was some Bullion Bank selling that was aimed at lessening some longs ahead of the CoT survey. No doubt the action since last Tuesday is a continuation of the trend of last week's report. Therefore, the banks tried today to lighten a few of the longs they had built up over the course of the week. This also serves the dual purpose of defending the 20-day MA and restoring some confidence to some of the shaky spec shorts. At any rate...we're down a modest $13 as I type. Let's see what tomorrow brings.

Speaking of the CoT, there has been some excellent analysis written in the past few days so I thought I would highlight some here. Again, the positioning of the Commericals vs The Specs has gotten so extreme that it has reached historic levels. Ultimately, how you interpret this depends upon just whom you think is really in charge. Is it The Specs or do The Cartel Banks lead The Specs by the nose into whichever position they would like? Let's start with longtime CoT-watcher Gene Arensberg: http://www.gotgoldreport.com/2013/05/gold-and-silver-disaggregated-cot-report-dcot-for-may-31.html

Next, read this link over at KWN: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/6/4_This_Amazing_Chart_Shows_Gold_Set_For_Massive_$1,000_Spike.html. While we might disagree that this chart alone shows that "gold is set for a massive $1000 spike", the interview is helpful and in contains this excellent chart. (Click on it to enlarge.)

Reading that article inspired the Turdite "WildStyleChef" to create the chart below. This shows graphically how Commercial positioning is inversely correlated to price. (Again, click to enlarge.)

OK, moving on. I found this to be interesting. Recall that when the Dutch bullion bank, ABN AMRO, announced their plan to settle in cash a few months back, many of us called it a default. http://www.tfmetalsreport.com/blog/4667/gold-delivery-or-default This article published Friday follows along with that theme. I don't know anything about the author but that's OK. He probably doesn't know anything about me, either. http://www.jcaschipper.nl/2013/05/nationalized-abn-amro-offers-fools-gold/

Still lots of talk out there about Fed QE "tapering". Again, I think is all silly and it may be a non-topic as soon as Friday at 8:31 am. Regardless, as mentioned last week, even if The Bernank was to announce some type of "taper", it would likely come from the $40B/month MBS-purchase side of the QE∞ equation. The Fed could still monetize $45B/month in treasuries directly while cutting the Primary Dealer kickback life support handout welfare bullshit MBS purchases to $20B/month. This would still be $65B/month in QE and silence all the hawks. Not saying that it will happen, just saying that even if it did, it's no big deal! $65B/month is still nearly $800B/year in fresh greenback, created from whole cloth for the purpose of sustaining The Great Ponzi. Read more at ZH: http://www.zerohedge.com/news/2013-06-04/chart-day-feds-taper-perspective And here's how it looks graphically:

Finally, I don't know if you've noticed but lately there sure have been a lot of big mines that have been taken off-line.

So, now, what to make of all this? Well, if you believe that everything is hunky-dory and that there are no supply issues in gold, then this is no big deal. After all, even though The Grasberg mine is the largest in the world, it still only produces about 30 metric tonnes per year or a little over 1% of all global mine production.

If, on the other hand, you think that the Bullion Banks are living hand-to-mouth and frantically trying to keep their Fractional Reserve Bullion Banking system alive, then it is a big deal. A very big deal.

That's a lot of gold...a lot of currently anticipated and expected supply that isn't coming. How much of this production was already sold forward into the market? And if it was already sold forward, what happens when it fails to materialize on schedule? Hmmmm. Could that lead to those contracts being covered? Could it lead to some new long purchasing as a hedge against supply delays, not only from the suppliers but from the end-users, as well? And with the current CoT structure in gold being akin to an overgrown and dried out California ravine just waiting for a spark...

Let's just leave it there for today. I hope that the rest of your Tuesday goes well and I look forward to seeing what tomorrow brings. Again, if I'm right about the cause of today's drop being Cartel CoT-positioning, then we should see a bit of a bounceback on the Globex and overnight.

TF

171 Comments

¤'s picture

(((echo)))

If a tree falls in the woods, does it make a sound?

Of course it does.

But.....what if it falls on deaf ears and no one is there to see it or cares about the noise?

Therein lies the answer.

Xty's picture

Speaking of Witless, and as I seem to have the floor to myself

here is a picture of Witless Bay, Newfoundland, where I had the great pleasure to be last week.

Hammer's picture

ADP numbers poor. Dollar down

ADP numbers poor. Dollar down and au goes up.

margaritatime's picture

xty - beautiful

i found myself in the grace of Moab, UT climbing part of last week. it makes everything else pretty insignificant if you ask me. those are the important things in life!

monedas is a hateful little crumb, don't offer your intelligence or time to it. it will die a lonely, isolated, incomplete person.

ag1969's picture

Gold Going to More of a Sound Money System - Catherine Austin Fi

Catherine Austin Fitts, founder of The Solari Report, points out the world is buying physical gold. Fitts contends, "What that means is there is going to be a much more broad-based bull market in gold. . . I think it's going to more of a sound money system, and gold is going to be a part of that." Not everybody wants to be brought into the so-called new world order. Fitts predicts, "Remember, to come out with a one world currency, you need everybody. There can be no leakage. There can be no exceptions. The Russians are determined to be the stinker at the party is what I think." Join Greg Hunter as he goes One-on-One with investment banker and money manager Catherine Austin Fitts.

Turd Ferguson's picture

Sorry, Xty

MODERATOR

I can't catch everything. I'll look for the comment and review immediately.

argent rampant's picture

Turkey

An exhaustive and excellent article from the New Yorker for anyone who has the desire, and the patience, to read it. It really makes clear what is at stake in Turkey's political turmoil. This is the kind of stuff American journalism needs to do more often.

http://www.newyorker.com/reporting/2012/03/12/120312fa_fact_filkins?currentPage=all

Turd Ferguson's picture

Xty

MODERATOR

I read that as wanting Victoria's parents shown the guillotine...but it is over-the-top, nonetheless.

Monedas is now on full moderation.

Excalibur's picture

Xty is the pearl. You know

Xty is the pearl. You know who the grit (or crumb) is.

Edit: Moderated grit. Hat tip to the host.

Ned Braden's picture

@ XTY....Monedas IS an Idiot

and wastes a lot of bandwidth with comedy jihad drivel.

I put him on ignore long time ago.

tyberious's picture

@Ned

Not to jump on the bash Mondas bandwagon but I had him on ignore first! LOL smiley

opticsguy's picture

@tyberious

why can't he spew his stream-of-consciousness BS on Zerohedge's site?

Mad5Hatter's picture

Not

to take any any thing away from the cat, she is a big big heavy with a global view, but will make one comment for turdville. Her post at watch dog, is after the date of Bill's appearance, yours truly, posting herein, where Politics was identified as the answer.

Turdville backslapping hat tips are accepted.

http://usawatchdog.com/us-back-to-a-gold-standard-catherine-austin-fitts/

Urban Roman's picture

A Libtard

... to remind Turdites to use the IU button liberally ...

Libtard

Urban Roman's picture

@ Karankawa,

Just watched the K. Hudes interview you posted a page ago. Courageous lady. 

I hope she can keep it together until the cavalry arrives.

Hope.

That's all there is, in the end.

achmachat's picture

Monedas on full Moderation

Whoa.. does this mean that Turd has to*read* every single Monedas post now, and decide if it's offensive or not?

This sounds to me like a full-time job!

Cononish1314's picture

Monedas meltdown

Missed this while I was out tending the tatties and onions. (It'll probably be the same with the gold revaluation.)

What's he got against French-Canadians?

And, while we're off the subject, what "monedas" would the Quebecois use if they became independent?

Turd Ferguson's picture

Data getting worse

MODERATOR

Let's see what happens Friday, however, it was yours truly who first speculated a week ago that this week's BLSBS would be "disappointing" to the econobulls.

http://www.zerohedge.com/news/2013-06-05/labor-costs-crash-most-four-years-manufacturing-compensation-plummets-7

tyberious's picture

Data

Until the banks can lend, which they cant because they are dead, the economy will simply not improve!

Mad5Hatter's picture

Easy

on the Jidhad comedian, loose cannons are the hall mark of very high intelligence, and it just gets fired off time to time, from to rapid associations of the brain function, especially where fun is totally involved. Hes a keeper.

Speaking of the fitful Cat

Marblesonac's picture

Just went to Turdisms

To see what your "double secret probation" really meant.  I didn't find it but, I watched the movie of how you got your "handle",  hilarious!!!

Highly recommend everyone check it out.

tyberious's picture

Caterine Austin Fitts

Great interview!

El Gordo's picture

Mondeas sees things...

...through a little different lens, but I doubt he's got a mean bone in his body.  If we can't stand a little ribbing now and then, coupled with an occasional brush of the truth, then something is missing.  I'm an old, ugly, fat, ignorant slob, but I can lie drunk in the gutter and still look down on some others.  If someone wants to offend me, they will have to try pretty hard, and I for sure don't need the rest of Turdville trying to come to my defense.  That's the kind of stuff liberals do.  Just say "no" to censorship unless it's truly hateful or vulgar.  Just my $.02.

Marblesonac's picture

El Gordo

The bullying that Monedas did to Katie Rose was "truly hateful".

His shit should not be tolerated.

ancientmoney's picture

No Fed-head can be another Volcker

This snippet made me think about the differences between then (Volcker) and now (Bernanke):

"The last central banker who had the cojones to take on Wall Street was Paul Volcker. Ben Bernanke, as well as his predecessor Alan Greenspan, have been nothing but nice to the speculating and borrowing classes."

http://detlevschlichter.com/2013/06/are-central-bankers-losing-control/

--------------------------------------------------------------------------------

It dawned on me why Bernanke cannot be like Volcker.  When Volcker was Fed-head, the bankers could not speculate in the markets due to Glass-Steagall.  Volcker punished the little people and business by raising rates.  And, the size of government debt was nothing compared to today.

Today, the ones punished would be the banks, who own the Fed.  And, the government of the U.S. with the largest debt in the history of the world.

There is no graceful way out of this mess.  Gold will, no, MUST come to the rescue of bankers and governments.  Will it come peacefully or through chaos?  That is the only remaining question (other than when).

Turd Ferguson's picture

Rand via Santa

MODERATOR

wow

Whenever destroyers appear among men, they start by destroying money, for money is men’s protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it bounces, marked, ‘Account overdrawn.’ 
–Ayn Rand

 
Bsong's picture

Free Monedas. If the EE is

Free Monedas. If the EE is to be defeated thick skin and ideas enter from left field tour.

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