Stand Back

Mon, Dec 12, 2011 - 9:23am

I trust that today's action doesn't come as a surprise to anyone. If you are still trying to trade this "market", I hope you are short.

Rather than regurgitate all that we've discussed since last Wednesday, let's just sum up:

1) Central banks are lending gold to the bullion banks at a negative rate of over -0.5%. This means that the EE can borrow gold and sell it on the Comex or LBMA and actually get paid interest to do it! The last time we saw lease rates this low was back in September and we all remember what happened then.

2) EE selling has now turned the charts decidedly negative. WOPR is using this information to accelerate that downward pressure by mindlessly spitting out sell orders.

3) Actual human beings are selling Comex paper because they are finally learning via the MFG-HSBC lawsuit mess that trusting your broker to hold and/or deliver your precious metal is a fool's errand.

That's a lot of combined selling pressure. Regardless of the fundamentals, paper metal is going down. How far? Well that's the question, now isn't it?

It may be foolish to try to find support and a bottom by looking at the charts. What do I know? I'm just a Turd. However, there will be a point where investors and traders will halt the paper carnage, if anything because the paper system still exists and there will be an arbitrage opportunity with physical. So, what do the charts show? I'll let you draw your own conclusions but I think you can plainly see where ultimate support will lie. I wouldn't buy any futures, options, etfs or miners until we get close to these levels.

Lastly, just another word about the discussion I had over the weekend where "bulk" metal prices were mentioned. Please use your brains on this. Of course anyone can log onto Apmex and buy a couple of AGEs for 5% over spot. That's not what I'm talking about. I'm talking about big money. Big money. If you've got 20, 30 or 50 million dollars you're looking to move into gold and/or silver....and you want it in your hands and out of JPM or HSBC or are going to pay a very hefty premium. It appears to be something like $200 over spot in gold and $7-8 over spot in silver. Non-cartel metal in bulk size is very hard to come by. One only needs to review the MFG-HSBC lawsuit documents to get a feel for why.

I've got a last of 1666 in gold and 31.07 in silver. If you're trading, I sincerely hope that you heeded my advice back on Wednesday and Thursday and used the strength of Friday to liquidate some longs. If not, be prepared for at least another $100 on the downside. Paper is de-coupling from physical and the process is going to be ugly and bizarre. We are sailing into uncharted waters where anything is possible.

Be cautious. Do not use margin or leverage. Buy physical only. Prepare accordingly. TF

About the Author

turd [at] tfmetalsreport [dot] com ()


Dec 12, 2011 - 9:30am

But I should add

None of this changes my outlook for 2012. In fact, it only enhances my confidence.

Gold and silver are going to dramatically appreciate against every fiat currency next year.

Dec 12, 2011 - 9:30am

watch the 150 day MA

So far it hasn't failed on a closing basis in about 3 years. just saying, although i am cautious too.


ps first?

Dec 12, 2011 - 9:31am


By physical only folks.

Dec 12, 2011 - 9:32am

Paper gold and silver?

Or real gold and silver Turd?

Violent Rhetoric
Dec 12, 2011 - 9:37am

Looking at the 5 year

Looking at the 5 year charts I fear we may see a 24 handle on silver before this is over and low 1500's on gold.

Dec 12, 2011 - 9:41am

Year is almost over

Maybe ill get a coma induced and i can wake up around march:)

Dec 12, 2011 - 9:41am

Year is almost over

Maybe ill get a coma induced and i can wake up around march:)

Dec 12, 2011 - 9:41am

sheep shearing

before BEN mentions the "Q" word tomorrow????

you don't think they're all back slappin buddies do you? think?
Dec 12, 2011 - 9:42am


Tomorrow's another FOMC meeting. It seems like few are expecting Bernanke to announce another buying program, but he has to do so soon.

Air Garcia
Dec 12, 2011 - 9:43am

@OC15: Real, bro, real. physical

the paper markets are getting "found out" in other words ... i don't know what your history is on this, but the paper gold is "sold" 100x for every 1 oz of real. in both silver and gold. it's supposed to be a 1-1 ration, but it's a 100-1 ratio which is kinda bunk.

Go buy physical ... now looks like a great opp to buy and hold phusical - in your hands.

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 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

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

Forum Discussion

by NW VIEW, Sep 19, 2019 - 11:07pm
by Boggs, Sep 19, 2019 - 10:35pm
by Boggs, Sep 19, 2019 - 10:21pm
by NW VIEW, Sep 19, 2019 - 9:29pm
by sierra skier, Sep 19, 2019 - 8:05pm
by Boggs, Sep 19, 2019 - 5:26pm