The Significance of 1665

Fri, Jan 20, 2012 - 11:04am

I was recording this week's podcast yesterday when it finally dawned on me. Frankly, I'm disappointed in myself that I didn't figure it out sooner. Take your eye off the ball and get a little distracted and this is what you get. No matter, at least now we know.

First, some history. Without a doubt, the $250 run in gold over five weeks in August and September was almost entirely caused by Cartel short-covering and we spent a considerable amount of time discussing this last fall. In summary, the gold CoT numbers told the tale. The CoT from Tuesday evening, August 2 was:

Spec long = 292,000

Cartel long = 155,000

Cartel short = 443,000 (Cartel net short almost 3:1)

Gold price = $1650

By Tuesday evening, September 6, the picture had changed rather dramatically:

Spec long = 248,000 down 15%

Cartel long = 174,000 up 12%

Cartel short = 402,000 down 9% (Cartel net short almost 2.5:1)

Gold price = $1900 up 15%

Again, this is why the reporting of a gold "bubble" was such utter nonsense and any reporter/blogger espousing that idea is to be permanently avoided because that person is either stupid or deliberately misleading you. Gold went up 15% in five weeks because The Cartel panicked and began to rapidly decrease their net short position. As you can see in the data above, the speculative (supposedly dumb) money was selling into the strength, undoubtedly locking in gains along the way.

So, now, put on your thinking cap. Try to recall what happened shortly after August 2, 2011. Anyone? Anyone?

After the close on Friday, August 5, S&P announced that they were downgrading the credit rating of the U.S. from AAA to AA+. I believe this singular event was the "final straw" for the banks that have been willfully manipulating gold and silver for decades. All of the market action since has been a reaction to the S&Ps move. The massive and deliberate takedown of gold and silver in late September was orchestrated to drive price lower so that The Cartel and The EE could continue covering their massive short positions but at a much more profitable, lower price. This effort continues to this day. Look at the latest CoT numbers:

Spec long = 166,000 (down 43% from early August)

Cartel long = 160,000 (flat from early August)

Cartel short = 327,000 (down 26% from early August) (Cartel net short now 2:1)

Anyway, the point of going through all of this again is to demonstrate that The Bullion Bank Cartel clearly got spooked and changed their modus operandi post the S&P downgrade announcement of 8/5/11. Getting back to current day, how does this affect current price and technical action. Well, my brothers and sisters, $1665 is exactly the opening level of gold on Sunday evening, August 7, when the metals resumed trading on the Globex. For the next several weeks, we speculated upon whether or not gold would ultimately fall back and "fill the gap". Nature abhors a vacuum and charts abhor gaps. Always have and always will.

It didn't take too long, unfortunately, for us to have our answer. Here's a reprint of a chart from September 23 where we were watching the 1665 level very closely:

Clearly, by reviewing the action of this week, a line has been drawn by The Cartel. They do not want to see gold move back above least not yet. They may soon get overwhelmed and lose the battle but, as we've seen on the charts and in the daily growth of open interest, The Cartel would like very much to keep gold under wraps for a little while longer. Do they want to get their gold net short position to 1:1., similar to the progress the EE has made in silver? Maybe, but the fundamentals in gold are so overwhelmingly strong that I don't think that they are going to have the time to pull this off. (It's taken The EE almost 9 months to move from the same 3:1 net short position to the current 1.5:1. It will be nearly impossible to hold gold in its current range for another 6 months.)

Anyway, now we know why 1665 is so important to The Cartel. Hopefully, near-term pressure will force gold higher and through that level. The Pig and DrC are helping its cause. However, next week is option expiry for Feb12 and first day notice, too. You've got to expect that The Cartel will try to keep gold down for a while longer.

By the way, you can bet your batooty that the next, major resistance for gold will be 1705. Longtime turdites will undoubtedly recall the significance of that level, too.

Lastly, here are three items that you need to check out, either today or over the weekend. First, another KWN interview of Santa. (I've tried to get Santa to do a podcast but he won't commit. I'll keep trying.)

Someone sent me this article that discusses the PAGE. The author claims that the exchange won't be open until June. Nuts. I've sent a few emails trying to confirm this. I'll let you know if I hear anything.

And, lest your heart despair with CNBS et al fawning over the "earnings" report of Bank of America, Dave in Denver knocks it out of the park with this analysis. Be sure to read:

That's all for now. Please check back later this afternoon as I will be posting TFMR podcast #11. As I mentioned above, I recorded it yesterday and it's a pretty good one. Thanks again for all of your support! TF

12:20 pm EST UPDATE:

Very, very nice FUBM rallies this morning, particularly in silver where the price is now $31.50, well clear of $31 and headed toward stout resistance near $33. (Do you recall the significance of that level, too?)

That said, we must watch things very closely here. The charts below are self-explanatory.

Stay vigilant. TF

About the Author

turd [at] tfmetalsreport [dot] com ()


Jan 20, 2012 - 11:59am

This seems written as if we

This seems written as if we disagree, daystar, but I don't think we do.

The Cartel is methodically exiting their short position for many of the reasons you mention.

Groaner DayStar
Jan 20, 2012 - 12:00pm

I agree

The Rothchilds are behind it too.

However they will not succeed. They have to come face to face with their maker who has different plans..

gog of magog is being pulled into the final battle.

balz beardeus
Jan 20, 2012 - 12:02pm

@beardus: You may be right.

@beardus: You may be right. It all depends what you are. If you are a long-term investor, then you sit tight and wait for the ratio to go to single digit (it will). If you are a trader, then you can switch along the way. But if you are a trader, you can get in trouble doing this, because we never know when the price suppression of silver will stop to work. As far as we know the PAGE could launch silver to 200$/oz in six months... Not likely, but not impossible. The ratio can go back to 15:1 or 10:1 very fast...

Jan 20, 2012 - 12:04pm

Dr. Copper

Looks very good to me.

Dr G
Jan 20, 2012 - 12:07pm

It may sound like electronic

It may sound like electronic harassment, but please feed the Turd today. I just kicked in $31 and it took less than a minute to do it. I don't make any money off trading (I actually LOSE money on options because I'm retarded!)--but I enjoy the company of everybody here and really enjoy Turd's insights.

FEED HIM to show him your thanks!

​@DayStar, thanks for your post. I always enjoy what you have to say. Lots to think about in those few short paragraphs. I agree that the EE is not stupid (where as Ranting Andy believes they ARE too stupid to actually be planning all of this is advance).

Mariposa de Oro TF
Jan 20, 2012 - 12:08pm

Thanks, Turd.  I was feeling

Thanks, Turd. I was feeling stupidier after reading the RawStory crapola. Now, I'm feeling like my old self after having read the article you linked to. I even posted the last three paragraphs, link and a challenge than non of them would actually read the article to the end. lol I feel like stirring the pot today. :0)

Jan 20, 2012 - 12:09pm

Jim Wille Latest

Any perusal around the world these days features Southern Europe crippled, preparing for the inevitable Greek Govt Bond default. It features a crippled US housing market, a mockery of statistical accounting in the US Gross Domestic Product, the plight of the COMEX with established veterans clearing out desks (not trading), the extreme physical demand reported by the London Trader, and the indictment of the SLV iTrust Silver Fund tool used by the cartel. The survey does not look favorable toward stability. The banking, economic, and political leaders have not pursued reform and remedy in any remote sense. Their only tool left is hyper inflation...

Edited for brevity by Moderator Washington.

​Please don't post entire articles. A little taste, and a link please.

Anybody got a link to this one?

Jan 20, 2012 - 12:09pm


LOL.. Specs have arrived!! Rotation back into gold/silver has begun.

Dr G
Jan 20, 2012 - 12:12pm

It will be VERY interesting

It will be VERY interesting (as usual) to see the OI numbers from today.

So, gentlemen (and ladies), we can choose to believe several things. Given that silver is going PARABOLIC at this moment on the 10 minute charts and that it has CRUSHED through the cap of 30.60 is splendid fashion...

Either money has arrived into the Comex and contracts are getting purchased OR the Cartel is retreating back to the next point of resistance (for reasons I do not understand) OR this is a set-up to suck money in for a huge raid given the dates we have coming up OR somebody leaked QE3 at the FOMC next week OR this is simply rumor of QE3 next week.

So take your pick, but pick wisely. :)

Jan 20, 2012 - 12:15pm

If you don't have much physical now, then

I think you better run to get some

Dr G
Jan 20, 2012 - 12:16pm

From the blog last year, but

From the blog last year, but the writing applies to today. FUBM:
Jan 20, 2012 - 12:17pm

Investors Pay to Hold Bonds

While likely not news to Turdites, I just can't help pointing out how ridiculous the bond market is. Investors, if you can call them that, are actually paying the US for the pleasure of lending money. Per Reuters - "These latest 10-year TIPS cleared at a yield of minus 0.046 percent, lower than what traders had expected." And of course, we all know that TIPS are run off of the government under reported CPI, so the negative yield is actually much worse.

Dr G
Jan 20, 2012 - 12:17pm

@groaner: don't buy into

@groaner: don't buy into strength. #1 rule of buying physical. It's not going to the moon today. We will retrace portions of this. The Cartel will see to that.

Jan 20, 2012 - 12:18pm

WOW Gold/Silver showing a spark - FIRE next???

At 12:14 Gold broke above - now @ 1665.55

Silver now @ 31.44

Jan 20, 2012 - 12:19pm

May get another buying opportunity at the 1:30 Crimex beatdown

Don't know if the beatdown will happen today, but that would be the time for those crooks to beat it down to 31 again. Reload though. OpEx or not, the train has left the station, and is making a beeline to 1700/32.5.

Jan 20, 2012 - 12:20pm

gold just hit $1666 and put the breaks on

I guess this will be Custers last stand?

Jan 20, 2012 - 12:21pm

Jan 20, 2012 - 12:23pm



Be Prepared
Jan 20, 2012 - 12:23pm

@Dharibaba - Don't post entire Articles

For the most part just pick a few paragraphs and then link back to the rest of the article.... don't want Turd to have copyright concerns! :-)

Jan 20, 2012 - 12:28pm

12PM is another smack down time..

looks like they are in waiting mode. its about time we see a little life in the metals.

just need the miners to get a clue.

Jan 20, 2012 - 12:30pm

Gold and 1665

Interesting on 1665 number. Also check on chart how 1665 is appx low of wave 1 down from the correction that began at 1804. The first low of that sell off, circa Nov 21st is right at the 1665. And in a perfect round out of time, we're back at that level going into Jan 21st -- two months ago. If we removed the holidays since then, Thanksgiving, Xmas, New Year's and MLK day, it would be a FIB 55 day event. A wekkly close above that area, say 1665-1678 would suggest that the 1700-1750 area will become the next target. I'm not an Elliot bug by any means, and don't use it to trade. Significant enough is that action on the week of Nov 21st, when gold initially supported that 1665 level that entire week. So, its clearly an important price point to consider, esp with the interesting tid bits that the turd has provided. Silver seems to be suggesting higher into next week if we get a close above the 31.05-31.20 area. Next resistance would become 32.00-32.50

The other tidbit is the 1650-1700 area is where price is double the 1980 highs. And why mention that ? --- Its the anniversary date as that 19 year peak was on Jan 21st 1980. Happy b-day.

Dr G
Jan 20, 2012 - 12:31pm

Thanks and don't forget...

...that there are plenty of FUBM shirts and caps available at the TurdMart!

Jan 20, 2012 - 12:32pm

silver sitting at $31.495

see if it can break the round number.. whoops peeking a tad thru.. ,, its a maybe.

Jan 20, 2012 - 12:33pm

The REAL reason 1666 is so important...

"Evil" Empire, 1"666", number of the beast... need I say more ;)

Jan 20, 2012 - 12:33pm

From Ed Steer's Gold & Silver Daily: repost

I guess he gets the respect he has earned

Jan 20, 2012 - 12:38pm

dr g,


= very nice but...

= a sign of things to come?"

an interesting side note on the silver/copper correlation; a very large part (50%?)of silver mine supply is as a by-product of copper. of course there is considerable time-lag in this, but it affects the long term fundamentals. the scenario goes: dropping copper prices encourage copper producers to reduce production --- reduced copper production leads to reduced silver by-product output --- leading to reduced silver supply to market ---pushing silver prices up, not down. admittedly this assumes an honest market and sufficient time for these effects to come into play...

Jan 20, 2012 - 12:42pm


Thanks for slicing and dicing that up for us. I wish I could find a bigger version of that GSR chart and a more up to date one. I think that one is up to 1998 or so. Kind of tough to read and cipher out.


And the Cartel 'spooked" thing.

I think all of us are agreeing for the most part on what happened. Spooked, alarmed, uptight and worried fit as words also. Maybe they were just "ready". They seem to be well prepared (and heeled) to do all of this at a instant in the markets. Just look at some of those very short waterfalls we see from day to day. That takes some real juice and they're not the shy types.

I'm not sure if they were spooked or just waiting on the moment when it finally arrived (gold spiking) and they knew instinctively and purposefully that it was time to start shorting en masse'. All the while getting ready for the subsequent sell off/shorting that they were mostly responsible for. They knew the day was coming and were ready in a big way. Unfortunately, they get to have their cake and eat it to.

We technically double topped at aprox. $1900 in August and they must have loaded up long after the subsequent free fall in September but just before Operation Twist on Oct. 1st.

That's what I'm seeing when I look at charts of Au and the miners and the over S&P since then plus the dollar and Euro mixed in there. A perfect salad of events that tossed the whole picture up for over 3-4 months. Not to mention all of that EU rumor/innuendo during that whole time.

We weren't sure what to make of Op Twist on Oct. 1st at the time, but the charts tell the story for the most part. So do the charts from the first trading after Christmas this past year.

Imho, they are doing many, many unannounced things at once in the EU and with the help of the Fed Swap line without any real gargantuan numbers attached to any one measure. There are many things in place going on all at once. It's a slow motion scatter gun ( not the bazooka) that they haven't affixed a name to out of political considerations on both sides of the Atlantic. The Fed's Swap lines are largely responsible imo for any of this to be possible.

How else to explain a relative "no reaction" to all of those downgrades to the EU/France and the EFSF etc. and the markets essentially have yawned. There was a credit event that happened and they fawned it off as a rescheduling or some other innocuous language. That's what they do and have been doing. The spreads on bonds have tightened up considerably and there seems to be no problem with Italy, France, Spain etc. anymore. Seems kind of odd, don't ya' think?

And what of that EU bond sterilization fund or process taking place over there? What's that all about? They're buying assets on the QT and not in a announced QE. Think about it. And the IMF is very actively involved at the same time to the tune of many 100's of billions, maybe trillions.

This market grinds up because the one thing they don't want or that they won't let happen is asset deflation. Which is why they have been re-inflating what they have the whole time (over and over) with asset purchases ala the Fed's style.

Just unannounced. So far.

Jan 20, 2012 - 12:46pm

@Dr. G

Silver didn't participate in the Dr. C leg up. This is just catch up time. Some of this action has got to be OpEx related. Turd makes a good point about the cartel painting the tape. Will be interesting to see to things:

1. Will there be a 1:30 crimex beatdown ?

2. What will the action look like after 1:30 and after 4 PM close today? Looks like the SLV crowd wants to push it right up to 32 for OpEx.

Dr G
Jan 20, 2012 - 1:01pm

@lairdwd, thanks for the

@lairdwd, thanks for the words of wisdom.

I don't think we will see anything at 1:30 (silver Comex closes at 1:25 as I recall) other than the usual profit-taking on the Globex. It might actually heat up further after that into 4 pm. Fingers crossed.

It's also very interesting to watch the different movements in these two metals today. Both up, but silver is absolutely crushing gold on a % basis.

Jan 20, 2012 - 1:01pm


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