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:


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.


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

turd [at] tfmetalsreport [dot] com ()


Sep 7, 2011 - 12:17pm

@ emmetrope

Thanks for that article, but here's a little tip. It's better to just quote a few sentences or a paragraph, with a link to the full article. It's called fair use.

You could get Turd into serious legal trouble by posting entire articles.

Sep 7, 2011 - 12:20pm

I'll give a small example. My

I'll give a small example. My call options were power driven down this morning by half my position.. GREAT! I added that position back on the cheap and already recovered what I lost plus I re-upped on the weakness :) looking Good Billy Ray. Point is folks, nothing has changed and these raids come and go capitalize on it the EE is firing .22's at my 12" thick armor lol.

Note EXK is just about to go green

The Vet
Sep 7, 2011 - 12:20pm

The Swiss Franc

If the franc can drop 10% on the announcement of a peg to the Euro, then it can rise 10% (or more) if that peg cannot be maintained..

The Swiss have just offered their strong currency at a discount to all who want to buy. The peg to the Euro has to fail in that case unless the Swiss can find some other way to make their currency unattractive to the rest of the world... Currency controls may work but for a country dependent on Financial Services for 70% of its GDP then restrictions on capital movement would be a death knell for the banks, and in turn the economy...

We should watch the Swiss franc exchange rates very carefully; there are plenty of big players who would take on that peg and unless other CBs step in to help, the Swiss cannot maintain it for long. When it breaks there will be hell to pay in the forex markets with unimaginable results. Gold will be part of the mix, but manipulation is the only tool left....

Sep 7, 2011 - 12:23pm

Nadler is...

...a goof.

JN... As well, gold continues to exhibit a degree of volatility which is anything but comforting and it certainly does not smack of what a reserve currency is thought to offer under certain (even abnormal)l circumstances. Over the past two weeks, bullion has set two new records at roughly the same level (raising questions about a double-top); it fell more than $200 in two sessions, then recouped all of the losses, and has now declined more than $100 over the course of 24 hours. Technicians are also mindful of the presence of a bearish divergence in gold’ Stochastic Oscillators versus its declining open interest levels...


***But i work for a site that sells PMs? Its like a being a car sales man working for Ford - but trash talking its product line. W in TF??!?

However - you must read these articles too - know your enemy - that's another way how we learn. How does that line go, 'Keep your friends close and your enemies closer."


Sep 7, 2011 - 12:23pm

German court = jokes

Just about every Supreme Court throws constitution down the toilet when it matters.

Sep 7, 2011 - 12:23pm
Sep 7, 2011 - 12:24pm

I, for one,

get a kick out of the crystal-ballers' mantras of being "right 97% of the time" ---

a selective memory is a terrible thing to waste

Sep 7, 2011 - 12:24pm

Sitting Tight

It has happened to me before: Get out, get out...and then get in, get in. Well I am sitting tight this time, and may add some more if this continues tomorrow or over the weekend.

Dark Matter
Sep 7, 2011 - 12:24pm

Keynesian experiment

I am more and more convinced that the Keynesian experiment is not going to end.

There is a heavy backlash towards Socialist and Communist politics in Europe.

Hell, even Krugman is criticizing Germany's Schauble for his views towards austerity. The politicians can print all the money they want, and if inflation ensues, they will confiscate and prohibit Gold. We have seen it before.

Sep 7, 2011 - 12:24pm

Real Time London 17:22


CHF 1562,2 35,513

GPB 1138,43 25,897

EUR 1292 29,381

HKD 14148 321,69

CAD 1793,79 40,79

AUD 1710,4 38,90

Subscribe or login to read all comments.


Donate Shop

Get Your Subscriber Benefits

Private iTunes feed for all TF Metals Report podcasts, and access to Vault member forum discussions!

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

Key Economic Events Week of 9/30

9/30 9:45 ET Chicago PMI
10/1 9:45 ET Markit Manu PMI
10/1 10:00 ET ISM Manu PMI
10/1 10:00 ET Construction Spending
10/2 China Golden Week Begins
10/2 8:15 ET ADP jobs report
10/3 9:45 ET Markit Service PMI
10/3 10:00 ET ISM Service PMI
10/3 10:00 ET Factory Orders
10/4 8:30 ET BLSBS
10/4 8:30 ET US Trade Deficit

Key Economic Events Week of 9/23

9/23 9:45 ET Markit flash PMIs
9/24 10:00 ET Consumer Confidence
9/26 8:30 ET Q2 GDP third guess
9/27 8:30 ET Durable Goods
9/27 8:30 ET Pers Inc and Cons Spend
9/27 8:30 ET Core Inflation

Key Economic Events Week of 9/16

9/17 9:15 ET Cap Ute & Ind Prod
9/18 8:30 ET Housing Starts & Bldg Perm.
9/18 2:00 ET Fedlines
9/18 2:30 ET CGP presser
9/19 8:30 ET Philly Fed
9/19 10:00 ET Existing Home Sales

Key Economic Events Week of 9/9

9/10 10:00 ET Job openings
9/11 8:30 ET PPI
9/11 10:00 ET Wholesale Inv.
9/12 8:30 ET CPI
9/13 8:30 ET Retail Sales
9/13 10:00 ET Consumer Sentiment
9/13 10:00 ET Business Inv.

Key Economic Events Week of 9/3

9/3 9:45 ET Markit Manu PMI
9/3 10:00 ET ISM Manu PMI
9/3 10:00 ET Construction Spending
9/4 8:30 ET Foreign Trade Deficit
9/5 9:45 ET Markit Svc PMI
9/5 10:00 ET ISM Svc PMI
9/5 10:00 ET Factory Orders
9/6 8:30 ET BLSBS

Key Economic Events Week of 8/26

8/26 8:30 ET Durable Goods
8/27 9:00 ET Case-Shiller Home Price Idx
8/27 10:00 ET Consumer Confidence
8/29 8:30 ET Q2 GDP 2nd guess
8/29 8:30 ET Advance Trade in Goods
8/30 8:30 ET Pers. Inc. and Cons. Spend.
8/30 8:30 ET Core Inflation
8/30 9:45 ET Chicago PMI

Key Economic Events Week of 8/19

8/21 10:00 ET Existing home sales
8/21 2:00 ET July FOMC minutes
8/22 9:45 ET Markit Manu and Svc PMIs
8/22 Jackson Holedown begins
8/23 10:00 ET Chief Goon Powell speaks

Key Economic Events Week of 8/12

8/13 8:30 ET Consumer Price Index
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Labor Costs
8/14 8:30 ET Philly Fed
8/14 9:15 ET Ind Prod and Cap Ute
8/14 10:00 ET Business Inventories
8/15 8:30 ET Housing Starts & Bldg Permits

Forum Discussion

by Solsson, 8 hours 6 min ago
by Pete, 11 hours 59 min ago
by SteveW, 12 hours 42 min ago
by Phoenix79, Oct 17, 2019 - 6:28pm