No Charts Today (updated with a chart!)

258
Wed, Dec 28, 2011 - 10:20am

Because it's all just nonsense. The euro just dropped for no real reason. The incumbent rise in the dollar caused the metals to take the elevator down about 5 floors. Silver has broken through 28 and looks now to be headed toward 26. Maybe by next week we can begin to assess the damage The Cartel is inflicting. Until then, all we can do is watch.

Here's your euro headline, from ZH:

https://www.zerohedge.com/news/eur-plunges-thin-market-below-13000

I found this next article on Harvey's site last night. It was also highlighted on ZH yesterday. You absolutely must take time to read it today if you haven't already. It's a challenging read in that there's a lot of economic stuff that, if you're not patient with it, can glaze you over real fast. My advice is: be patient with it. Take your time and read it carefully.

https://www.zerohedge.com/news/why-ecbs-ltro-wont-stop-collateral-contagion

Just a few more words about OI and the gradual demise of the Comex. First, another link. This one is from JS Kim. He covers many of the things we began discussing here about three weeks ago. It's a good summary, though, and worthy of your time:

https://www.zerohedge.com/contributed/did-bankers-deliberately-crash-mf-global-crash-gold-and-silver-prices-0

As we speculated earlier this month, total OI in the metals continues to decline. Gold looks like it may soon fall under 400,000 contracts. Again, what I believe we are seeing is a trend of investors and traders simply walking away from the Comex. After MFGRAP, why would anyone in their right mind buy and hold gold and/or silver through that system? The drop in OI will be gradual but over time, as participation wanes, the Comex will simply become less and less significant in setting the physical price of the PMs.

We all have high hopes that PAGE will accelerate this demise. News yesterday caused great concern that the opening of the PAGE may be delayed or canceled.

https://www.bullionstreet.com/news/chinas-pan-asian-gold-exchange-in-trouble/683

I've tried to get some additional information on this but I'm not making much progress. It seems to me that this is a crackdown, by the Chinese government, on non-governmental exchanges and PAGE is, of course, a government-sponsored entity. Let's hope that all remains on track for a Q1 opening. I will, of course, pass along any additional information that I am able to gather.

As I close, gold is at 1575 and silver is at 27.67. Yikes! I fear that there is more of this to come as The Cartel is clearly in charge this week. There simply aren't enough buyers to counter all of the Cartel selling pressure and, once stops get triggered below previous lows, prices can fall pretty fast. Silver made a low last January around 26.50. That would seem to be where it's headed now. I'm still hoping that 1550-1560 will hold as a bottom for gold. We'll see.

Hang in there. Keep the faith. TF

12:30 EST UPDATE:

OK, I lied. I can't help myself. Here's a chart. Actually, it's a repost of a chart from last week.

What I was trying to demonstrate here was that history shows us how gold responds when it hits the main trendline. It has never sharply rebounded. Often, as denoted by the arrows, it skips along the line for 2-4 weeks before moving higher and away from the line. We are seeing the same thing play out today.

Of course this comes with a caveat. The MFGRAP may be changing the rules on this thing. IF gold drops convincingly through 1550 and heads toward 1500, all bets are off. IF, however, this primary trendline continues to support gold (as I think it will), then gold should stop somewhere between 1550 and 1560 before finally rebounding sometime in the next 2 weeks.

Obviously, we are at a critical moment in determining the future trend of paper gold. Watch things closely. TF

About the Author

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  258 Comments

bellyacre
Dec 28, 2011 - 10:21am

first

first

jaynutter
Dec 28, 2011 - 10:22am

first second!

first second!

sir
Dec 28, 2011 - 10:23am

Yearly silver chart

Silver ended 2010 at $30.91.

It is going to end 2011 well below that.

Who'd have thought that in April?!

sir
Dec 28, 2011 - 10:32am

Yep

And, believe me, if its at all possible for The Cartel to take gold down over the next three days and close it below its 12/31/10 close, they'll do it.

I just don't think they can but, given the total shunning of the Comex by buyers of physical, maybe they can.

Shill
Dec 28, 2011 - 10:35am
Dr G
Dec 28, 2011 - 10:35am

Hope you had a good

Hope you had a good Christmas, Turd.

Don't anybody sweat this price action. Start thinking in ounces of metal. Use the price only as a gauge when buying (which means the lower prices should put a smile on your face!!).

Be Prepared
Dec 28, 2011 - 10:36am
austrian12874
Dec 28, 2011 - 10:37am

yes

it is certainly disheartening watching silver tank like a bitch....i think we are going to 21

RedRover
Dec 28, 2011 - 10:37am

re: Keep The Faith

re: Keep The Faith.

Will do.

PaullyMoore
Dec 28, 2011 - 10:43am

57

Gold/Silver Ratio. If gold falls to 1500, that would imply a 26.32 price of silver at a 57 G/S ratio.

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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
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10/2 8:15 ET ADP jobs report
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Key Economic Events Week of 8/19

8/21 10:00 ET Existing home sales
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Key Economic Events Week of 8/12

8/13 8:30 ET Consumer Price Index
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