Chugging Forward

Thu, Aug 18, 2011 - 6:55pm

In the commentary this morning, I mentioned how important it was for gold to close today above the highs from Wednesday of last week. It did it! When you consider that today also invalidated the "outside reversal day" that was painted last Thursday, you're left with an extraordinarily strong picture and one where gold is looking to head much higher from here.

That may sound hard to believe. The MSM is full of know-nothings and Disinformation Agents who are working overtime to convince you that gold is in a "bubble" and fraught with risk. This is complete nonsense. Look at the chart below:

This is an orderly progression of eager buyers who are using almost any weakness in price to accumulate positions. I've circled the only time when things got disorderly. The C/C/C brought that to a screeching halt with their margin hike last week. This week, it's right back to the same, steady drumbeat we've been following since early July. So, how far can we go from here? I don't know. In uncharted territory, it's virtually impossible to predict technical resistance. Let's look for two things:

1) Another short term buying climax like we had last week. This will be characterized by similar volatility.

2) Santa's next couple of "angels". The next one is 1849 and the one after that is 1936.

From here, I expect flat to higher gold overnight as global stocks and the ES recover some into the early trading hours tomorrow. However, like last weekend, ask yourself this: Would you rather be long stocks/short gold OR short stocks/long gold over the weekend? Last Friday, stocks were up and gold was down. Tomorrow? Well, I guess we'll see, won't we.

Along those lines, check out this very important chart from Trader Dan. If you think that the current negative correlation between stocks and gold is going to continue, this chart will get your attention and it doesn't even include today's dismal performance.

Last but not least...silver. It also closed above a key technical resistance level today. As you know, a general lack of buyers and open interest has hindered the speed of silver's recovery/advance. Moves like today serve to bring buyers back in, regardless of the extremely high margin rates. I expect silver to continue to trudge forward. It will soon trade toward 41.50 and then 42. How soon it breaks through and closes above $42.30 will determine whether or not I get my $44 by Labor Day. We'll probably need to get through there by this time next week for me to have a shot. Fingers crossed. Either way, silver is looking higher through the northern hemisphere autumn. Sometime in the next 60-90 days it will reach back to the old highs, of that you can be certain.

Have a great evening. Get some rest and be ready for tomorrow. It will be very interesting! TF

9:50pm EDT UPDATE:

​Gold is up $10. The ES is off another 10 points. Crude is down another $1.50. The 10-year note is back under 2%.

A lot can change in the next 12 hours but, at this moment in time, tomorrow looks like it could be a real bloodbath. Not in gold, hopefully not in silver but in just about everything else. It'll be tough to sleep tonight.

The main point of this update is the article linked below. If I had the time or the talent, I'd have written it myself. I agree wholeheartedly with the author's assertions. A must read.

See you in the am for an eventful Friday. TF

About the Author

turd [at] tfmetalsreport [dot] com ()


Aug 19, 2011 - 11:05am

DJIA and POSX futures down and it's early

I think PMs got Lotsa Mo' today.

Aug 19, 2011 - 10:51am

new thread

new thread

Aug 19, 2011 - 10:48am

EE asks PPT and BM to team up to put off

fiat's Judgment Day for another week.

Tom Lredwood
Aug 19, 2011 - 10:46am


They did to get them (momentarily) below 585 and 212.4. It did arrest their upside momentum. We'll see if it works. The HUI has shrugged it off, but the XAU hasn't, then again, it's been lagging all day. The HUI has the big silver stocks, HL and SVM in it. HL had just jumped $0.10 in like 5 minutes on short-covering to $7.43 and was immediately smacked back to $7.33


Aug 19, 2011 - 10:43am


Thanks for the reassuring pat on the back, I know it makes me feel better when AU keeps jumping ahead of AG. That said, it's impossible to just time it correctly. I traded my 10% physical @ $38.75. I found some more dry powder and deployed 20% of the new funds @$40.25 and $41.50. So far Turk, Sprott and Trader Dan have been making some pretty good calls. Turk says $50 by year end, Sprott moves $30M from gold to silver. I like my odds.

Tom L
Aug 19, 2011 - 10:43am

Anatomy of a Silver Raid

For your perusal... I should send that to BartChilton. WTF would be the point?


Aug 19, 2011 - 10:41am

Yes, raid successful, but

Yes, raid successful, but miners haven't really budged (yet).

Visit the FAQ page to learn how to track your last read comment, add images, embed videos, tweets, and animated gifs, and more.

Tom L
Aug 19, 2011 - 10:37am

Raid Successful

And the monkeys have returned from their latest sortie and are currently re-fueling.


Tom Lewc58
Aug 19, 2011 - 10:36am


Honestly, I'm just making this up as I go. I'm really new to this options thing. Thankfully I'm able to play it in a market that I know well and is rising. Unfortunately, I'm one of those people who cannot learn a thing unless I'm getting my hands dirty and losing sleep over it.

No, play money accts for me.


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Key Economic Events Week of 6/29

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