Re: Tonight. I Have No Idea.

Sun, Aug 7, 2011 - 1:26pm

It's Sunday in the U.S., a little after 1:00 EDT. The Globex opens in about five hours. There seem to be quite a few people who are interested in my opinion regarding how the metals will trade tonight and tomorrow. Frankly, I have no idea.

First of all, I've been on the record saying that I didn't think a ratings downgrade was coming. Oops. Shows you what I know. I am still stunned that it happened. Of course it needed to happen and AA+ is still too generous. A or A- would seem to be more fitting. However, since there is no principal risk in U.S. government debt (the Fed can print all the money they need to pay off bondholders), AA+ is OK, I guess. Now on the other hand, if S&P started taking inflation risk into consideration and began to factor in that you're really only getting 50c on the dollar back in principal purchasing power...well, lets just say that U.S. debt would be relegated to junk status. Regardless, U.S. debt is now rated AA+ and the effects of this will be far-reaching. We'll go into this in greater detail later this week when I have more time and can think more clearly. (For now, I'm a little hung over and I need a nap.)

As it pertains to the PMs...There is NO WAY that this news is not bullish. Extremely bullish. In the intermediate and long term. What you don't know about is tonight and tomorrow. As we saw last week, when everything else is being sold, the PM "baby" often gets thrown out with the bathwater. Gold should open UP at least $50. It should trade UP $100 tomorrow. Will it? Again, who knows? Gold may open higher and then get instantly battered lower in a global rush for liquidity.

Just watch. U.S. debt gets downgraded but the POSX and the long bond will both probably trade higher in a flight to safety. Oh well, it doesn't really matter. Like I said, gold may be down tomorrow. Who knows? But what I do know is this: Gold will be higher a month from now. It will be higher six months from now and it will be higher still a year from now. In that context, what happens tonight is of no consequence.

I'll try to have an update this evening, after things have been trading for a while. Until then sit back, relax and enjoy the fireworks. TF

11:55 pm EDT UPDATE:

Too tired to type but I wanted to give you this update with these levels to watch overnight and into Monday.

Turd nite nite now.

About the Author

turd [at] tfmetalsreport [dot] com ()


Aug 7, 2011 - 2:12pm


I stand by my prediction.

Interesting note from APMEX.

*Attention – Due to the uncertainty in the global precious metals markets, we will not be able to accept any additional orders until the global markets re-open in Asia. We expect to be accepting orders around 6:15 pm EST. Sunday August 7th, 2011, following the market open.

So It Goes
Aug 7, 2011 - 2:13pm

A global view from Martin Armstrong

This is an interesting global view from Martin Armstrong's most recent note. "The Doom & Gloomers are cheering S&P’s downgrade, but in reality, it will have no real affect in the total mix. The dollar is the RESERVE CURRENCY and lowering the credit rating normally means higher borrowing costs for the debtor nation. However, as I have pointed out, about two-thirds of central bank reserves are in dollars thanks to the residual of Bretton Woods that is alive and well. The size of the US debt and economy along with its deep capital markets plays a crucial role as the cornerstone of global finance and this simply cannot change absent revising the entire world monetary system. S&P’s decision shows how unsophisticated they are and the decision was highly parochial. It cannot change the demand for dollars since everything trades in dollars. So no matter how much China and Russia complain, oil, gold, wheat and just about everything else trades in DOLLARS because it is the RESERVE CURRENCY!" This does not speak to the price of the precious metals - they are going higher for sure - but he does make a great point about how the whole system will have to change from a global point of view. Keep stacking.

Aug 7, 2011 - 2:15pm

more from that same Ted Butler Article

It is precisely for nervous times like now that precious metals investors bought gold and silver in the first place. Therefore, it is illogical to predict that gold or silver should sell-off. Yet, that is exactly what may occur, especially in silver. That’s not a prediction, mind you, as if silver does sell-off, it should represent a compelling buy and I do plan to personally buy speculative longs in that event (especially call options which I started buying Friday.)

He usually cautions against using any leverage, interesting!

Aug 7, 2011 - 2:16pm

Interesting Spreads on Gold

I use bullion vault. They trade 24/7 no down time. This weekends spreads are shocking

Its useful to get a heads up on how this niche marketplace is reading the open.

Prices in USD first = Sell NY | Buy NY | London sell | London buy | Swiss sell / Swiss buy

1,667 1,821


1,804 1,679 1,711

C&P sucked.

Red Pill
Aug 7, 2011 - 2:27pm

It's ok Turd..

You don't have to know everything, nobody can know what's coming, this is absolutely uncharted territory.

could be black monday, or a big anticlimax, a metals moonshot or a brutal caning.

just keep doing what you do so well ;)

Aug 7, 2011 - 2:29pm

...paper is paper...

The Revolution has already begun in Europe...

Video unavailable

I thought that WW III started in August 2002, and the global revolution started on February 15th, 2003 (peacefully, I might add) but then I turned on the TV, and realized that most Americans are barely aware that a global depression has begun. As designed.

Ol' Michael

"...paper is paper and money is money..." - Thomas Paine

Aug 7, 2011 - 2:30pm

ZH take on metals open, from the sellers point of view.......

Which I find intriguing. The S&P is the youngster that exclaimed "The Emporer has No Clothes!" for many the thought had never crossed their minds in our modern day version. But for a % of more well informed investors,(readers of this site) the thought process's follow along the lines of "I never thought they would do that!" My first thought was WHY? Wall Street ignores facts like this all the time, politicians both ignore and deny. The great masses of citizens(baaaa, baaaaa)do not even understand how this is a problem if they understand it at all. So, why was it done, and more specifically why was it done now? I have entertained the thought that the EE would create as much chaos and instability as possible with their money powers throughout the world to come out on top once again when the mess overwhelmed the world, and Then "reset" things so to speak from the catbirds seat. If you think about the consequences to date, the Euro "competing" currency is on the ropes. Germany, the sugar daddy of Europe, is cutting the money off. How long before dissolution of the Euro, and chaos in the Eurozone. In the beauty Pageant of currencies, the ugly Dollar is the best "date" for now. (I know, Swiss, new Zealand) but Dollar still commands sizable market. It seems like the scene on the deck of the Titanic, as the passengers run to and fro seeking the high ground. Any thoughts?

Aug 7, 2011 - 2:31pm

Stocks down PM up

This feels like another case of stocks (including PM stocks) down and PM up...

Aug 7, 2011 - 2:31pm

I hear that TURD

(For now, I'm a little hung over and I need a nap.)

I am as well got trashed last night Turd lol relaxing big time.

Bay of Pigs
Aug 7, 2011 - 2:33pm

Sinclair interview

For those who missed this on the last thread. My advice is to send it to everyone you know, especially your family.

Jim Sinclair interviewed by James Turk

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