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

About the Author

Founder
turd [at] tfmetalsreport [dot] com ()

  611 Comments

¤
Sep 7, 2011 - 8:32pm

Greetings KTM

Welcome aboard

Eric Original
Sep 7, 2011 - 8:34pm

margarita

If you've read any of the stuff on the internets over the years about survival when society breaks down, be it Russia, Serbia, Argentina, whatever, then you should know that all you really have to do is stock up on case after case of cheap ass alcohol. You can barter that for ham, salmon, gold, gasoline, water, good times, anything.

EDIT: and smokes too. This ain't exactly highbrowville.

FriedEggs
Sep 7, 2011 - 8:35pm

It just dawned

on me again - the system is f**kin bro/ken.

They can not fix it - its like an impossible rubics cube (created just the way 'they' wanted). First of all - there is no solution... and secondly, its getting harder and worse with each move...

Solid article...

CONVINCING GOLD PRICE PERFORMANCE

The performance of Gold in the last three years has proven to demonstrate loudly and visibly that the potential price in future years is likely to be more like $2500, then $3000 and higher. The reason is simple. Nothing is being fixed, no remedy even attempted, the debasement of money continues, the ruin of the monetary system spreading like a Texas wildfire, the bailouts making headline news almost every week, and Gold actually being the ONLY, the ONLY good performing asset. The bigger question is no longer whether Gold will repeat the 1980 decline and multi-year fizzle, but nowadays whether climbing aboard the Gold train at the $1800 to $1900 price will offer much upside potential. In other words, is it too late to enter the Gold investment trade?

https://www.kitco.com/ind/willie/sep072011.html

Fried(e)

Shill
Sep 7, 2011 - 8:35pm

Welcome aboard KTM

Welcome aboard KTM

cpnscarlet
Sep 7, 2011 - 8:37pm

Drinks??

I've been lurking in and out today since I've been up on the roof fixing a bad drip guard.

You know folks, last week you were talking about high bp and diet so I took it all in and decided to hold off on alcohol and artificial sweeteners for the week. Now I stop by and you're talking about mixing drinks and keeping the bar stocked. First it's a health food kick and next it's "see ya at liquorville"!

Give a guy a break, will ya???

Larry
Sep 7, 2011 - 8:45pm

O'Reilly is an idiot

Besides his smarmy attitude and unearned, undeserved condescension towards Ron Paul, Mr. No Spin has no clue about gold, currency, history, the economy, the world, politics or what is actually going on in the US.

How this self-important, self-centered, fence-sitting-for-popularity, obnoxious, ratingcentric egomaniac has a show on tellyvison at all, much less prime time is a disturbing sign of massive stupidity that requires a willing suspension of patience to even watch.

The fact that this guy's show is so popular gives me reason to mistrust ratings as well as the common sense and intelligence of the American public. "Just lookin' out for the people". Right. Sheesh.

Shill
Sep 7, 2011 - 8:46pm

Cpn, stick around, next were

Cpn, stick around, next were giving lessons on the perfect Green Bud.

LOL :)

¤
Sep 7, 2011 - 8:49pm

Tyler Durden and Co.>>>Super Genius'

I mentioned earlier how ZH is absolutely brilliant in what they do and how they do it.

They're relentless. Just like Wile E. Coyote~~~Super Genius.

I would imagine Tyler and Co. rack their brains so much pumping out such useful info. laden material everyday that their brains must get sore.

I hope they have one of these handy ACME co. products when they need a break (3:28 mark)

Video unavailable
¤
Sep 7, 2011 - 8:52pm

Not to be confused with this Wiley

Wile E. Coyote, Supergenius
Shill
Sep 7, 2011 - 8:53pm

Funny thing I turn down the

Funny thing I turn down the volume on the Tee Vee, until Paul speaks. The rest I could careless about.

silverbonz
Sep 7, 2011 - 8:55pm

Larry, switch to the Judge on Fox Business

at 8:00, much better for you blood pressure. I haven't watched O'Reilly (and others) in over a year for the reasons you already stated.

margaritatime
Sep 7, 2011 - 8:58pm

Eric

Well this is good information. I can be the official liquor girl, or whatever the cleverness - my mother would be so proud.

VGR - vodka gold ratio

GGR - gin gold ratio

BGR - bourbon gold ratio

* very large chunks of time go by between me inadvertently committing a felony, but this sounds like it could be my niche. I could be like the Bob Chapman of bootlegging... Awesome.

Edit: cpnscarlet.. Sorry the drinks thing is totally my fault, but I can pour you a virgin (I'm cool like that). Kidding.. Again, sorry.

¤
Sep 7, 2011 - 8:58pm

The Judge rules

Love listening to that man. He's a walking encyclopedia of law and history.

He would make a great Turdite.

EagleDave
Sep 7, 2011 - 9:00pm

Good PM Commentary (& Long-Term Charts) from Chris Martenson

The latest on PM prices from his blog:

https://www.chrismartenson.com/blog/commodities-look-set-to-rocket-higher/62178

Commodities Look Set to Rocket Higher

I've been asked to comment on the work of a few noted deflationists who are calling for a top in commodity prices here. Their argument is pretty clear cut: Because inflation is a function of available money plus credit (their definition), and because credit has fallen, deflation is what comes next. When looking about for things to deflate in price, commodities are an obvious candidate for attention because they have risen so much over the past decade.

In this view, three things have to be true:

  1. Demand for commodities has to fall below supply. After all, as long as demand exceeds supply, prices will typically rise.
  2. Money, including credit that would normally be used to buy commodities, has to shrink. That's the definition of deflation that we're analyzing here.
  3. People's preference for money has to be greater than their preference for 'things,' with commodities being very obvious 'things.' That is, faith in money has to be there or people will prefer to store their wealth elsewhere.

These are all just versions of the old supply/demand argument for commodity prices, except that our consideration also includes the important element of the Austrian economic view of demand for money.

There are several reasons why I think there are serious holes in each of these conditions. Enough to warrant a healthy degree of caution in one's certainty about what 'must' happen next to commodity prices. Full disclosure: I continue to have 75% of my total net worth locked up in gold and silver, so I am decidedly in the camp that does not believe the commodity surge has yet run its course.

A Technical Challenge

Before we tackle each of those three conditions from above, let's look at the chart for the Continuous Commodity Index (CCI) to see what it might be telling us.

First, let's examine the period after the great bust of 2008 (a liquidity-driven event) and note that commodities essentially rose during all of 2009 and then formed a classic 'bull flag' formation in early 2010.

Continued here:

https://www.chrismartenson.com/blog/commodities-look-set-to-rocket-higher/62178

Turdle GG
Sep 7, 2011 - 9:04pm

We are not flatlining today

Moving on up, actually

redwood
Sep 7, 2011 - 9:05pm

swiss franc abdicates the crown-gold and esp. silver now king

https://seekingalpha.com/article/292246-the-swiss-franc-abdicates-the-cr...

In conclusion, demand for silver in China grew by 67% between 2008 and 2010, according to the Hong Kong Mercantile Exchange, which recently began trading silver future contracts due to the amazing growth in the demand for silver. Growth in China and India in the physical markets alone is expected to grow another 30% this year. Physical bar and coin hoarding will continue to gain popularity amongst the Chinese investors as they prefer physical rather than future contracts. Silver demand from India is also expected to do well as the healthy monsoon seasons are increasing the purchasing power of rural Indian farmers who account for 60% 0f India’s total silver demand.

¤
Sep 7, 2011 - 9:06pm

PM's grinding upwards a bit

Better then seeing the opposite. The night is still young.

I need a 'Haze break.

silverbonz
Sep 7, 2011 - 9:06pm

TimeFrames

What timeframes do you utilize while trading? I tend to like the 10 minute chart.

DPH hillarious family guy clip!

tyberious Golden Turtle
Sep 7, 2011 - 9:08pm

Golden Turtle Please explain?

"I luckily noticed the downward pennant and liquidated the majority of my longs at 1875." Why? Are you a swing trader, day trader or speculator?

jaw777 The Vet
Sep 7, 2011 - 9:09pm

Synthetics

Got it. Many thanks!

tankerfirstofficer Tecumseh
Sep 7, 2011 - 9:19pm

@Tecumseh

Thank you for an excellent set of paragraphs, above. I will only point out one small correction:

None of these sociopaths are in any way "misguided." They have all done their part to wrest freedom from the citizen... freedom which is never returned in the future, you'll notice. The flow of our liberty is a one-way street -- away from the citizen, ALWAYS.

Thanks for reading.

Number 47
Sep 7, 2011 - 9:20pm

Fedex.

Someone mentioned using fedex regarding my postal problems. Here is a warning to all.

Fedex actively police parcels for VAT here in Europe, they held a package of mine and would not release it until I paid the VAT, they charged me one amount, I paid it, then they came back with another amount, I paid that too, they released the parcel after ten days. It had been opened by their depot manager. they then started sending me letters demanding thousands of euros, i contacted them to point out their mistake (they were trying to VAT me for gold, this is VAT free in Europe) they said they would clear the file. Next was debt collection agency letters. Again I contacted them and they said they would resolve it. This went on for over a year, they would send demands for money (different amounts each time), i would refute the claims, they would say it was dealt with, the debt collectors start writing again, rinse and repeat.

After a year i stopped being polite and went on the offensive, I begged them to make good on their threat of court action as I knew I was in the right. Lo and behold, after some swearing and ranting emails I got a letter saying that the matter should not have gone on for so long and they were going to write off the amount! No apology, no admittance of guilt. They made my life a misery for a year. I will never use fedex again, period.

To cap it all off, anyone who handled my package, including the low paid delivery boy who brought it to my door could see this written on the outside of the box!

[IMG] https://i220.photobucket.com/albums/dd21/szjon/100_3902.jpg [/IMG]

The description wasn't right but the customs value is a shocker to write on a box! Inside was a 250g gold bar, 1 kilo of silver, 1 500g bar of silver (vintage) 5x 100g of silver, 20 philnarmonics, 1 oz of platinum and 4 oz of palladium. I was less than happy that it had been handled by some fedex manager, (he opened the box!) and even less happy that the supply chain all knew my address. It made me stop keeping PMs at home and is partly responsible for the situation I now find myself in with my swiss storage problem.

Please! Do not use fedex!

TheGoodDoctor
Sep 7, 2011 - 9:21pm

@silverbonz No worries man.

@silverbonz No worries man. Just didn't want anyone thinking I was a Dem or Repub. I just don't see how any jobs are going to be created.

Dr Durden
Sep 7, 2011 - 9:23pm

Perfect drink for the times

Dark and Stormy

Ginger beer and dark rum

Why not make it The Kraken....

The Kraken Rum Commercial
Tom L
Sep 7, 2011 - 9:24pm

@DPH: The Judge

Not only would he be an excellent addition to this crew but he'd look even better in SCOTUS robes or as RP's running mate.

Can you imagine a Biden/Judge Nap debate?

It's an image that makes me smile while sleeping deeply.

Ta,

johnboatcat
Sep 7, 2011 - 9:27pm

From the Tocqueville Mutual Funds home page just now

Tocqueville Fund TOCQX $21.52 +0.62 -4.61
Opportunity Fund TOPPX $14.26 +0.47 -1.45
International Value TIVFX $11.65 +0.29 -8.20
Select Fund TSELX $10.64 +0.41 -13.85
Delafield Fund DEFIX $25.83 +0.91 -12.11
Gold Fund TGLDX $91.40 +0.31 +5.66

The last number is their YTD return. I hardly think that I was unjustly insinuating that they have not been what I would consider steller. Glad it seems to be working out for you!

https://www.tocquevillefunds.com/index.html

exiledbear
Sep 7, 2011 - 9:30pm

@margaritatime

You might like these two:

https://www.youtube.com/user/AlieandGeorgia

Alie and Georgia Present: The McNuggetini
Larry
Sep 7, 2011 - 9:36pm

Silverbonz, yep

You are right, and I normally would watch the Judge instead of O'Rally... but like a masochist I flip Fox on from time to time. Not sure why. BP is fine tho, because the tv is usually way off or just plain off. I'm a reformed political junkie. At this point, I just send $ to Paul and don't even follow it. Just a charade I don't have time for. They're nothing but Harlots, as Kumanari sez...

redwood
Sep 7, 2011 - 9:37pm
T
Sep 7, 2011 - 9:42pm

I need this drink

Sh#t.... the red head on the left is just Way too sexy. I had to stop. I'm just too old....

Subscribe or login to read all comments.

Contribute

Donate Shop

Get Your Subscriber Benefits

Exclusive discount for silver purchases, and a private iTunes feed for TF Metals Report podcasts!

Key Economic Events Week of 6/17

6/18 8:30 ET Housing Starts and Building Permits
6/19 2:00 ET FOMC Fedlines
6/19 2:30 ET CGP presser
6/20 8:30 ET Philly Fed
6/21 9:45 ET Markit flash June PMIs

Key Economic Events Week of 6/10

6/11 8:30 ET Producer Price Index
6/12 8:30 ET Consumer Price Index
6/13 8:30 ET Import Price Index
6/14 8:30 ET Retail Sales
6/14 9:15 ET Cap Ute and Ind Prod
6/14 10:00 ET Business Inventories

Key Economic Events Week of 6/3

6/4 All day Fed conference in Chicago
6/4 10:00 ET Factory Order
6/5 9:45 ET Markit Services PMI
6/5 10:00 ET ISM Services PMI
6/6 8:30 ET US Trace Deficit
6/7 8:30 ET BLSBS
6/7 10:00 ET Wholesale Inventories