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

ScottJ
Sep 7, 2011 - 9:43am

Keep A Sound Perspective

There is little more than a year, if not months left on this horrid keynesian system. The paper game will go where the paper game wants to go, don't let yourself get too caught up in it. We know there is manipulation and inherit evilness in the markets, don't be caught surprised!

Time is more precious than the metals that we discuss.

Keep honing in on preparations of all sorts, for one day not to far away, the comforts of today will be gone, as that is what the EE are really protecting, the dollar standard.

tmosley
Sep 7, 2011 - 9:43am

Tmos, thanks.

Thanks for the reminder as I failed to mention this earlier.

Anyone buying options in this market MUST pay up and buy time. December 11 is probably OK but you might even consider going out to Feb12 in gold.

ScottJ
Sep 7, 2011 - 9:44am

Scott, thanks.

Keepin it real.

cris
Sep 7, 2011 - 9:45am

Trolls are hitting the blog harder and harder

"Michael222" joins the blog 15 minutes ago and leaves a message that "Patrick Wright" gave us all good advice that we are foolish not to have taken. Hmmmmmmm.........

Thanks for the advice (sic).

BTW, this isn't a retracement to a 61.8% Finonacci level. This is a BLATANT attempt at market manipulation by very nervous and increasingly desperate bankers who are attempting to "paint the tape".

margaritatime
Sep 7, 2011 - 9:45am

Turbulent times con't

Like I said before, there is going to be an effort to discredit PMs as a safe haven. We are entering the waters that will test people's will to hold through the storm. No matter what happens going forward do not relinquish what you have. It isn't going to make sense to TA's, it never does when unfundos are thrown out there. HOLD, and buy these dips if you have powder, the Chinese sure as hell will be.

Added: What would be interesting to see is a consorted effort in Asia to hold on buying (unlikely, but it has happened before). That is the only case I can see a correction to the 16 range. If you couple that with a gaining POSX - perception is everything. Keep in mind that a margin increase does not just happen when a rise in price happens, I believe the SPAN algos can be triggered on any volatility. In other words, I think it is a round in the chamber, and not all of these factors are going to occur in a single day.. What a better way to taint perception right? After all, it's all about perception and confidence.

tpbeta
Sep 7, 2011 - 9:45am

Monkey time

In the immortal words of Hugh Hendry, 'only monkeys pick bottoms'. Well I'm a monkey this week, and I'm counting on the Turd to find the bottom of this one for us. Go TF.

Number 47
Sep 7, 2011 - 9:46am

repost from the old thread

A popular inflation beater in the UK is shelved (again) due to demand. Just where are people supposed to put their money these days?

https://www.bbc.co.uk/news/business-14818516

I'd also like to say thanks for the replies on my allocated storage problem, I slept on it and am still not sure what to do. I'm taking delivery of the gold I have there as there is no VAT, the silver I need to consider the options some more.

OC15
Sep 7, 2011 - 9:47am

0%

Thanks for the dip and the 2 more years of 0% interest rates. Now I will just load up another 0% APR CC with physical.

tpbeta
Sep 7, 2011 - 9:48am
Tom L
Sep 7, 2011 - 9:49am

SVM

Putting in a nice little rally here, just broke the 20 hour MA, and it threatening the downtrend line on the hourly chart. A move above $8.05 would be very good news for long-suffering longs. But the 20 hour MA should be stiff resistance for a while.

Ta,

Subscribe or login to read all comments.

Contribute

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 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

Key Economic Events Week of 8/5

8/5 9:45 ET Markit services PMI
8/5 10:00 ET ISM services PMI
8/6 10:00 ET Job Openings
8/8 10:00 ET Wholesale Inventories
8/9 8:30 ET Producer Price Index

Key Economic Events Week of 7/29

7/30 8:30 ET Personal Inc/Spending & Core Inflation
7/30 10:00 ET Consumer Confidence
7/31 8:15 ET ADP employment
7/31 2:00 pm ET FOMC Fedlines
7/31 2:30 pm ET CGP presser
8/1 9:45 ET Markit Manu PMI
8/1 10:00 ET ISM Manu PMI
8/2 8:30 ET BLSBS
8/2 10:00 ET Factory Orders

Key Economic Events Week of 7/22

7/23 10:00 ET Existing home sales
7/23 10:00 ET Richmond Fed Manu Idx
7/24 9:45 ET flash Markit PMIs
7/25 8:00 ET Count Draghi/ECB policy meeting
7/25 8:30 ET Durable Goods
7/25 8:30 ET Wholesale Inventories
7/26 8:30 ET Q2 GDP first guess

Key Economic Events Week of 7/15

7/15 8:30 ET Empire State Fed Index
7/16 8:30 ET Retail Sales and Import Price Index
7/16 9:15 ET Cap Ute and Ind Prod
7/16 10:00 ET Business Inventories
7/17 8:30 ET Housing Starts and Building Permits
7/18 8:30 ET Philly Fed
7/19 10:00 ET Consumer Sentiment

Key Economic Events Week of 7/8

7/9 8:45 ET Fed Stress Conference, three Goon speeches
7/10 8:30 ET CGP Hump-Hawk prepared remarks
7/10 10:00 ET CGP Hump-Hawk House
7/10 10:00 ET Wholesale Inventories
7/10 2:00 ET June FOMC minutes
7/11 8:30 ET CPI
7/11 10:00 ET CGP Hump-Hawk Senate
7/11 12:30 ET Goon Williams
7/12 8:30 ET PPI

Key Economic Events Week of 7/1

7/1 9:45 ET Markit Manu PMI
7/1 10:00 ET ISM Manu PMI
7/1 10:00 ET Construction Spending
7/2 6:35 ET Goon Williams
7/3 8:15 ET ADP June employment
7/3 8:30 ET Trade Deficit
7/3 9:45 ET Markit Services PMI
7/3 10:00 ET ISM Services PMI
7/3 10:00 ET Factory Orders
7/4 US Market Holiday
7/5 8:30 ET BLSBS

Key Economic Events Week of 6/24

6/25 10:00 ET New Home Sales
6/25 1:00 pm ET Chief Goon Powell
6/25 5:30 pm ET Goon Bullard
6/26 8:30 ET Durable Goods
6/27 8:30 ET Q1 GDP final guess
6/28 8:30 ET Personal Income and Consumer Spending
6/28 8:30 ET Core Inflation
6/28 9:45 ET Chicago PMI

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

Recent Comments

by Marcus, 16 min 40 sec ago
by kkingchiro, 26 min 51 sec ago
by lakedweller2, 36 min 17 sec ago
by Outback, 53 min 58 sec ago
by procog, 1 hour 4 min ago

Forum Discussion

by sierra skier, 2 hours 3 min ago
by NW VIEW, 3 hours 5 min ago
by Porros, Aug 21, 2019 - 5:00am
by sierra skier, Aug 20, 2019 - 5:12pm
by zman, Aug 20, 2019 - 4:53pm