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 - 12:26pm

More Comedy for the Turds

This from msnbc:

6 steps to wipe out credit card debt (aka How to be a Perpetual Debt Slave)

3. Contact your credit card companies

If things have gotten so bad that you can't keep up with minimum monthly payments, you have little choice but to call one or more of your credit card companies. Don't launch into a long sob story, but tell them calmly and clearly that you're temporarily struggling and need them to cut you some slack. Don't expect it to be an easy conversation, but keep your cool and try to convey the fact that you're a responsible person who is determined to pay back what you owe. There's a good chance you can get your minimum payments reduced.


Sep 7, 2011 - 12:27pm

@better and better

Even though the term is used too much and often with ulterior motives, like it or not, sometimes it is true that a correction IS due. That's NOT where we are now, but it is where we were in late April. The fundos didn't change, but the market was overbought, meaning we were too far above the moving averages, the big money was starting to exit and it was just a matter of time until the correction occurred. We here thought it was a few more days away, but then someone gave the market a big shove...

Pay attention when somebody says that, because sometimes they are right.

I 100% disagree with this, no disrespect to you personally. "The market was overbought"...says who? The MOPEsters saying nothing goes straight up forever? This is MOPE at it's best. We all know that silver only corrected in May because of the heavy shorting and punitive egregious margin hikes that the EE imposed upon the market. MA's mean nothing when we all know in TRUE price discovery that gold and silver should be much higher when measured against any currency. This is not a correction. It is manipulation.

I believe in technical analysis in a free market. TA means very little in the markets we live in. For example, there is really no reason whatsoever that the DJIA should be up 200pts. Turd is very good at TA. He is right, silver should have been headed to $46 this week. He is spot on many times, but how can he be so wrong sometimes? Because the manipulators intervene. Why on earth would gold not skyrocket on the Swiss pledge to debase their currency? Obviously it is because of TPTB intervention to drive it down.

The only correction that is due is for gold and silver to stop being suppressed and go WAY UP. What people should be saying is EXACTLY THAT. What people fail to take into account is that the beach ball has been held underwater way too long and the PMs should be much higher. Gold and silver DO NOT NEED TO COME BACK to moving averages, because the moving averages are a product of PMs being suppressed. THIS IS MOPE! The true price is MUCH HIGHER. The TRUE CORRECTION is straight up!!

Silver Tongued FoolNumber 47
Sep 7, 2011 - 12:31pm


What about using FedEx? Insure and require signature.

jlee2027Dark Matter
Sep 7, 2011 - 12:31pm

re: Keynesian experiment

The politicians can print all the money they want, and if inflation ensues, they will confiscate and prohibit Gold. We have seen it before.

Oh horsemanure. The rioting caused by hyperinflation and starving people just might distract them a bit.

Sep 7, 2011 - 12:31pm

EXK green and something just

EXK green and something just popped all miners in vertical mode.

Sep 7, 2011 - 12:32pm


Close above 41.50 in silver and I say we have seen the lows. In fact, I will stick my neck out and say that 1790 was it in gold.

Why do I want to sell gold to buy EUROs and sell SWISSY? I know the Swiss want to stop the appreciation of their currency against the EURO. But selling gold to do so is like falling down the rabbit hole in Alice in Wonderland.

The winner is the entities taking the other side of the trade and buying the gold. Expensive exercise to get gold to momentarily trade at 1725.

I will have that pill that makes me larger please. My gold position that is.

Sep 7, 2011 - 12:33pm

Need some help with my USO and OIL

Nice jump today. Have been looking to dump it (even at a loss) for a while, I have no biz playing there. Thought previously the coverage of the Turmoil in the Middle East would outweigh lower demand...was wrong (about the coverage :-). That combined with Mike Maloney's thoughts, holding it scares me. What are your thoughts on oil, anyone?

Tom L
Sep 7, 2011 - 12:33pm

Sometimes steeping away

and making lunch is a good thing. Yummy backyard eggs and pastured pork bacon with some whole milk goat yogurt (made fresh yesterday)..

Oh, and the HUI is at 619 and my board is turning green.

Ahhh. Fed and watered. Ready to watch the fun.


Sep 7, 2011 - 12:33pm


You are spot on IMO. Watch the exchange rates.. Hell to pay is an understatement. I might also add; watch carefully the Swiss mortgage markets. The Swiss have offered the most attractive mortgage rates in Europe (particularly Eastern), and has been attractive due to it's stability. I cannot fathom a mathematical solution for them not to avoid a huge housing bubble. A little surprised this has not been addressed, it's about to be the big white elephant.

Sep 7, 2011 - 12:35pm

re:German court = jokes

Yes, however....

We can now predict, in advance, court rulings and market manipulation. We can see why they make these decisions. It is crystal clear. They are absolutely f---ing desperate to perpetuate the madness.

The end is near and they know it. We know it. It's just over the horizon. Something wicked this way comes.

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