Labor Day Charts

Mon, Sep 5, 2011 - 10:59am

Here in the U.S., it's a holiday. The end of summer. The end of the doldrums. Well, not really. If history is any guide, however, we are about to see an increase in volatility and not just in the metals. If you thought August was wild, you're really going to love September.

So we better be prepared. The manipulated charts, which have proven so useful in identifying potential highs and lows, are going to be even more valuable in the days ahead. As a baseline, I thought I'd take the time today to post daily and weekly charts for both metals.

In gold, the weekly chart continues to show the breakout of the 3-year channel that we first identified back in July. The more time gold spends outside of this channel, the more confident we can become that it is not a "false breakout" and that a new trend channel is emerging. On the daily chart, gold has clearly moved above the midline of the "megaphone" formation we've been following. This is very bullish and would seem to indicate that a move to the top of the megaphone is just around the corner. The top line is currently slicing through the $2000 area so that, for now, has become our primary target.


Silver is still contained by the primary trend which dates back to August of last year. The real fireworks start when silver breaks out and through the top of the channel, similar to March and April. For now, that hasn't happened so I continue to have a short-term price target that mirrors the top of the channel. If/when silver breaks out of the channel again, things will get really exciting. Until then, just a steady grind higher.


Lastly, gold is up over $10 on the Globex this morning. It even traded as high as $1908 a few hours ago. I would caution you against getting too excited about this. History shows that gains made while NY is closed are typically erased once the monkeys report to their desks at the end of the holiday. Today will likely be the same. IF we make it to tomorrow at this time and gold is well over 1900, then you can get excited. Until, then, kick back, relax and enjoy the end of summer. TF

About the Author

turd [at] tfmetalsreport [dot] com ()


SilverTree · Sep 5, 2011 - 11:01am

Let the fireworks begin.

Let the fireworks begin.

SilverDude · Sep 5, 2011 - 11:04am

First Comment....longggggtime lurker....

Thanks TF!! I always enjoy your posts. I am a stacker...but your trading posts have me thiking.......LOL

speconomist · Sep 5, 2011 - 11:07am

This is not the raid you're looking for!

Enjoy Labor Day Turd, appreciate those charts!!


I think that a final smashdown before the official announcement of OperationTwist2/QEwhatever is something possible and actually makes quite a lot of sense applying some empathy. Anyone else finds it logical or is it completely absurd?

From yesternight:

Vernon Wormer · Sep 5, 2011 - 11:13am

Labor Day

Happy Labor Day Turd. Thanks for all of your hard work. Keep it up.

Vincent · Sep 5, 2011 - 11:14am

Thanks TF!

I want gold $2000, silver $50! LOL

Silver is money · Sep 5, 2011 - 11:16am

Yet another margin hike

Turd, I am surprised that you didn't mention the margin hike announcement coming out of China this morning for both gold AND silver. Unless maybe you didn't know about it. Either way, here it is:

SHANGHAI (Commodity Online) : China’s largest Gold exchange, The Shanghai Gold Exchange will raise trading limits and margin requirements on its gold and Silver forward contracts on Sept. 9 to prevent excessive volatility.

In a statement,SGC said it will temporarily raise trade margins and daily trading limits for both its gold and silver forward contracts ahead of a long weekend to allow traders more latitude to adjust to overseas price movements.

Chinese exchanges are closed Sept 10-12 for the Mid-Autumn Festival.

Trading margins for the gold forward contract, Au(T+D) , will be raised starting Sept 9 to 13 percent from 12 percent, while the daily circuit breaker would be lifted to 10 percent from 9 percent.

The Silver Gold forward contract, Ag(T+D) , will also see its trading margin raised by one percentage point to 16 percent, while daily movement will be raised to 12 percent, from 10 percent.

The SGE said the collateral and daily price limits for both contracts would revert back to their pre-holiday levels on Sept. 14 if those limits were not breached on the first day of market re-opening on Sept 13.

Silver is money · Sep 5, 2011 - 11:18am


It's a rather sleepy morning and I was not aware of this.

· Sep 5, 2011 - 11:20am

This is terrific

A C&P from Santa. Puts everything into perspective.

Dear Jim,

Here is why S&P downgraded the US credit rating.

• U.S. Tax revenue: $2,170,000,000,000 
• Fed budget: $3,820,000,000,000 
• New debt: $ 1,650,000,000,000 
• National debt: $14,271,000,000,000 
• Recent budget cut: $ 38,500,000,000

Now let’s remove 8 zeros and pretend it’s a household budget.

• Annual family income: $21,700 
• Money the family spent: $38,200 
• New debt on the credit card: $16,500 
• Outstanding balance on the credit card: $142,710 
• Total budget cuts: $385


¤ · Sep 5, 2011 - 11:21am

Some pretty steep channels

Thanks T for the charts and your take on this.

Those price channels look sweet. Whew!

TheGoodDoctor · Sep 5, 2011 - 11:24am

@SilverTree I think you have

@SilverTree I think you have your holidays mixed up bud! cheeky

Marcus · Sep 5, 2011 - 11:36am
· Sep 5, 2011 - 11:36am

"Turd's terrificness" Share with everyone

A thousand hat tips!

Translating the Federal budget into sheeple terms that I can understand. How can anyone have confidence in our future in light of this? For effective persuasion, share the above post when trying to convert friends and family.

• Annual family income: $21,700 
• Money the family spent: $38,200 
• New debt on the credit card: $16,500 
• Outstanding balance on the credit card: $142,710 
• Total budget cuts: $385

Vincent TF · Sep 5, 2011 - 11:41am

@ Turd Ferguson

TF! Help! It is impossible to remove files from a folder. ' Delete ' does not work! Thanks

· Sep 5, 2011 - 12:02pm

PM shopping on a holiday! (repost)

( Repost alert! I hoped a few more readers might find this useful)

Perhaps many of our readers (like me) are on a limited budget and cannot trade ETFs stocks or futures. Others have chosen not to trade much due to volatility & manipulation. I prefer to stack.... and stock up the jewelry box. But a bit of effort can help you find some under priced metals. My wife and I immensely enjoy toodling around on a Saturday looking in antique shops, coin shops, garage sales, etc. We have a nice lunch or dinner together. Makes a great date! Our 17 & 20 year-old kids even like to go. I highly recommend shopping for gold & silver in the 2nd hand market as a relaxing and profitable activity.

We have been taught what to look for by a gold-dealer friend. I thought I would share that here.

First, there is lots of jewelry that is underpriced. Coins… not so much anymore, unless we get a skyrocket week. It takes a few days or weeks for the dealers in antique malls and antique stores to figure it out and raise their prices.

Tools of the trade: 1) a jewelers loop so you can read the fine print. 2) a calculator. 3) a good scale—like a postal scale—more accurate the better.

Lots of jewelry is clearly under priced. I just buy it.

Silver jewelry needs to be marked “Sterling” or “925” This means it is 92.5 % pure, blended with copper for strength. Rings, braclets, earrings, some necklaces. If it is not marked, I’d stay away. You want it to be easily re-saleable.

I would also avoid the temptation of candlesticks. Most of the good stuff was melted down to pay for Europe's wars in the 1800s. Almost all that are still around are “weighted” but not all of them say that. This means they have a thick layer of silver plate on a ceramic base with plenty of brass or lead inside to approximate the weight of silver. Often you can hear a rattle when you shake it due to a bit of ceramic breaking off and falling into a hollow place.

Most silverware is plated. They started doing that in about 1850. Pure “sterling” silverware is much thinner and lighter. You can still find some of that, but its best to weigh it. Some jewelry is also weighted—bulky rings and bracelets. It just doesn’t feel right in your hand. Stay away. Platters and trays are also probably plated. I just look for jewelry, to be safe.

Formula: # of ounces X .925 = silver content. Multiply that by the spot price for fair value.

Buying gold is a bit more interesting. It is graded in karats. Pure gold is 24 karat. Jewelry is always mixed to give the metal more strength. 24 karat gold is pure, so 12 karat gold is 12/24ths—or 50% pure gold. 14K = 58.3% 18K = 75%, do the math for other weights. Again, I would only buy jewelry that is marked in karats by the manufacturer. Otherwise you need the assay kit and more expertise than I have.

Formula: # of ounces X (the % of gold) = gold content. Multiply that by the spot price for fair value.

Most pros weight items in grams. This adds a step to determining value, converting grams to ounces. I have not memorized the math yet and prefer to keep things simple.

Any stones in the jewelry are very light should not be considered. You are paying for their weight in gold. On occasion you get a nice diamond, ruby, or emerald for free—well worth it!

Our local coin shop has a box of junk jewelry they have purchased. They keep it on the counter for customers to pick through. They sell it at spot and the stones are free. Some is still in very nice condition. My local PM buyer in town has on occasion offered to sell me his loose stones very cheap. Have not done that yet, but I am tempted.

But the most enjoyable part is the beauty of it. Keep an eye out for antique pieces using the Art Deco style (1920-1935, geometric or Egyptian designs) or the Art Nouveau style (1890-1920, flowing flowery curved designs).

Happy hunting!

¤ · Sep 5, 2011 - 12:03pm


Is that what the metals are trading on after London has closed?

jackinrichmond · Sep 5, 2011 - 12:03pm

european markets

are you watching the carnage in the european markets right now ?

redwood · Sep 5, 2011 - 12:04pm

Timpa, I know it's been said

Timpa, I know it's been said many times before, but the GLD is a mighty BIG swiss cheese. 

TheGoodDoctor · Sep 5, 2011 - 12:15pm
lochsa · Sep 5, 2011 - 12:20pm

Thanks Mr Ferguson

The more things cBank of America Bailouthange,the more things are the same. Wishing all a Happy Labor Day

silver squirrel TF · Sep 5, 2011 - 12:34pm

C&P from Santa

Thanks Turd!!!

This post portral makes it so much easier for the every day person to get the proper perspective on where the Nation's debt is. I saw a similar description on a video by Mark Nuttle. Makes it very real. Loved your previous post about 9/11.

Eric Original · Sep 5, 2011 - 12:48pm

Turd's C & P from Santa

Turd's C & P from Santa is actually only one small part of a really excellent article from Frank Holmes. I had posted a link yesterday, but my focus was on the portion discussing negative real interest rates/gold. There's more good stuff in there too, I recommend all of it.

Colonel Angus · Sep 5, 2011 - 12:49pm


Anyone think I did okay on this one? I bought five St. Gaudens double eagles for $9572 off of a certain well-known auction site. This was from a reputable dealer I've dealt with outside of that site. I couldn't believe the luck. One auction of two for $3771 and the other three for $5801...all AU or BU.

Stock up! Happy Labor(less) Day from someone who has to work today.

timpa · Sep 5, 2011 - 12:51pm

Happy Serf Day

Labor Day Has Been Rendered Completely Meaningless (Happy Serf Day)
Washington's Blog

Labor Day … Or Serf Day?

As I noted in 2008:

A highly-regarded economist (Michael Hudson, Distinguished Research Professor at the University of Missouri, Kansas City, who has advised the U.S., Canadian, Mexican and Latvian governments as well as the United Nations Institute for Training and Research, and who is a former Wall Street economist at Chase Manhattan Bank who also helped establish the world's first sovereign debt fund)said:

"You have to realize that what they're trying to do is to roll back the Enlightenment, roll back the moral philosophy and social values of classical political economy and its culmination in Progressive Era legislation, as well as the New Deal institutions. They're not trying to make the economy more equal, and they're not trying to share power. Their greed is (as Aristotle noted) infinite. So what you find to be a violation of traditional values is a re-assertion of pre-industrial, feudal values. The economy is being set back on the road to debt peonage. The Road to Serfdom is not government sponsorship of economic progress and rising living standards, it's the dismantling of government, the dissolution of regulatory agencies, to create a new feudal-type elite."

In 2009, Foreign Policy magazine ran an article entitled "The Next Big Thing: Neomedievalism", arguing that the power of nations is declining, and being replaced by corporations, wealthy individuals, the sovereign wealth funds of monarchs, andcity-regions.

The Government Continues to Destroy Jobs … Not Create Them

Despite pretty words and psuedo-jobs programs, government policy isunrelentingly destroying American jobs – instead of creating them – by:

- Encouraging companies to ship them abroad

- Sending a large percentage of the funds for bailed out banks abroad- Encouraging mergers

- Paying banks to park their excess reserves, instead of deploying them as new loans to Main Street

- Encouraging redistribution of wealth upwards to the top .1% wealthiest

- Enacting policies which (1) turn a blind eye to Wall Street fraud, (2) prop up the too big to fail banks, asset prices and leverage at any cost, and (3) spend stimulus money on the military and huge Wall Street firms, instead of on average Americans

(And no, Obama is not being misadvised; he simply has different priorities from the average American).

Labor Day Has Been Rendered Completely Meaningless

As Mark Provost has points out – the rich love high unemployment. Because all branches of government and the Federal Reserve are wholly captured by the top .1% (and see thisthis and this), they are not very motivated to decrease unemployment.

And as David Rosenberg notes:

The "labor share of national income has fallen to its lower level in modern history … some recovery it has been – a recovery in which labor's share of the spoils has declined to unprecedented levels."

Indeed, the government has made it official policy to protect the fat cats instead of helping the little guy.

Due to Americans' passivity in the face of those who act like lords, Labor Day has been rendered completely meaningless.

· Sep 5, 2011 - 12:52pm

Vincent wrote: TF! Help! It

Vincent wrote:

TF! Help! It is impossible to remove files from a folder. ' Delete ' does not work! Thanks

Vincent, if files (I'm assuming you mean images) are removed from your personal folder, then they will no longer be displayed on the posts. We don't want to delete them, or else visitors who look at posts in the future won't be able to see the images, charts, etc. added to the comments.

Have you filled your folder space to capacity? If so I'd recommend posting on a third-party site like photobucket or flickr, then link the image to your post. Thanks.

Tesla · Sep 5, 2011 - 12:55pm

Thanks Turd

Very interesting stuff happening now!

(back above 1900 too)

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