Well, nuts. I sat here yesterday and kept looking at that gold chart and thinking (hoping?) that maybe, just maybe, the worst was behind us. Once again, it looks like I spoke too soon and should have, instead, stuck with my ideas from last week.
Patience, Turd. Patience. The Cartels have acted ruthlessly but they never attack just once. You know this and I know this. This was evident and I was on the right track last Thursday when I posted these:
Since Thursday, The Cartel has increased their "body count" and is clearly intent upon inflicting more damage. This won't go on forever, though, so we must be prepared for when price turns. What are we likely to see?
- A further drop in open interest, back to the levels of 3-4 weeks ago. This would be somewhere around 105,000 in silver, 435,000 in gold.
- Significant changes in the net short position of The Cartels on this week's CoT.
- Reverse head-and-shoulder formations on the daily charts.
- A reversal of 1-month silver lease rates and a move back toward 0%.
Speaking of lease rates, can we cut the crap now about how they mean nothing? Since I first pointed out the "warning flag for silver" a couple of weeks back, (https://www.tfmetalsreport.com/blog/3375/warning-flag-silver) there has been all sorts of discussion regarding whether or not changes in 1-month rates matter. I really don't care what other "experts" think. All I know is what I see with my own two eyes and this "event" now makes 3 trips in a row into sharply negative territory that has preceded sharp drops in silver price. Rates have now reversed and are headed back higher. This is good news but don't get carried away. Notice that price bottoms have followed rate bottoms by about 5-7 days. This would seem to indicate that silver could decline further before bottoming.
So, where are we going? I'm going to stand by and stick with my original ideas now. Gold could be headed as low as 1600 but will likely stem its decline somewhere between 1600 and 1650. Silver looks to fall all the way to 31 but a sharp stab at 30 is not out of the question.
Look, I know that this is a drag. I hate it, too. But, we can't complain that the warning signs weren't there. The falling silver lease rates and the surging Cartel net short positions being chief among them. At this point, all you can do is let The Cartel finish its business and wait. Don't believe the doom and gloom and don't fall prey to your own depression. Silver and gold are your only protection against the financial calamity and global systemic collapse and restructuring that is coming. Use this and all dips in price to accumulate more physical metal. Take delivery and store it in a safe place. Do not let your heart be troubled by the unfair games of The Comex.