Following Script

Fri, Dec 16, 2011 - 10:09am

I think we should all be very encouraged by the action overnight and into this morning. In terms of the decline, the bottom and the nascent recovery, things sure seem to be following script quite nicely.

The simple fact that Wednesday's low in Feb12 gold was 1567.60 was followed by yesterday's low of 1566.60 is enough to make me grin and chuckle a bit. I've consistently stated 1550-60 would be the bottom but that I could be off a little in that I'm just eyeballing things and drawing them out with a ruler and a sharpie. Coming within $7 is definitely close enough. Now, the key is, what happens next?

Of course I could still be proven dead wrong. Gold could plummet today or next week and crash right through 1550. However, I'm highly confident that it won't. There's a reason the decline stopped there. It would take some serious, fundamental changes to drive price much lower.

Late yesterday, I gave you $1600 as an important level to watch today and next week. Lo and behold, just as price surged through 1600 a few hours ago, dramatic capping measures were employed by the Forces of Darkness and gold was pressed back. I have a last of 1586. Silver was making a move on $30, too. Clearly, The Cartel does not want gold to immediately snap back and that's OK. Taking time and building a stout foundation and base is an essential precedent for the explosive price moves I see coming in Q1 of 2012.

As mentioned yesterday, I expect this base-building "project" to last 2-3 weeks. Some folks disagree, most notably this report that was posted to ZH earlier today. Don't get me wrong. If gold reverses here and quickly moves sharply higher, that would be just fine and dandy with me. I just don't expect it to play out that way.

OK, that's all for now. I'll check in again later, once we see what the day brings. TF

About the Author

turd [at] tfmetalsreport [dot] com ()


Dec 16, 2011 - 10:12am
Be Prepared
Dec 16, 2011 - 10:15am


That's all I can say....

Dec 16, 2011 - 10:16am


I am Turd!

Ferd Torgerson
Dec 16, 2011 - 10:17am

Been quite a while . .

. . . since I was Furst.

Dec 16, 2011 - 10:21am


Dollar is failing B/O of double top.

Brotha Bob
Dec 16, 2011 - 10:23am

Woke up this morning

Woke up this morning and what did I see green, and silver, and gold under the Christmas tree. Whipee!

Dec 16, 2011 - 10:32am


I have cash!

Just got off the phone with RJ O'brien. Apparently, about 2/3 of my cash was generously "released" by the trustee last evening. My funds will be available for trading by Wednesday of next week.

As you might imagine, I'll be taking this "found money" and buying some out-of-the-money gold calls. I mean, why the heck not? I never expected to get a single penny back.

Eric Original
Dec 16, 2011 - 10:34am

TGIF to all.   It's feeling

TGIF to all. It's feeling Christmasy around here today. Tom and Jerry's anyone?

Be Prepared
Dec 16, 2011 - 10:35am

Gold will Soar in 2012

Don't Be Fooled, Gold Will Soar In 2012

I am now bullish on gold and silver based on gold's current sell-off, the immediate incessant berating of the precious metal by pundits on CNBC and several other reasons. Silver is highly correlated to gold. In October 2008 the precious metal plummeted 18% and subsequently rebounded 23% over the next two months. I accurately predicted this move in an article I wrote on Aug 24th. The following is a brief description of gold’s current performance, my reasons why precious metals are a buy followed by my top seven precious metal picks.

Top Five Reasons Why Precious Metals Will Soar In 2012

  1. This is the eleventh 10% correction for gold since 2003. Gold has always bounced back and soared higher each time. Gold has been up 10 out of the last 10 years.
  2. A major portion of the drop can be attributed to a well-known year end occurrence regarding gold's performance in December. Gold market makers have closed up shop for year end. The big gold commodity funds have closed up for the year and have essentially stopped buying.
  3. Many hedge funds and major market participants have had to liquidate their gold positions recently due to the global liquidity crunch created by the eurozone debacle. Therefore, this is not an outright fundamental issue with gold but a temporary technical phenomenon that will soon dissipate.
  4. Recently many central banks of emerging markets lowered their interest rates, consequently lowering the cost of borrowing. In most cases inflation will outstrip the yield on savings, creating negative real interest rates. Thus, investors will take flight to precious metals and protect their wealth from devaluation.
  5. The relative strength index on spot gold remains below 30 indicating an oversold market which could attract buying.


Be Prepared
Dec 16, 2011 - 10:37am


I'm sooooo glad that you got some money back from MFing Global.... I just wish it was all of your money.

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