WARNING

611
154
Wed, Sep 7, 2011 - 9:13am

I think it's quite clear now why gold responded yesterday in the opposite direction from what you would have expected. With central banks actively managing a debasement of their currencies, we are now seeing them also attempt to actively manage a debasement of gold, too. Be careful. Be very careful.

We all wondered yesterday why gold would plunge on the SNB news. Now we know. In an attempt to mitigate the "negative" effect on francs priced in gold, the SNB sold a massive amount of gold futures at the same time. How do we know this, because it appears that the same thing earlier today. Check out this chart that posted in the overnight comments of the previous thread (thanks, pmahler!):

Yes, that's 7,000 contracts (700,000 ounces) (nearly 22 metric tons!) dumped on the Globex while London and NY are closed! This should also raise your deja vu spidey senses regarding silver in May. The $ drop in silver was greater because the silver market is considerably smaller. However, it's the same strategy. Maximize the downward impact and collateral damage by executing the attack at a time of minimal liquidity.

This all wreaks of malicious manipulation. If you are trading, be prepared for anything. If looking to buy, throw all of the charts I gave you yesterday out the window and wait for at least 1725 in gold, maybe even a gap-filling 1650. Since silver is not the object of attack, it shouldn't drop as far but it looks almost certain to drop to the bottom of the channel we've been following, near $40.

Also, it appears likely that we are entering another 4-6 day downshaft in the Continuous Commodity Index. You'll recall we found this pattern last month and it was one of the factors that allowed me to correctly forecast $44 silver by Labor Day. I asked my pal Trader Dan to send me an updated chart and he obliged. Thanks, Dan!

Count the days between moves. Peak early April. Nine day decline. Peak early May. 9 days down. Peak mid-June. 12 days down. Peak early August. 4 days down. Peak early September. Next decline takes it back down to 620-630?

By the way, I just looked at Dan's site. Looks like he agrees with me. I suggest you read this now:

https://traderdannorcini.blogspot.com/2011/09/central-banks-waging-war-on-gold-at.html

So, look, you've been warned. If you're not trading, just sit back and enjoy the free fireworks show. Maybe use the next central bank raid to accumulate some more physical. If you are trading, my advice is to avoid being a hero. Do not try to get cute and "catch the knife". The next few days are going to be extremely volatile. Save your powder for after the dust has settled, when we can all see a bit more clearly.

TF

12:00 noon EDT UPDATE:

Turdite "Zagio" just posted this chart in the comments of this post. It perfectly explains why anyone trying to "catch the knife" should hold off for a while longer.

If you believe as I do that this current beatdown in gold is being engineered by the SNB, then why would you think they would rest before pushing gold all the way back down to the level it was before the devaluation announcement? That level is around 1500 francs/ounce. Additionally, this is a level that would correspond to my potential target buying point of somewhere between 1700 and 1750. It may take till tomorrow or Friday but confidence is high that gold is headed there.

Patience is warranted here. Also, it's now noon EDT which is the hour when follow-through selling usually materializes on the Comex. I for one, am not buying the dip....yet. TF

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  611 Comments

Sep 7, 2011 - 9:15am
226

Chinese Margins

I wanted to add this, too: I guess we now know why Shanghai felt it necessary to announce the "temporary" rise margins over the weekend. Do you think they had some foreknowledge of the SNB actions?

p.s. FIRST!

Bro D
Sep 7, 2011 - 9:20am

Thanks

for a word to the wise early this morning!

Tom L
Sep 7, 2011 - 9:23am

In the face of this raid

DrC and Oil are both up. This reinforces the thesis that O-Bomb-Ya has a new plan to fix the economy and there is no need to be fearful. Look! Gold dropped $60 last night. Copper's up and Oil's up. The Smart Money likes this new idea of the President's.

I could write CNBC's commentary while sleeping in the bottom of a slaughterhouse septic tank and dreaming of gorgonzola cheese. (H/T to an old Dennis Miller routine).

Silly crap. We all know this is a raid to cover their debasement schemes.

Ta,

Morpheus
Sep 7, 2011 - 9:24am

Time compression

The time compression of events is getting down right scary!

Over55
Sep 7, 2011 - 9:25am

Yeah thanks for keeping us

Yeah thanks for keeping us updated TF.

It one of them things, Its like when is a good time to buy or do you think it will go down a little more. Thats the question hahaha

No matter what we are heading up, without a doubt IMHO

Too much going on for it not too.

https://www.dailyjobcuts.com

GoldMania3000
Sep 7, 2011 - 9:25am

And the war continues...

Just reinforces to me that cash is good to have on hand. If there's another stock down..i guess these folks will also bring gold with it too. Is there any justice...let the story continue

Colonel Angus
Sep 7, 2011 - 9:25am

I was hearing 4000 contracts...

...out of Asia this morning, but now it is over 6000. Maybe they caught some stops along the way.

I've used two words all morning, "Fucking bastards." Now I want to add "manipulating" in there somehow.

Seems like the Central Banks want to tell us both the price of money (thanks SNB) and now the price of everything else in their phony money. They are the neighborhood bullies. It will work for a short while, but it won't work indefinitely. Just wish I would have waited a couple weeks to finish going all in on the physical. In the long run, all will be well. For the short term, I'm glad I can look at all the PMs in the vault. Should be fun to play around with the brokerage account at least.

Eric Original
Sep 7, 2011 - 9:27am

a tip for the turd

I seldom hat tip the Turd. It is pretty much implied throughout the blog. But when TF said "FIRST", I had to tip that! LOL I guess we know where TF stands on that malarky.

Michael222
Sep 7, 2011 - 9:28am

Re:These are 61.8% retracements

Well, seems Patrick Wright was right in his post (go check it https://www.tfmetalsreport.com/blog/2320/three-great-zh-reads?page=4 )

No troll to me. I wish I had listened at the moment he had shared it. Then I had more fiat to buy the real stuff.

Thanks Patrick. I hope you keep us updated.

Tom L
Sep 7, 2011 - 9:30am

Watch Oil

for a break of $90-$91. If that happens they won't be able to keep Gold down for long. $87.40 right now. But it's been really volatile as well. If they push this, 'we have a plan' MOPE then Oil will catch a bid and move through the 50% RT line shown on the chart below:

https://www.flickr.com/photos/29681681@N06/6123361001/

That would be a big signal that something's changed.

Ta,

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Key Economic Events Week of 12/9

12/10 8:30 ET Productivity and Unit Labor Costs
12/11 8:30 ET CPI
12/11 2:00 pm ET FOMC fedlines
12/11 2:30 pm ET CGP presser
12/12 8:30 ET PPI
12/13 8:30 ET Retail Sales
12/13 10:00 ET Business Inventories
12/13 11:00 ET Goon Williams speech

Key Economic Events Week of 12/2

12/2 9:45 ET Markit Manu PMI
12/2 10:00 ET ISM Manu PMI
12/2 10:00 ET Construction Spending
12/4 9:45 ET Markit Services PMI
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12/5 8:30 ET Trade Deficit
12/5 10:00 ET Factory Orders
12/6 8:30 ET BLSBS
12/6 10:00 ET Wholesale Inventories

Key Economic Events Week of 11/25

11/25 8:30 ET Chicago Fed Nat'l Idx
11/25 7:00 pm ET CGP speech
11/26 8:30 ET Advance Trade
11/26 9:00 ET Case-Shiller home prices
11/26 10:00 ET New home sales
11/26 10:00 ET Consumer Confidence
11/27 8:30 ET Q3 GDP 2nd guess
11/27 8:30 ET Durable Goods
11/27 9:45 ET Chicago PMI
11/27 10:00 ET Pers Inc & Cons Spndg
11/27 10:00 ET Core inflation
11/27 2:00 pm ET Beige Book

Key Economic Events Week of 11/18

11/19 8:30 ET Housing Starts & Bldg Perms
11/20 2:00 ET October FOMC minutes
11/21 8:30 ET Philly Fed
11/21 10:00 ET Existing Home Sales
11/22 9:45 ET Markit November Flash PMIs

Key Economic Events Week of 11/11

11/12 Three Fed Goon speeches
11/13 8:30 ET CPI
11/13 11:00 ET CGP on Capitol Hill
11/14 8:30 ET PPI
11/14 Four Fed Goon speeches
11/14 10:00 ET CGP on Capitol Hill
11/15 8:30 ET Retail Sales
11/15 8:30 ET Empire State Manu Index
11/15 9:15 ET Cap Ute and Ind Prod
11/15 10:00 ET Business Inventories

Key Economic Events Week of 11/4

11/4 10:00 ET Factory Orders
11/5 9:45 ET Markit Services PMI
11/5 10:00 ET ISM Services PMI
11/6 8:30 ET Productivity & Labor Costs
11/6 Speeches by Goons Williams, Harker and Evans
11/8 10:00 ET Consumer Sentiment
11/8 10:00 ET Wholesale Inventories

Key Economic Events Week of 10/28

10/30 8:30 ET Q3 GDP first guess
10/30 2:00 ET FOMC fedlines
10/30 2:30 ET CGP presser
10/31 8:30 ET Personal Income & Spending
10/31 8:30 ET Core Inflation
10/31 9:45 ET Chicago PMI
11/1 8:30 ET BLSBS
11/1 9:45 ET Markit Manu PMI
1/1 10:00 ET ISM Manu PMI

Key Economic Events Week of 10/21

10/22 10:00 ET Existing home sales
10/24 8:30 ET Durable Goods
10/24 9:45 ET Markit flash PMIs
10/24 10:00 ET New home sales
10/25 10:00 ET Consumer Sentiment

Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

Key Economic Events Week of 10/7

10/8 8:30 ET Producer Price Index
10/9 10:00 ET Job Openings
10/9 10:00 ET Wholesale Inventories
10/9 2:00 ET September FOMC minutes
10/10 8:30 ET Consumer Price Index
10/11 10:00 ET Consumer Sentiment

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