Re: Tonight. I Have No Idea.

492
122
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.

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  492 Comments

Haole
Aug 7, 2011 - 3:14pm

Turd, even when you claim to have no idea...

... your commentary is gold. Thank-you on the eve of what could be a spectacular week. Good luck everyone! Damn I love this place...

Bay of Pigs
Aug 7, 2011 - 3:15pm

@DPH

Yes. The Morgue ever closes those shorts out and/or the COMEX implodes, the price of gold and silver could easily double overnight. I know that sounds crazy, but it could happen. The PM Lifeboat is very tiny.

Shill
Aug 7, 2011 - 3:16pm

Respectfully

I finally accumulated enough that it was worth getting a safe deposit box at a local bank.

Unwise. Read your history sir, when and if a bank holiday is declared your PM's will be confiscated as all safe deposit boxes will be emptied. Not Tin foil hat drama, at this stage anything is possible.

Be well

Dr Gcpnscarlet
Aug 7, 2011 - 3:16pm

I agree with the $1700. My

I agree with the $1700. My guess is that we see gold up $50 within 10 minutes of Sydney/Asia opening, and silver up $1.50. What I don't know is what will happen for the brief time when Globex opens prior to the foreign trading. THAT will be an interesting 30 minutes.

jlee2027
Aug 7, 2011 - 3:19pm

1764 Gold

Santa says that is the key Gold number, the price rises possibility goes exponential after that. One would think Silver will ride along, like a rocket with Gold. And when Silver hits 60-70 one would also think the short positions have no choice but to cover...or go bust.

We could see hundreds of dollars an ounce for silver in the very near term. Probably won't happen, but possibilities keep rising. Eventually it will happen.

stoneeh
Aug 7, 2011 - 3:21pm

I don't care

My physical stays where it is and so does my paper position since I don't play around with much leverage and I don't have to react to a few % changes. And if my paper profits vanish, who cares?

Bring it on and let the world end. Let them have it. Everyone who has taken part in this completely amoral, antisocial, superficial society deserves exactly what is coming their way. The only ones I have pity for are the children, who were not yet offered the chance to not take part in our system/society. They are innocent and they will suffer. As for everyone else, you have looked the other way from enough injustice you could have helped prevent to deserve every bit that is coming to you. I hope a lot of people will soon find themselves under bridges, starving.

- Markus

Magpie
Aug 7, 2011 - 3:22pm
jlee2027Bay of Pigs
Aug 7, 2011 - 3:23pm

@Bay of Pigs

@DPH

Submitted by Bay of Pigs on August 7, 2011 - 3:15pm.

Yes. The Morgue ever closes those shorts out and/or the COMEX implodes, the price of gold and silver could easily double overnight. I know that sounds crazy, but it could happen. The PM Lifeboat is very tiny.

​Jesse (https://jessescrossroadscafe.blogspot.com/) in his archives once posted the possibly of a 50x overnight increase when COMEX falls. There just isn't enough metal, compounded by the derivatives. Add in panic...

I know I know. But we can dream can't we?

ewc58
Aug 7, 2011 - 3:26pm

Gonna be a HOT time in the old town tonight!

They're gonna be taking a high number of G7 finance ministers and central banksters off the playing field on those whimpy-ass Soccer stretchers...

G7 Preparing Statement To Support Dollar, EU, In Fact Everything That Would Otherwise Collapse Tomorrow, Before Asia Open

Submitted by Tyler Durden on 08/07/2011 13:40 -0400



Just out from Bloomberg: Finance ministers and central bankers are preparing a statement to release before the open of Asian markets, the Nikkei newspaper reported, without citing anyone. Japan may intervene in currency market if dollar falls. G-7 finance ministers, central bankers expected to express confidence in dollar, pledge liquidity. U.S. to explain fiscal rebuilding efforts." [so no more sniping at S&P and actually doing its job eh?] "Japan to express intention to maintain Treasury holdings. G-7 expected to show support for EU fiscal efforts." And while the G7 is about to realize that when faced with a $100 trillion (equities plus debt) market onslaught its printing powers are next to laughable, Dow Jones reports that the "ECB is weighing Italian, Spanish bond buying on a massive scale." Two take homes: i) the Fed has just lost its competitive advantage of doing idiotic things on a massive scale as the world wake up to tits trickery (unless of course the Fed resumes said thing on a massiver scale, which it will), and ii) tomorrow is the day when the infinite force of central planning meets the immovable object of capital markets. We will find out who blinks first in a few hours.

dmunjal
Aug 7, 2011 - 3:26pm

Short squeeze

There were a lot of folks shorting gold and silver on Friday who will be forced to cover on Monday. This could be the mother of all short squeezes. I'm predicting a 1700/42 close.

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