Gold and Silver Still Rangebound

Wed, Feb 15, 2012 - 10:49am

Man oh man, The Turd's head is spinning this morning. There is so much going on that we need to cover but there is not very much time. So, I'm going to split this content up into separate threads. This thread contains the latest charts. The threads that I will begin below are also important, though, and require your attention.

FYI, this is also kind of a test run for how this site will be changing next month. As the name implies, TFMR is a metals "report". I, your humble correspondent, will scour the news and blog wires every day and present to you individual threads where you can contemplate and discuss the issues. The comments section of the "report" threads will also be changed to a threaded format so that members can interact and discuss things on a chronological basis. At least, that's the plan. If Rule #7 of the TFMR guidelines isn't followed, however, I will switch things back to the way they are now.

So here are your charts for today. Once again, I start with the POSX. As you can see, there seems to be very little interest in taking The Pig out of its pen and through 79.60. However, a couple of headlines could blow this all away real quick so be careful.


Gold and silver tried to rally earlier this morning but, at present, they have been beaten back. Silver is particularly funny. Once again, it was allowed to rally exactly to $33.98 before getting jammed lower. You can see on the charts to the right that it even dropped all the way to 33.50. At the current time, I still have no trading positions and boy does that feel good. IF I can get the selloffs that I'm looking (hoping) for, I will be buying, though. We'll see.


Lastly, a few words about silver lease rates. As you can see on the chart below, rates have continued to decline this week and, as of yesterday, the 1-month rate was at -0.36%, just a scant 4 basis points from the seemingly critical -0.40% level. I've noticed quite a bit of discussion about silver lease rates, not only here but all over the PM blogosphere and I'd like to touch on a few things:

  • Monitoring gold and silver lease rates is an important task but not the sole indicator of an impending raid.
  • I'm pretty sure I was one of if not the first person in the blogosphere to connect the lease rate "dots" back in December and correctly warn you of the possible, impending beatdown.
  • Sharply declining silver lease rates and a sharply rising EE net short position should give you cause for concern regardless of what anonymous commenters might say.
  • I know that I'm not a paid troll or disinformation agent. I can't say the same for everyone else.
  • So here is your chart. IF rates dip below -0.40%, I will seriously consider buying some puts. IF silver dips toward 32 or even 31, lease rates turn higher and total OI drops as the EE covers shorts, I will be an aggressive buyer of paper and physical silver.


    That's all for now but look for some updated charts later today. TF

    About the Author

    turd [at] tfmetalsreport [dot] com ()


    Feb 15, 2012 - 10:51am



    Feb 15, 2012 - 10:57am


    Unbelievable... had a great "first" image to post and it got eaten up. Pining sad :-(

    Feb 15, 2012 - 10:57am


    :) Thanks, Turd! As always. Appreciate all you do.

    Feb 15, 2012 - 10:59am


    Woo Hoo

    Woops, guess thats Turd +1

    looking forward to the new format

    have a good day everyone

    be safe

    Feb 15, 2012 - 11:02am

    Last week

    I asked last week - if it is possible that Gold & Silver will be range bound for the next several (7-8) months - in order to get Obama in for his second term?


    How do you get Obama in for a second term - if Gold is @ $2,000? That means the number(s) for everything else (ie BSBLS, budget cuts, etc) wont look good for him and spoils his chances?

    Or do you think that wont even matter... Gold @ $2,000 AND Obama still gets in?



    Dr G
    Feb 15, 2012 - 11:02am

    Pig is through 79.60 as I

    Pig is through 79.60 as I type this (79.62). It's had a good surge the last little while. It might not be enough to propel it to 80.50, but then again...

    Feb 15, 2012 - 11:03am

    Jeck out OIL

    A little war, printing presses....oil is going up nicely. any calls on those? I still believe mins coming out today will give us a little spike. 2015 is just around the corner..let's get this end game over already.

    Feb 15, 2012 - 11:06am

    Turd, you're making a convincing argument...

    to look at options. I may have to set aside some fiat for a little exercise in finding if it is still as futile as it was back in '06. Anyway, thanks for the info with great charts.


    Dr G
    Feb 15, 2012 - 11:08am

    As an addendum, lease rates

    As an addendum, lease rates have moved in the positive direction for silver at the moment. Currently -0.3340%, which is up +.0210 points, according to Kitco.

    Also note that gold lease rates have dropped today (whereas yesterday gold lease rates had gains and silver had losses).

    I'm getting the data here:

    And they have this super simple explanation about lease rates (bold emphasis is mine): "Lease rates displayed are an indication only of bank to bank borrowing charges. The degree to which lease rates may be displayed as negative would suggest the degree to which there is a lack of demand to borrow the metal."

    Hi-Ho Silver
    Feb 15, 2012 - 11:10am

    Silver Lease Rate link

    Anyone got a link to the Kitco Silver Lease chart Turd is talkng about?


    Feb 15, 2012 - 11:11am

    I am waiting too

    Thompson believes we are in a sell zone right now. also the P&F chart turned down to a $1660 price a couple of days ago too.

    so I would love to see gold drop to about $1690 and silver to $32 to jump back in

    Feb 15, 2012 - 11:13am

    Cartel almost let it get away from them

    They are shooting their load trying to hold it down, but the buyers are still stepping up to the plate. If gold can hold 1730, and not fall all the way back to 1720 resistance, this is quite bullish. 

    Fed meeting minutes later today. Look for the bulls to push it higher then. I think the bottom is in, and a reversal is taking place. 1750/34 - here we come again! 

    Feb 15, 2012 - 11:18am

    Loving the silver risk/reward at 33.50

    33.50 acting as strong resistance. We get the Fed meeting minutes - from a very dovish fed board today, and it's going to show that QE3 is still alive and well. Look for a strong rally in PM's. 

    This is a gift we don't see too often. Cartel spent 40 cents worth of shorts to push silver from 33.9 to 33.5, with Fed meeting minutes showing QE3 alive and well. The revolver is half spent, and the bulls aren't going to take any prisoners. 

    Feb 15, 2012 - 11:19am

    I guessed that the month

    I guessed that the month would end up right back where it began, PM-wise.

    Come on yellow hat. Come to daddy!

    BrentLawrence Pining 4 the Fjords
    Feb 15, 2012 - 11:23am

    You can always edit!Previous

    You can always edit! Previous firster

    Feb 15, 2012 - 11:27am

    lease rates

     I am pondering buying ZSL call contracts if that lease rate goes to -.40. Anybody trade ZSL options? Can you get a fill when you want it? I had problems filling my AGQ option spreads last year when I was trading a bunch. 

    ... and Pining, you are not off the hook for the pic! We want to see it.

    Feb 15, 2012 - 11:30am


    Before you go all crazy basing your trades on lease rates, do some due diligence first. I believe somebody on seeking alpha had a good arguement that lease rates weren't really "all that". It gives good balance to the Ted Butler piece - which is very good too.

    Also, you better damn well verify that the kitco data is accurate. I would not trust that data feed to make trading decisions. Also, why play ZSL? Silver has been very bullish lately. That seems to be where the speculative money is going right now. Just follow the trade, forget lease rates.

    Feb 15, 2012 - 11:32am


    I've been buying silver spreads December 2013 38-39 a couple of weeks ago. they were $1200 and maximum return-$5k. so if in the short term silver goes down im not worried and just sit back and relax. Ill continue building on these spreads on any weakness. I've also purchase gold spread for Dec 2013. I've found it best to go long and not worry about the day to day/week to week moves. after last year I got burned, and while my reward may not be as great, i save my self from shitting in my pants

    Groaner lairdwd
    Feb 15, 2012 - 11:35am

    they have unlimited paper,

    they have unlimited paper, NEVER count them out.. believe me

    Feb 15, 2012 - 11:37am
    Exbroker Pining 4 the Fjords
    Feb 15, 2012 - 11:51am

    Wow! This is boring the shit out of me.

    Silver is like watching paint dry. Last time I was this bored was in 1979. I was buying oils back then. Suddenly for some reason Standard Oil turned into BP. Explain that to me.

    Feb 15, 2012 - 11:54am

    @ Fried Eggs - Obama

    Obama probably will get reelected regardless of the price gold is trading at, especially if the Republicans are foolish enough to put Romney or Santorum or Gingrich or another Bush up against him.

    Stratajema Dr G
    Feb 15, 2012 - 11:56am

    Re: As an addendum, lease rates

    >>The degree to which lease rates may be displayed as negative would suggest the degree to which there is a lack of demand to borrow the metal."<<

    Yet we are told by the pumpers at King World News that silver is in backwardation.

    Feb 15, 2012 - 12:00pm

    Addendum to my "First" post above...

    Hope you get a kick out of this, I've been saving it for when I got First again!

    Feb 15, 2012 - 12:02pm

    Does the typical Obama voter

    Does the typical Obama voter know or care about the price of gold?

    Katcall4 Hi-Ho Silver
    Feb 15, 2012 - 12:12pm
    Feb 15, 2012 - 12:14pm


    That was epic!!!

    Feb 15, 2012 - 12:15pm

    lease rates?

    If that is such a powerful indicator why is apmex paying $1.50 over spot for silver eagles and maples?

    Dr G
    Feb 15, 2012 - 12:20pm

    This kitco lease info doesn't

    This kitco lease info doesn't include the visual chart, but has a table that seems to update more frequently (I think the chart only updates at the close of trading for the previous day):

    EDIT: you can click the little graph picture next to the metal name and it takes you to the visual charts.

    Feb 15, 2012 - 12:30pm

    Since you just joined 14

    Since you just joined 14 minutes ago, you probably didn't see this on Monday:

    You should take time to read it. Thanks for joining!

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