No Charts Today (updated with a chart!)

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:

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.

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:

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.

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


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

turd [at] tfmetalsreport [dot] com ()


Dec 28, 2011 - 12:55pm

Happy New Year, Troll !

First ! (Pardon my reverse post engineering !) It's hard to argue with success ! Fortunes have been made betting against the PMs ! Our day will come !

Dec 28, 2011 - 12:56pm

Smart Money


TPTB are buying up all the PM's they can right now. The plan is to push as many weak hands out of the market by driving the price down as low as possible. Don't be a fool. Be thankful for the discount and keep they are!

Dec 28, 2011 - 12:56pm

Thanks Turd

I still believe, and will keep the faith. Thanks, this is only site thats has great TA, and provides more balanced

Dec 28, 2011 - 12:57pm

MF global impact

check out Denninger today. Producers are realizing that it's too risky to hedge. Food shortages are likely, wild price swings assured.

I don't know if the airlines used MF global, but being able to buy a plane ticket months ahead of time, or lock-in electricity rates for 2 years may be a thing of the past.

Wallace HartleySmiddywesson
Dec 28, 2011 - 12:58pm

It's All Part of the Plan...

@ Smiddy, Keep the Faith Indeed!!! This is from a Feb., 2010 article by Peter Warburton and it sheds light on the current fiat debasement strategy. The entire article is very informative, here is a small sampling...

"What we see at present is a battle between the central banks and the collapse of the financial system fought on two fronts. On one front, the central banks preside over the creation of additional liquidity for the financial system in order to hold back the tide of debt defaults that would otherwise occur. On the other, they incite investment banks and other willing parties to bet against a rise in the prices of gold, oil, base metals, soft commodities or anything else that might be deemed an indicator of inherent value. Their objective is to deprive the independent observer of any reliable benchmark against which to measure the eroding value, not only of the US dollar, but of all fiat currencies. Equally, their actions seek to deny the investor the opportunity to hedge against the fragility of the financial system by switching into a freely traded market for non-financial assets.

It is important to recognize that the central banks have found the battle on the second front much easier to fight than the first. Last November, I estimated the size of the gross stock of global debt instruments at $90 trillion for mid-2000. How much capital would it take to control the combined gold, oil and commodity markets? Probably, no more than $200 billion, using derivatives. Moreover, it is not necessary for the central banks to fight the battle themselves, although central bank gold sales and gold leasing have certainly contributed to the cause. Most of the world's large investment banks have over-traded their capital so flagrantly that if the central banks were to lose the fight on the first front, then their stock would be worthless. Because their fate is intertwined with that of the central banks, investment banks are willing participants in the battle against rising gold, oil, and commodity prices.

Central banks, and particularly the US Federal Reserve, are deploying their heavy artillery in the battle against a systemic collapse. This has been their primary concern for at least seven years. Their immediate objectives are to prevent the private sector bond market from closing its doors to new or refinancing borrowers and to forestall a technical break in the Dow Jones Industrials. Keeping the bond markets open is absolutely vital at a time when corporate profitability is on the ropes. Keeping the equity index on an even keel is essential to protect the wealth of the household sector and to maintain the expectation of future gains. For as long as these objectives can be achieved, the value of the US dollar can also be stabilized in relation to other currencies, despite the extraordinary imbalances in external trade."

and a link to the rest of the article...

Frankenstein Government
Dec 28, 2011 - 12:59pm

I Keep Buying

Ya know back in my day trading days, I would never buy an equity on it's way down. Ever. It seems so unnatural and stupid that it's hard for me to do. I bought another 15 oz. of silver yesterday and 1/2 oz. round of gold. I told the guy I'd be back on Friday because I expected more price declines. Gold under 1600, silver under 30 is a screaming buy.

This is a five year buy and hold strategy with money I don't need. It's just tough to catch a falling knife.

Dec 28, 2011 - 1:04pm

from Jesse's Cafe Americain...

One could spend a lifetime studying the stock markets, for example, trying to make sense of them and their movements, and build an impressive body of study and rules, but fail miserably despite all that work, because you built upon the false premise that the game was honest and natural, and not often rigged and controlled by insiders.

Or perhaps some economic system like 'market capitalism' controlled by an oligarchy through the manipulation of money and information, just for example.

It may be summed up in the familiar saying, 'A little learning is a dangerous thing' and perhaps, 'Beware of wolves in sheep's clothing.'

"Whereas the truth is that the State in which the rulers are most reluctant to govern is always the best and most quietly governed, and the State in which they are most eager, the worst...You must contrive for your future rulers another and a better life than that of a ruler, and then you may have a well-ordered State; for only in the State which offers this, will they rule who are truly rich, not in silver and gold, but in virtue and wisdom, which are the true blessings of life.

Whereas if they go to the administration of public affairs, poor and hungering after the' own private advantage, thinking that hence they are to snatch the chief good, order there can never be; for they will be fighting about office, and the civil and domestic broils which thus arise will be the ruin of the rulers themselves and of the whole State."

Plato, The Republic

As with men and rulers, so with markets and money.

Greed is an excess of diligence and lack of empathy, outside of the virtues, and is therefore most decidedly not good. A system built upon greed, anger, envy, and pride will not, by definition, be virtuous but self-destructive.

And history will see us as fools for having believed it, giving up a Constitution based upon the first principles of goodness, equality, moderation, the careful distribution of power, and both freedom and justice for all.

Dec 28, 2011 - 1:04pm

TPTB are buying up all the

TPTB are buying up all the PM's they can right now. The plan is to push as many weak hands out of the market by driving the price down as low as possible. Don't be a fool. Be thankful for the discount and keep they are!


Hmm someone might even categorize this comment as a Bull Market...yes yes indeed :) Bull Markets like to take as few for the ride as possible. Stay strong folks, its not about the Fiat earned per ounce its about the Assets you hold in your hands no matter what the denominated fiat prices is.. Think about yesterdays China announcement at the close...And the ass kissing our Treasury official ( Term used loosely ) offered to Communist China...Something is up for sure.

The Green Manalishi
Dec 28, 2011 - 1:04pm
Dec 28, 2011 - 1:08pm

Glad, Sad, Mad.

On days like today I'm glad friends didn't take my advice and buy metal.

On days like today I'm sad that friends won't buy metal.

On days like today I'm mad that I've little funds left to buy metal.

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