Gold and Silver Looking To Bottom Soon

Mon, Mar 19, 2012 - 10:02am

The Turd is back in the saddle and ready for another crazy week.

Whew, did I ever have fun in Friday! Got home Saturday in no shape to post a single thing then decided to simply take the day off yesterday. Let's see...what has happened in my absence?

  1. We have to start with the exclusion of Iran from the SWIFT system that began on Saturday. Megalomaniacal leaders full of brim and bluster like to spout "this is an act of war" all of the time (think Kim Jong-Il). This exclusion from SWIFT truly is. If there was going to be an "economic sanction" that was going to work, this would be it. Unfortunately, this isn't going to work and it will only serve to speed-up-the-lead-up to war.
  2. What the heck is this? CALawyer, if you have a few moments, could you please put this into English for us? I have a feeling I'm not going to like what you report, however.
  3. That cute little vixen, Meredith Whitney, is making waves again. There is absolutely no question in my mind that she is 100% correct. This looming municipal funding disaster is all part of the "QE to Infinity" equation.
  4. Our pal Jim Quinn has penned another outstanding missive that you should take the time to read. He even concludes it with our favorite two-word sentence.
  5. And while most everyone was either drinking green beer or watching basketball (or both) on Saturday, ZeroHedge snuck in this little beauty. Reposted here just in case you missed it.

So, where does this all leave our precious precious metals. Very close to a bottom I believe. Remember, our new pal "Winston" told us back on Thursday that spot/physical demand is such that we should see a bottom in paper price by early this week. The charts, the lease rates and the OI numbers are starting to bear this out. Let's start with lease rates. I didn't print off a picture to post but you can see them for yourself by clicking this link: . Note that both gold and silver lease rates have turned up rather dramatically and that this usually happens right before or during paper price bottoms.

Next, the OI and CoT numbers. By now, you've probably all seen the latest CoT numbers from Friday. They were kind of a yawner with no significant change. The OI numbers since last Tuesday's cutoff are interesting, though. Back on Wednesday, when gold was off $51 and silver was down $1.40, total OI in both metals fell to levels not seen since 2/17/12 when prices were $1726 and $33.29. This means "Mission Accomplished" for The Cartels. Back on Feb 17, prices had been stuck in a tight range for nearly three weeks as The Cartels were busily supplying paper metal, attempting to cap price. Prices then broke out the next trading day, following the 3-day weekend, and were allowed to rise rather dramatically over the next week and suck in all of the new spec longs that have now been officially fleeced. That we have now completed a "round trip" in both price and OI shows that a bottom is near, too.

How about the charts? Well, silver is showing the first signs of a bottom. Gold, not yet. Let's see how things unfold over the next 24-72 hours before jumping to any conclusions.

So, in the end, we are close...and getting a bottom for this "manufactured correction". The Turd, having survived 24 hours of debauchery, is back at his post, observing things with a keen (if slightly blurry) eye. Soon, we will likely be able to sound the all clear. Your Watchman will keep you posted.


About the Author

turd [at] tfmetalsreport [dot] com ()


Mar 19, 2012 - 10:06am


How low will it go?

Mar 19, 2012 - 10:07am

1st maybe


Hope the NCAA Tourny was a blast Turd!

Eric Original
Mar 19, 2012 - 10:07am

Nice move out of Wesdome

Nice move out of Wesdome today, up 9%.

EDIT: Second! Otherwise known as "First Loser" LOL

Mar 19, 2012 - 10:08am

Not even second...

I was Thurd!

Mar 19, 2012 - 10:20am

Silver Bottom?

Thanks Turd, Silver should be ready to bottom soon since I bought last week! usually takes a dive after I buy.

Mar 19, 2012 - 10:27am

Bottom in Price?

Geesh. Let's hope not. Why do we want the price to bottom now?

Mar 19, 2012 - 10:28am

Hate the wait

This bottom is taking forever. I can't wait to get in some AGQ. Hurry up

Mar 19, 2012 - 10:30am

Information overload

I'm imagining I'm not the only one feeling conflicted here by diverging opinions on gold and silver.

Turd is anticipating a bottoming soon, along with his friend Winston. They have plenty of company.

Meanwhile, some continue to call for the long-awaited, oft-delayed rocket launches in both metals.

But Dan Norcini on KWN over the weekend says the charts look heavy.

Uncommon Wisdom Larry --posting from his hospital room, no less -- is thinking gold to 1580-ish and down, silver to 30 and maybe 25.

And so it goes. A lot of seers with large followings are anticipating widely varying near-term action based on their charts and/or in other market indicators.

What's a guy to do? Probably just sit tight and see what happens. Don't over-commit. Stay nimble.

Mar 19, 2012 - 10:30am

Filling this space . . .

Yeah, I don't have anything useful or valuable to contribute, so I'll just fill this space with numbers!

First, Second, Third, Fourth, Fifth, wait! A fifth? Of what? Mmmmm.

Oh, well. Sixth, Seventh, Eighth, Ninth, Tenth, Eleventh -- Aren't we getting somewhere fast?

Wow. We're really perking! Twelveth? Wait. How to spell that? Twelfth? That looks better.

Skip the next number because it's supposed to be unlucky.

Fourteenth, and I'm done for the day!

Mar 19, 2012 - 10:32am
Mar 19, 2012 - 10:33am

Swami of the Shiny...

Thanks for that update.

SWIFT upped it to a whole other level. The big squeeze is on.

How long can Iran withstand the effects?


Iran threatens Hormuz and world oil supply after trade links cutoff

Former Intelligence Minister Ali Falahian, Iran’s senior spokesman on sanctions, said Sunday, March 18, that if the US and Europe think they can ignore international law to promote their interests, they should know that Iran will respond in kind everywhere it can. “I suggest that the West take seriously our threat to close the Strait of Hormuz,” he said in Tehran’s first response to the SWIFT decision to sever ties with Iranian banks to enforce European sanctions on its nuclear program.
A large fleet of 4 US and French nuclear aircraft carriers and a dozen or more minesweepers and mine-hunting helicopters have piled up on both sides of the Strait of Hormuz, through which 17 percent of the world’s daily oil supply passes, and Israeli naval vessels have deployed in the Red Sea.

Mar 19, 2012 - 10:36am

on and off topic

Provident told me they got stiffed on a delivery of 1/2 oz Ag rounds. A three week delay so far. Anybody else with similar experience?

And my cat got featured on Yves' Scroll down

Mar 19, 2012 - 10:36am

@Stratajema - Call me

@Stratajema - Call me Icelandic. IMHO, the sooner gold and silver are properly valued, the sooner we can get back on a sound and moral financial system. I say, "If we're going to have a bloodbath, let's get it over with."

Really, why should we just keep playing these games and make the final crash that much worse. Smarter people than me have said that the longer we put off the inevitable, the worse the endgame. I wouldn't mind losing one last opportunity to stack more if it means less of a shock to the nation (and the world) when the collapse happens. Ain't I altruitic?

What's your game? Oh, yeah...that date for $1400? Or at least a reason you won't put a date on it?

Be Prepared
Mar 19, 2012 - 10:37am

Gold Weekly Outlook - March 19th

Gold Weekly Technical Outlook

Comex Gold (GC)

Gold's decline resumed after recovery was limited by falling 4 hours 55 EMA and reached as low as 1634.7. Further fall should be seen in near term to 100% projection of 1792.7 to 1663.4 from 1717.4 at 1588.1 Also, note that rise from 1523.9 has likely completed at 1792.7 already, ahead of 1804.4 key resistance. Break of 1588.1 will target 1500 psychological level. On the upside, above 1717.4 is needed to indicate completion of fall from 179.27. Otherwise, we'll stay bearish even in case of recovery.

In the bigger picture, price actions form 1923.7 high are viewed as a medium term consolidation pattern. The failure to break 1804.4 and subsequent sharp fall argues that such consolidation pattern is not finished yet and gold might have just started another falling leg. Nonetheless, we're still expecting strong support from 1478.3/1577.4 support zone to contain downside to finish the consolidation and bring up trend resumption to another high above 1923.7 eventually.

In the long term picture, with 1478.3 support intact, there is no change in the long term bullish outlook in gold. While some more medium term consolidation cannot be ruled out, we'd anticipate an eventual break of 2000 psychological level in the long run

Comex Gold Continuous Contract 4 Hours Chart

Comex Gold Continuous Contract Daily Chart

Comex Gold Continuous Contract Weekly Chart

Comex Gold Continuous Contract Monthly Chart

Mar 19, 2012 - 10:39am

@firstsilver - you're not

@firstsilver - you're not alone. But if you believe in the long term trend, then dollar cost average into more PMs and tune the rest out. THAT IS ALL YOU CAN DO since there will always be conflicting views, even among "good" men. Personally, I'm confused a bit as well, but short-term thinking does that. And, really, I'm done stacking since I need to keep my dry powder for the simple things in life - food, clothing, shelter.

Mar 19, 2012 - 10:41am

Hypester warning

Look out for references to, in this case the item about Meredith Whitney.

Moneynews is a part of the Agora/Bill Bonner hypester network and although the items appearing

there are often legitimate there is also an awful lot of "rope-em-and-dope-em" pump-and-dump

newletterism. In this case the Whitney info appears at least neutral but note that there is also

a prominent "Editors Note" in two locations:

Wall Street Whistleblower Warns of Meltdown, See His Uncensored Interview

which leads you to one of those stupid promotional videos that you can't turn off. Also, the site won't let you out as easily as you might like. You know, I don't fault Turd for wanting to present this story as simply as possible but just beware of this site as it tries to highjack your concern for your own well-being. Read it and extract whatever useful information you can but be careful.
Mar 19, 2012 - 10:41am
Air Garcia
Mar 19, 2012 - 10:44am

Ed Dames On C2C

Major Ed Dames was on C2C the other night - I wish George would get into deeper stuff - and skip all the friendly bs chatter, but that's just me.

Besides saying Armegeddon is coming, we're all going to be burned faceless by the sun and there is no hope until the aliens come and get us out of our own mess, he did say that silver is the best investment going. Better than Gold.

So - take it for what it's worth - and hopefully it will be worth more sooner rather than later!

-Jerry G.

Timber Tim
Mar 19, 2012 - 10:47am

Executive Order -- National Defense Resources Preparedness

Turd that looks like nationalization to me of everything,if and when needed.Your going to need silver to make bombs.

Mar 19, 2012 - 10:49am


Well for the fifth or sixth day in a row (I think) we're having a COMEX smile. A push down to the London PM fix followed by a morning rally in the PM prices. this a reliable FULBMA or just another bunch of margin suckers getting roped in for the next slam. Either way, it's getting very dull again, but I'm sure some traders are making some dough. Good Luck to 'em, but I won't play in a sand box that's full of rattlers. You're braver them I am, all you speculators.

Mar 19, 2012 - 10:51am


Mr. T.F.: We always like an event to take place so we can justify pulling the trigger. Therefore here is the NW VIEW news flash: The evil Iranian government has placed thousands of underwater mine fields in the Hormuz Strait. An unidentified oil tanker carrying two million barrels of crude oil hit two mines and sank, spilling the entire load in the strait. The impact will be felt for years. The U>S> government has launched forty cruise missiles and have destroyed the Iranian fleet.

Mar 19, 2012 - 10:53am

SWIFTed Iran

You people have been a very bad influence on me. You actually have me believing that this action in the SWIFT system is someone trying to GET IRAN to start a war with us. Of course, a 3rd aircraft carrier showing up arounf there is just a coincidence.

I need a new set of friends.

Mar 19, 2012 - 10:54am

US DollarVulnerable to DeeperLosses,S&P 500 at Risk of Reversal

S&P 500 – Prices are facing resistance at 1408.90 at the confluence of the 38.2% Fibonacci expansion and the top of a Rising Wedge chart formation. Negative RSI divergence hints a move lower is ahead. Initial support lines up at 1382.90, the 23.6% Fib, and is reinforced by the Wedge “midline”.

8hr Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL – Prices followed a Hammer candlestick with a break through the top of a Rising Wedge chart formation identified last week. The bulls are now testing above initial resistance at 107.35, the 23.6% Fibonacci expansion, with a close above this barrier exposing the 38.2% Fib at 109.56. The Wedge top, now at 106.43, has been recast as near-term support.

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD – Prices appear to be carving out a Falling Wedge bullish reversal chart formation, with a Harami candlestick pattern above support at 1638.84 reinforcing the likelihood of a bounce. Initial resistance lines up in the 1666.37-1677.05 area, with a break above that validating the Wedge setup and exposing resistance barriers at the 1700/oz figure as well as 1718.05.

Daily Chart - Created Using FXCM Marketscope 2.0

US DOLLAR – As we suspected, prices followed a bearish Dark Cloud Cover candlestick pattern with a move lower, taking out support at 9995 marked by the 50% Fibonacci expansion. From here, sellers aim to challenge the 38.2% Fib at 9919, a barrier reinforced by a falling trend line set from mid-December and now recast as support. The 50% expansion now marked the first layer of resistance.

Daily Chart - Created Using FXCM Marketscope 2.0

--- Written by Ilya Spivak, Currency Strategist for

Mar 19, 2012 - 10:57am


FOREX: Dollar Outlook Hinges on Fed Comments as Oil Threatens Recovery

The US Dollar (ticker: USDollar) put in for a quiet start to the week, trading little-changed against its major counterparts. The New Zealand Dollar narrowly outperformed after February’s Performance of Services Index rose to 55.5, showing the non-manufacturing sector grew at the fastest pace in three months.

A quiet European data docket is likely to see traders focus their attention on comments from New York Federal Reserve President Bill Dudley. US economic growth has overtaken the spotlight as traders base their outlook for global output on the ability of the recovery in North America to offset a recession in the Eurozone.

As of last Friday, headwinds from rising oil prices have become the central item of consideration. US CPI produced the largest monthly gain in 10 months on the back of higher energy costs. Meanwhile, consumer confidence unexpectedly fell and industrial production stalled. Both outcomes likely owed to more expensive oil at least to some extent as crude’s ascent bleeds into the cost of gasoline and industrial petrochemicals.

Reasonably enough, fears that an oil spike will snuff out the US recovery again (as happened in late 2010 – early 2011) have probably begun to multiply anew. With that in mind, Dudley’s comments will be closely monitored as markets look to get a sense of how energy-price developments are factoring into the Fed’s policy calculus.

With this in mind, a variety of outcomes presents itself. A relatively dovish tone that rekindles hopes of stimulus should the recovery begin to falter is likely to send the US Dollar lower, with stocks-linked currencieslike the Australian, Canadian and New Zealand Dollars and the Japanese Yen (where correlations with Treasury yields remain important) outperforming. Alternatively, a neutral outcome echoing the FOMC statement that acknowledges the run-up in oil prices but doesn’t hint at policymakers’ readiness to provide near-term support is likely to support the greenback.

Asia Session: What Happened









China Property Prices Survey (FEB)






Westpac NZ Consumer Confidence (1Q)






Performance of Services Index (FEB)



53.8 (R+)

Euro Session: What to Expect









Euro-Zone Current Account s.a. (€) (JAN)






Italian Industrial Orders (MoM) (JAN)






Italian Industrial Orders (YoY) (JAN)






Italian Industrial Sales (YoY) (JAN)






Italian Industrial Sales (MoM) (JAN)






Euro-Zone Current Account n.s.a. (€) (JAN)






Euro-Zone Construction Output (YoY) (JAN)






Euro-Zone Construction Output (MoM) (JAN)






NY Fed Pres Dudley Speaks on Long Island




Critical Levels










--- Written by Ilya Spivak, Currency Strategist for

Mar 19, 2012 - 10:58am

crude looking solid

and poised to move higher. I've seen the many requests for some crude charts. I'll include some in my next post, later this afternoon.

TPaine Timber Tim
Mar 19, 2012 - 10:58am

Executive Order and claim this is not a big deal, that there's been a EO like this in place for decades and all that's changed is some language to reflect new dep't names and whatnot.

Mar 19, 2012 - 10:59am

Turd's bottom

looks like somebody read this thread and decided to place an order!

Mar 19, 2012 - 11:00am

Metals to Rise

Metals to Rise if Fed Reopens Door to QE3 as Oil Threatens Recovery

Spot Gold (NY Close): $1660.00 // +1.57 // +0.09%

Prices appear to be carving out a Falling Wedge bullish reversal chart formation, with a Harami candlestick pattern above support at 1638.84 reinforcing the likelihood of a bounce. Initial resistance lines up in the 1666.37-1677.05 area, with a break above that validating the Wedge setup and exposing resistance barriers at the 1700/oz figure as well as 1718.05.

Daily Chart - Created Using FXCM Marketscope 2.0

Spot Silver (NY Close): $32.53 // +0.43 // +0.13%

Prices are stalling after completing a Head and Shoulders top chart pattern with a break below the formation’s neckline at 32.97, the 38.2% Fibonacci retracement level. Initial support remains at 31.67, the 50% Fib, with a break lower exposing the 61.8% retracement at 30.37. The H&S setup implies a measured downside objective at 26.84, which closely coincides with the late December bottom. The 38.2% level has been recast as near-term resistance.

Daily Chart - Created Using FXCM Marketscope

Written by Ilya Spivak, Currency Strategist for

Eric Original
Mar 19, 2012 - 11:03am


LOL! Gave up all it's gains. That's the frickin junior miners for ya. Rollercoaster every day.

Mar 19, 2012 - 11:06am


Silver set to shine after escaping India's budget clutches


Silver, the poor man's gold, has turned out to be the winner in India's budgetary excise duty cuts by escaping the attention of the Finance Minister. Investors in India are keen to push silver above the recent channel high with traders insisting that it will be more than speculation that will drive demand for the white metal.

"Silver has clearly been exempted for a reason,'' said Prithviraj Kothari, president of the Bombay Bullion Association. ``Out of $50 billion worth of imports of precious metals into India, silver imports were just $4 billion, while that for gold was the other $46 billion,'' he said.

On Friday, India's Finance Minister exempted branded silver jewellery from excise duty. Silver coins of purity 99.9% and above were also exempted from excise duty. However, the excise duty on refined gold was doubled from 1.5% to 3%.


This will be interesting. In 2011, the US Mint sold just about the same in GOLD EAGLES as it did in SILVER EAGLES in dollar amount. Here we can see that India has been buying GOLD over SILVER in their currency at a ratio of 12.5 to 1. With this new IMPORT DUTY on GOLD which was not placed on silver, the Indians will be buying silver with both HANDS.

Australia finally imposes 30% mining tax

CANBERRA (Reuters) -

Australia's parliament passed laws for a new 30 percent tax on iron ore and coal mine profits on Monday after a bruising two-year battle with mining companies, in a major victory for Prime Minister Julia Gillard and her struggling minority government.

The tax will affect about 30 companies, including global miners BHP Billiton, Rio Tinto and Xstrata, and aims to raise about A$10.6 billion ($11.2 billion) in its first three years.


And we thought that INCREASED ROYALITIES-TAXES and NATIONALIZATION was just for third world countries.

Indian jewellers protest duty hike, down shutters

Along with the immediate increase in gold prices, jewellers in India are expecting a 30% dent in demand at bigger establishments saying consumers will opt to buy gold from smaller stores without receipts to evade taxes.

Author: Shivom Seth
Posted: Monday , 19 Mar 2012

Jewellers in Mumbai and other parts of India are on a three day strike to protest the Indian government's hike in excise, customs duties and a consumer tax on gold imports. Even as traders and analysts allude to the sops given by the Chinese government to promote investment in gold through various means, they noted that the Indian government's discouraging tactics to tackle its balance of payment crisis could well backfire and lead to a massive revenue loss.


Here we can see the Indians also know how to use LOOP HOLES to get around their own governments laws.


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Key Economic Events Week of 3/18

3/19 10:00 ET Factory Orders (Jan)
3/20 2:00 ET FOMC Fedlines
3/20 2:30 ET CGP presser
3/21 8:30 ET Philly Fed
3/22 9:45 ET Markit PMIs
3/22 10:00 ET Existing Home Sales
3/22 10:00 ET Wholesale Inventories (Jan)

Key Economic Events Week of 3/11

3/11 8:30 ET Retail Sales (Jan)
3/11 10:00 ET Business Inventories (Dec)
3/12 8:30 ET CPI (Feb)
3/13 8:30 ET Durable Goods (Jan)
3/13 8:30 ET PPI (Feb)
3/14 8:30 ET Import Prices (Feb)
3/14 10:00 ET New Home Sales (Jan)
3/15 8:30 ET Empire State Manu Index
3/15 9:15 ET Cap. Util. & Ind. Prod.

Key Economic Events Week of 3/4

3/5 9:45 ET Markit and ISM services PMIs
3/5 10:00 ET New home sales (Dec)
3/6 8:30 ET Trade Balance (Dec)
3/7 8:30 ET Productivity and Unit Labor Costs
3/8 8:30 ET BLSBS
3/8 8:30 ET Housing starts (Jan)