Audacious Gold Manipulation

194
Mon, Feb 27, 2012 - 4:13pm

Look, we all know that gold and silver have been manipulated and suppressed for years. For traders and stackers, the ongoing manipulation has just become a simple fact of life. The suppression is so regular that it can be used as a sort solunar table for those only wishing to "hunt" at the optimal hour.

However, this regularity and predictability should gall you instead. At it's core, it is sheer lawlessness or, stated differently, an absolute indifference to the rule of law or the concept of free markets. In a "normal" course of events, one wouldn't dare attempt to manipulate a market for fear of being caught. This fear would undoubtedly cause someone attempting to manipulate a market to do so in darkness, so as to avoid detection and, ultimately, prosecution.

What are we to make, then, of blatant manipulation in broad daylight? The simplest answer, I believe, is that the manipulator has no fear of being caught. If the manipulator knows full well that he is acting on behalf of his sponsor and that his sponsor will never prosecute him, the manipulator will audaciously act in bright light and open spaces for he no longer has anything to fear. As an example, if you desire to rob a bank but fear the police and potential jail time, you might rob the bank late at night or over a long weekend. If, however, you have the police and the judge in your back pocket, you could just walk in during business hours and make off with the loot.

I point out all of this because of the two charts below. I posted the one on the left back on Friday afternoon. That The Cartel would "trim" price by $7, at 2:20 pm, two days in a row was audacious enough. However, you must also check out the chart on the right. Another $7 at exactly 2:20 pm today. Sickening.

Again, only a criminal with no fear of prosecution acts this brazenly and predictably.

So, what do we make of this. As a practical matter, the suppression has worked. Without three, consecutive days of $7 Globex raids, gold would be trading at $1790 instead of $1769. Every dollar counts, whether it's taken out on the Comex, the LBMA or the Globex. However, on the bright side, how close must we be to a breakout? If The Cartel feels so threatened that they have to resort to bald-faced Globex manipulation, how desperate must they be and how worried are they about gold moving to $1800+? This is The Battle Royale, everyone. Be prepared for more dirty tricks but do not be afraid. We are winning and they know it.

Gold found support overnight where where I'd hoped it would, namely 1765 or so. Now the question becomes will it hold that area overnight tonight? It's hard to say. I wouldn't be surprised by a dip to 1750 and, if it does, I'll be looking to add some.

Amazingly, silver remains stronger than mustard gas. The area between 35.15 and 35.30 looks like pretty good support but a concerted raid could drive price all the way down toward 34.50. If that were to happen, I'd be an aggressive buyer. The only concern is the continued drop in 1-month lease rates, which appear to have fallen today to -0.46%, though I haven't seen anything "official" yet. Again, these plunging lease rates in silver are not a 100%-certain indicator of impending doom. They are just a warning flag. Additionally, while silver traded down 21 cents on Friday, open interest actually expanded by 2,300 contracts. More EE naked shorting in an attempt to keep silver below the Battle Royale level of 35.50- 36.00? I think so. Also, the March12 OI only fell by 1200 contracts on Friday and entered today at 20,160. This left today, Tuesday and Wednesday as the final three trading days where longs could be persuaded to dump March for May. Can't wait to see the numbers tomorrow!

Here are two charts of questionable value. On the left is a daily POSX but, as you know, my Forex TA ability is dubious, at best. On the right is a 2-hour crude. My TA in crude is a little better but, in a market that is primarily being driven by geo-political events, TA is almost useless. That said, if you're looking to join the crude "party", a dip toward $106 might be your opportunity.

Lastly, I traded a few emails today with Jim Quinn of The Burning Platform. I thought I'd blown a little time writing up my Saturday missive but it turns out the Jim took it even farther. He worked all day Saturday and most of Sunday on his latest post. Again, Jim does this out of passion and a genuine desire to make a difference. I encourage you to support his efforts by heading directly to his site to read his latest blog as soon as you are finished here.

https://www.theburningplatform.com/?p=29848

That's all for today. Keep an eye on things overnight and expect the usual 3:00 am London raid. Then, let's see what tomorrow brings ahead of the all-important, Wednesday LTRO expansion info. Keep the faith. TF

About the Author

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turd [at] tfmetalsreport [dot] com ()

  194 Comments

Punk-Assets
Feb 27, 2012 - 4:15pm

Hey, good news, sale starts

Hey, good news, sale starts daily at 14:20.

:o)

Be Prepared
Feb 27, 2012 - 4:17pm

Crazy World

always brings crazy results...

iceman321_2k2
Feb 27, 2012 - 4:18pm

LOL

Was Dr. G going to the bathroom?

Anyone else looking forward to the LTRO on Wednesday? :)

https://wallstcheatsheet.com/investing/will-another-round-of-ltro-send-gold-and-silver-higher.html/

"The first LTRO program ignited gold and silver to what stands to be a record breaking year for the precious metals. Although the S&P 500 has gained 8.8 percent year-to-date, gold prices have increased 13.3 percent. Even more remarkable, silver prices have surged nearly 27 percent. Gold and silver are both nearing strong resistance levels, but another round of back-door easing could easily push prices higher."

Perfidious Albion
Feb 27, 2012 - 4:26pm
Dr G
Feb 27, 2012 - 4:28pm

Was I going to the bathroom?

Was I going to the bathroom? LOL, no I was actually seeing patients.

Double Bogey
Feb 27, 2012 - 4:30pm

First

Dang, I thought I got lucky, but just a mirage. Flabbergasted at actually being first, I hit enter without putting in some content. Rookie mistake :)

After following some discussions on some forums last week, I traded 3 oz. gold for 150 oz of silver at a coin show Saturday. I was pleased.

Silver is showing some strength and resilience. I'm thinking tomorrow is the last day for a quick smackdown before BB speaks. Picked up a little DSLV earlier today for insurance. My May 20 VIX calls are looking healthy as well. Missed the small spike this morning, although is sure is easier to buy stuff than sell stuff.

"What are we to make, then, of blatant manipulation in broad daylight? The simplest answer, I believe, is that the manipulator has no fear of being caught." I think you hit the nail on the head. If the government was truly there to protect protect us, heads would have been rolling years ago. I don't know if the 'CONgress' is the pupeteer of the EE or vysa versa, but how does the small guy have a chance?

Thanks as always for the TA confirmation and the hand-holding that goes on here. I love this town.

TheSilverJournal.com
Feb 27, 2012 - 4:30pm

The Money Printer's #1 Concern is to Keep the Printing Press

The money printer's first and foremost concern is to keep control of the printing press. Everything else is secondary to them. Expect the upmost market manipulation as the intensity of the game progress. Raising margins to 100%, capital controls, and further mandating the manner which institutions invest their money (away from precious metals) should all be expected. Regardless, nothing government does will be able to stop the movement of wealth into PMs.

TheSilverJournal.com

paulindoon
Feb 27, 2012 - 4:37pm

Turd - I feel priviledged

Well done TF and my full hearty thnx for your accurate and spirit sustaining efforts.

To have an opportunity to (freely) visit this site and occasionally post, is a real privilege. If it wasn't for our Turd, I would feel rather lost in navigating thru the quagmire of misleading info that's out there for the unwary. But thnx to our captain, we are all offered glimpses of Turd's the navigational chart to allow each of us to steer our boat by.

And (at the risk of irating some sensitive boat people) I must say that as good as the charts are, I did lose all my precious in one of those oft reported boating mishap.

Okay, open season on this turkey so fire away!!!

But hey, it's been a slow day. Hopefully we get a Happy Tuesday tomorrow.

Silver2500
Feb 27, 2012 - 4:41pm

It's Official: S&P Cuts

It's Official: S&P Cuts Greece To (Selective) Default From CC

Submitted by Tyler Durden on 02/27/2012 16:29 -050


Translation: Greece better have that PSI in the bag or else the "Selective" goes away and "Greece would face an imminent outright payment default."

From S&P

Greece Ratings Lowered To 'SD’ (Selective Default)

Rating Action

On Feb. 27, 2012, Standard & Poor's Ratings Services lowered its 'CC' long-term and 'C' short-term sovereign credit ratings on the Hellenic Republic (Greece) to 'SD' (selective default).

Our recovery rating of '4' on Greece's foreign-currency issue ratings is unchanged. Our country transfer and convertibility (T&C) assessment for Greece, as for all other eurozone members, remains 'AAA'.

Rationale

We lowered our sovereign credit ratings on Greece to 'SD' following the Greek government's retroactive insertion of collective action clauses (CACs) in the documentation of certain series of its sovereign debt on Feb. 23, 2012. The effect of a CAC is to bind all bondholders of a particular series to amended bond payment terms in the event that a predefined quorum of creditors has agreed to do so. In our opinion, Greece's retroactive insertion of CACs materially changes the original terms of the affected debt and constitutes the launch of what we consider to be a distressed debt restructuring. Under our criteria, either condition is grounds for us to lower our sovereign credit rating on Greece to 'SD' and our ratings on the affected debt issues to 'D'.

As we have previously stated, we may view an issuer's unilateral change of the original terms and conditions of an obligation as a de facto restructuring and thus a default by Standard & Poor's published definition (see "Retroactive Application Of Collective Action Clauses Would Constitute A Selective Default By Greece," Feb. 10, 2012, and "Rating Implications Of Exchange Offers And Similar Restructurings, Update," May 12, 2009). Under our criteria, the definition of restructuring includes exchange offers featuring the issuance of new debt with less-favorable terms than those of the original issue without what we view to be adequate offsetting compensation. Such less-favorable terms could include a reduced principal amount, extended maturities, a lower coupon, different payment currency, different legal characteristics that affect debt service, or effective subordination.

We do not generally view CACs (to the extent that they are included in an original issuance) as changing a government's incentive to pay its obligations in full and on time. However, we believe that the retroactive insertion of CACs will diminish bondholders' bargaining power in an upcoming debt exchange. Indeed, Greece launched such an exchange offer on Feb. 24, 2012.

If the exchange is consummated (which we understand is scheduled to occur on or about March 12, 2012), we will likely consider the selective default to be cured and raise the sovereign credit rating on Greece to the 'CCC' category, reflecting our forward-looking assessment of Greece's creditworthiness. In this context, any potential upgrade to the 'CCC' category rating would inter alia reflect our view of Greece's uncertain economic growth prospects and still large government debt, even after the debt restructuring is concluded.

If a sufficient number of bondholders do not accept the exchange offer, we believe that Greece would face an imminent outright payment default. This is because of its lack of access to market funding and the likely unavailability of additional official financing. The revised financial assistance program provided by most of the eurozone governments and the Stand-By Credit Arrangement with the International Monetary Fund are predicated on a successful exchange offer.

Our T&C assessment for Greece, as for all other eurozone members, is 'AAA'. A T&C assessment reflects our view of the likelihood of a sovereign restricting nonsovereign access to foreign exchange needed to satisfy the nonsovereign's debt-service obligations. Our T&C assessment for Greece expresses our view of the low likelihood of the European Central Bank restricting nonsovereign access to foreign currency needed for debt servicing.

If Greece were to withdraw from eurozone membership (which is not our base-case assumption) and introduce a new local currency, we would reevaluate our T&C assessment on Greece to reflect our view of the likelihood of the Greek sovereign and its central bank restricting nonsovereign access to foreign exchange needed for debt service. Contrary to the current case, in this scenario, the euro would be a foreign currency, and the Bank of Greece would no longer be part of the European System of Central Banks. As a result, under our criteria, the T&C assessment can be at most three notches above the foreign-currency sovereign credit rating.

https://www.zerohedge.com/news/its-official-sp-cuts-greece-selective-def...

Frankenstein Government
Feb 27, 2012 - 4:42pm

Good Work TF

Thanks as always. I never cease to be amazed by these pricks. Really.

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Key Economic Events Week of 11/18

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11/20 2:00 ET October FOMC minutes
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11/21 10:00 ET Existing Home Sales
11/22 9:45 ET Markit November Flash PMIs

Key Economic Events Week of 11/11

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Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
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10/11 10:00 ET Consumer Sentiment

Key Economic Events Week of 9/30

9/30 9:45 ET Chicago PMI
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