Another Winner!

Mon, Jul 18, 2011 - 10:29am

I've got the re-crossing of $40 silver at about 3:09 EDT last night. Someone just won another autographed yellow hat. But who? I have no idea, frankly. I know someone out there in TurdLand has a spreadsheet of all the picks. Please post the winner in the comments section of this blog.

Our precious precious metals are sure looking fine this morning. Copper, crude and the grains are all down so it is clear that the world is looking at the PMs as safe haven plays...which they are. It's nice, too, to see that silver has shrugged off the "commodity" tag and is soaring alongside gold. Look for this to continue.

Now that silver is back above $40, look for the big money that left the pit back in May to come pouring back in. Not right away but in stages. IF silver can hold its position today and close above $40, the stages will be set for a run toward 42-42.50. It may briefly pause there before continuing higher. A close through $43 will force more dollars off of the sidelines and back into silver. Like April, we will likely see an accelerating move toward 48 and even 50. Do not think for a minute that the Forces of Darkness won't try everything in their power to paint a double-top at/near $50. Be very careful as price approaches that level. However, that's a topic for another day. For today, just enjoy the fact that silver is back above $40 and looks poised to mount another run toward 50 and...eventually...beyond.

Of course, gold looks fabulous, too. Hanging in there just above $1600 as I type. The simple fact that raiding and profit-taking at the psychologically significant sixteen hundred level hasn't occurred is interesting. If gold stays above 1600 for another hour or so, you may see buyers gain confidence that a quick drop will not be forthcoming. IF this happens, gold should skip away toward 1610. In either event, this is big news! Gold above 1600 is headline-grabbing material and it is sure to attract attention. It will help provide bids for the miners and it will provide spillover strength into the silver pit. A virtuous cycle, so to speak. Let's watch and see.

Have a great day. Rejoice and be happy. We are winning! TF

About the Author

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Jul 18, 2011 - 3:56pm


Look's like I was a great big dumbass for not jumping in at $33-50. Let down by the Doldrums Whipsaw.

Jul 18, 2011 - 3:55pm

So, does everyone think that

So, does everyone think that without the debt ceiling being raised that there is no QEIII? Is the sole purpose of the debt ceiling being raised so that QEIII is a go? Is this why Obama is so hell bent on getting the debt ceiling raised?

Jul 18, 2011 - 3:42pm
Eric Original
Jul 18, 2011 - 3:35pm

A wee bit o'shiny in the mail

Blew my ebay bucks on a Swiss 20 Francs and it came today!!

.1867 troy ounces of :D

Jul 18, 2011 - 3:35pm
Jul 18, 2011 - 3:30pm

Tesla ... We Are

nut jobs and butt flesh

Murphy .... checked the chart on Libya and you are correct .... #24

143.8 tons ........ 5.6% of net assets .... lots of oil though .... if they won't borrow from you bomb the crap out of them and just take it .... all in the name of Democracy of course

Doc .... you are probably right about Spain going first as they have less gold than Italy and should fall first .... I will take the other side of that trade though to give you a chance to get even .... are you in?

Jul 18, 2011 - 3:20pm

speech, speech, speech,

This is when the crowd begins chanting speech! speech! from the man in the yellow hat. Emerging from backstage Turd appears with a bottle of bombay in one hand, a monte cristo in the other. I bet we will be seeing a lot more traffic in Turdtown just based on the post about silver prices in google trends, which should hopefully translate to more clicking of advertisements and well deserved gin monies to the turdmeister. Thanks for giving us this site sir! Without your insight and commentary many including myself would be lost in this market that seems more nutty than a almond joy. Keep it up!

Jul 18, 2011 - 3:15pm

With gold hitting new

With gold hitting new all-time highs and silver hovering around $40, a trader out of London told King World News today, “The all important thing to watch is the pit close (Comex). If we get a pit close today in the US above either $1,600 gold or $40 silver, then you are going to see some huge capitulation by the shorts. $40 silver is the trigger, there is a significant amount of money which did not want to enter the silver market until it cleared $40.”

“So you essentially have two critical factors to watch if we get a strong close today in silver. A close today above $40 leaves those stops highly vulnerable to getting tripped (they will cover their shorts). In the meantime you are also going to get funds who have been out of the silver market popping back in once it closes above $40. These two competing buyers could create a quick and somewhat violent short-term move to the upside.

Right now silver is looking very bullish because the open interest is so small. It appears there is a lot more room on the upside for silver vs gold because of the current structure, but I am not saying gold is anywhere near the top.

A close above $1,600 on gold, similar to silver closing over $40, would create a huge bunch of short-covering. The commercials have been adding short positions in gold, but should we get a close above $1,600, I think you will find the smaller of those shorts are going to start covering their shorts because it’s going to be too much pain. This could result in a $50 move overnight.

There is plenty of physical demand, no one is letting up....

“but there has been a slight reduction in demand out of Asia as the price of gold has been rising recently. There have been a few discounts going on since gold pierced $1,580 (US), but nothing significant. However, silver demand out of Asia has been staying extremely strong.

Don’t forget we have option expiration in gold taking place in eight working days. There are about 2.3 million ounces of short bets sitting at $1,600 and currently there are only about 1.5 million ounces in registered inventory. If these call holders in options, and there are still about 24,000 of them as of Friday, if even a chunk of those stand for delivery you will see some real fireworks to the upside.

You can expect war at that point because that’s too big a bet by a couple of small entities, and even though they will shoot themselves in the foot on a short-term basis, they will not be able to come up with the metal without driving the price of gold through the roof. So I would say expect a bit of a war at the $1,600 level as we hit option expiration and shortly thereafter.

So prices could explode to the upside and I think silver could easily jump up $2 or $3 from here in the blink of an eye. Again, if we get a close above $40, that kind of short-covering, plus new investment, we could get $2 or $3 to the upside easily in one session. I would add that this would also cause additional pain for anyone on the wrong side of that trade.”

Jul 18, 2011 - 3:11pm


Wow - nicely crystallized into words!

What you said in that the value numerically doesn't matter to the guys controlling the credit and printing the money. The plot reads like a comic book almost. No wonder normalcy bias has 99% of the humanoids disbelieving. Evil villains, good vs evil, centuries old conspiracy stuff. I even laugh at myself sometime (until I read the news) what else can this stuff add up to?

Jul 18, 2011 - 3:03pm

European Crisis: Just a brief

European Crisis:

Just a brief note. I was watching Bloomberg last night and they were talking about when the bailouts happened for Greece, Portugal, and Ireland. Well I guess it happened when the 10 year went to 7%.

The reason I mention this is they thought that with Italy and Spain (both pushing 6% right now) that it wouldn't be long before the bailouts happened for them at 7%. Just something to watch for soon.

Also, my money is on Spain reaching that first because 5 banks failed the bank stress test in Europe. 1 being in Austria. The other two in Greece. 8 total. Well, we all know this is a farce to begin with but it just might show how bad off Spain really is.

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