Saturday Gold and Silver Summary

228
107
Sat, Mar 24, 2012 - 12:31pm

I've found a couple of things for your weekend, so I thought it best to start this new thread. Mainly, I had to make sure that everyone saw the latest OI numbers and CoT report.

First of all, you don't have to wait for me. If you want to get this info for yourself, just save these links to your "favorites". The daily OI numbers are usually released by about 2:30 p.m. EDT and the CoTs come out every Friday at around 3:00 p.m. EDT.

https://www.cmegroup.com/trading/metals/precious/gold_quotes_settlements_futures.html

https://news.goldseek.com/COT/1332531154.php

Both the OI numbers from yesterday and the CoT were exactly what I was hoping for. I posted comments with analysis into the previous thread but I wanted to ensure that as many of you saw it as possible, so I am copy-and-pasting both comments below. It is important to keep in mind the limitations of these reports. They are not necessarily forward-looking in that both are already dated by the time they are released. Therefore, they should be treated more like "forensic evidence" of current and past Cartel activity. For example, it is very difficult to use CoT data exclusively to identify potential tops as the capacity to absorb spec longs is nearly unlimited. The Cartels could go to 4:1 net short or 5:1 net short on the backs of Fed-supplied cash and the established practice of fractional bullion banking. That said for 2012 we will, however, use the net short ratios of late February as benchmarks for possible Cartel limitations. As for calling bottoms, the data is more helpful. Bottoms form over a much longer time period than tops and price declines tend to bottom in the general area where Cartel net short ratios reached 2:1.

_____________________________________________________________________________

Submitted by Turd Ferguson on March 23, 2012 - 2:39pm
Perfect, 100%-predictable OI moves yesterday.
Recall that I began feeling yesterday that the decline we saw yesterday morning was "it", the final low, at least for gold. Gold rallied in the late morning yesterday and closed the Comex down $7.70. I expected the OI to decline marginally as this has been the trend in this "correction". The numbers are in and the OI did decline marginally, falling back under 432,000 and a near double-bottom in OI with Tuesday's number, which coincides with a near double-bottom in price. With the rally today that continues this afternoon, chances are very high that I will be proven correct in this latest "Turd's Bottom" for gold.
Silver also acted as expected yesterday. Recall that, on Tuesday, silver declined $1.12 but total OI surged by over 3,000 contracts. I surmised at the time this was indicative of spec shorts being added at the bottom...shorts that will soon be fleeced by the EE with a sharp move to the upside. I was curious to see if OI rose again yesterday because, as you know, silver declined by $0.88 yesterday on the Comex session. Well, whaddayaknow? Total OI rose by 1,400 contracts yesterday during the near $1 selloff. I have deep faith that this was the final suck-in of extra spec shorts before the bottom, just like 2/28 was the final suck-in of the spec longs before the beatdown. For further evidence, as of yesterday the total silver OI is now 5,500 contracts higher than it was on 3/15/12 yet price is $1.38 lower.
Once again, this helps to complete the bottom picture. Spec longs have been wrung out of gold as total OI has now "double-bottomed" below 431,000...an OI level we last saw on Valentine's Day when price was $1718. Spec longs have been driven out of silver, too, and importantly, fresh spec shorts have now been driven in as total silver is already 5,500 contracts off of its "correction lows".

Submitted by Turd Ferguson on March 23, 2012 - 3:21pm.
WOW WOW WOW!!! I LOVE THE CoT REPORT!!!
GOLD
Exactly what I was hoping for! The large specs longs shed 15,468 or another 6% while large spec shorts grew by 3,975 or, roughly 11%. Beautiful! Even the small specs got in on the action by punting 4,500 longs while adding 1,600 shorts. The all-important Cartel did exactly what I'd hoped---They added 15,424 long (10%) while covering 10,126 (3%) shorts. This means the net short position of The Gold Bullion Banking Cartel shrunk by over 25,000 contracts during the week where price fell nearly $50! The net short ratio is now almost exactly 2:1, down from the 2.7:1 that it reached on 2/28 and is actually a shade lower than where it was on 12/27 when price was $1598. A very, very bullish picture!
SILVER
Like gold, almost perfect! First of all, remember that total OI barely budged over the 3/13-3/20 reporting period, only falling by about 300 contracts while price fell by nearly $2. Ideally, in this situation the large spec longs would be resolute while, at the same time, the EE shrunk their net short position. Additionally, I had hoped that the bulk of the downside price pressure had come from new large and small spec shorts. THIS IS EXACTLY WHAT HAPPENED! ​While price fell $2, large spec longs actually added 30 contracts. This is what we mean when we say that "silver is in strong hands"! Another good sign is that large spec shorts surged by 17% and small spec longs punted almost 9%. Perfect!! Then...the all-important Evil Empire. The Forces of Darkness added 2,281 longs (+6.45%) while covering 1,224 shorts (1.7%). This is a net change in the overall short position of 3,500 contracts (-9.84%) and brings the net short ratio down to 1.85:1. Again, for reference, the EE net short ratio on 2/28 was 2.32:1 and, on 12/27/11 it was a scant 1.34:1. From a purely CoT perspective, you might conclude that silver still has a little ways to go before reaching the extraordinarily bullish levels of late December. However, you must keep in mind that silver is still $3 higher in price than it was back then, too. Therefore, these silver CoT numbers are perfectly acceptable to those (like me) who are searching for a bottom in the here and now.
In conclusion, I am very, very excited for next week and the weeks ahead. Combining the CoTs with the current OI, then adding in the recent backwardation and and the looks of the charts and other technicals and you get a picture that looks, smells and feels like a significant bottom and "markets" that are poised to rebound very soon.

_____________________________________________________________________________

Next up are two, very interesting weekly charts. As we search for a bottom, note first that gold actually had an UP week last week. Sure didn't feel like it, though. Also, notice that silver has had 4 straight DOWN weeks. While I admit that my eyesight is experiencing some middle-age "issues", I challenge everyone to inspect the weekly silver chart and find a period over the last 5 years where silver has experienced 5, consecutive DOWN weeks. Personally, I don't see one. This makes it seem like history is on our side next week.

Lastly, my friend "Big Red" from Virginia sent me this link earlier this week and I thought I would post it here to begin a discussion. Though, for me, the author lays a bit too much blame at the feet of the O'bottom Regime, he nonetheless does a fine job of detailing the precariousness by which freedom currently hangs. He also correctly identifies the problem as being ultimately caused by all politicians, of both parties. Other than that, it's just some light and happy, weekend reading. <sarc>

OUR COLD CIVIL WAR
By Benjamin Smith
On the heels of NDAA, ObamaCare, Stimulus, Son of Stimulus, Patriot Act, takeover of auto, energy, media and movie industries, and the relentless implementation of Agenda 21... the Obama regime running our country into the ground has issued an updated Executive Order which suggests the probability of impending MARTIAL LAW.
We are left to scratch our heads and ask……… Why now?
The only possible answer is…
America is in fact, right now, in the vicious throes of a Cold Civil War.
Cold as in non-violent and Civil as in nationwide; an attempt to force a new government-controlled ideology upon an unwilling public
.... Read more: https://www.theospark.net/2012/03/our-cold-civil-war.html

That's all for this week. Let's hope and prepare for a turnaround next week, particularly once gold option expiry is behind us. See you Monday. TF

About the Author

Founder
turd [at] tfmetalsreport [dot] com ()

  228 Comments

Animal Sacrifice
Mar 24, 2012 - 12:45pm

First

1st

ACM
Mar 24, 2012 - 12:53pm

I Agree With TF

GW paved the way for Obongo. I feel we have had the two worst Presidents in US history back to back.

I am also of the opinion that looting on a grand scale by the TBTF got under way with HW and has been the hallmark of these four in a row Ivy League sh..head Presidents.

slacker
Mar 24, 2012 - 12:53pm

a turnaround next week

Devo - Turn Around

TURN AROUND by DEVO

Kouen
Mar 24, 2012 - 1:07pm

expecting to see firework

expecting to see firework from here : )

ChicksDigIt
Mar 24, 2012 - 1:07pm

COT's look good...tungsten filled gold does not

Thanks for the COT update Turd! Lets hope you're right and the bottom's in for silver!

Just saw this report that tungsten filled gold bars have been discovered in the UK!
https://silverdoctors.blogspot.com/2012/03/tungsten-filled-1-kilo-gold-b...

This is really big news, and I would think this would have bullish implications for the silver/gold ratio.

El Gordo
Mar 24, 2012 - 1:43pm

Ever wonder about stupid people

Here's a study concerning stupid people. I'm certain that there is some relevance to current events in there somewhere.

https://cantrip.org/stupidity.html

iceman321_2k2
Mar 24, 2012 - 1:45pm

Nice Summary

https://wallstcheatsheet.com/investing/randgold-highlights-mining-risk-as-turkey-seeks-gold-bullion.html/

However, some governments are trying to change these benefits as an act of financial desperation. Government officials in Turkey will soon launch an incentive plan for consumers to store their bullion inside the country’s banking system. The WSJ reports, “The push to tap into the individual gold reserve-the traditional form of savings here- is part of Ankara’s efforts to reduce a finance gap that is currently about 10 percent of gross domestic product.” The Istanbul Gold Refinery estimates that 5,000 tons of gold may be stored outside of the banking system in Turkey.

Does anyone think other banks, such as in the U.S. could offer interest for gold deposits to lure in customers?

cavalier
Mar 24, 2012 - 1:56pm

GOLD rule of law risk; EXK

GOLD saw the rule of law risk when rebels took over parts of the country. GOLD continued business but the change of government is a big risk. The charts don't predict such an event. EXK on the other hand is in friendly Mexico, where it is easier and faster to produce silver than in the US. HL was in my opinion required to shut down its not so lucky mine for longer than it should by the regulators. So on Monday I'm looking to pick up some EXK.

slacker iceman321_2k2
Mar 24, 2012 - 1:58pm

Gold really is money around the world...

This bugged out, retired expat living in Chiang Mai, Thailand sees gold shops in every town here...

Thai gold is 23K.

People buy and hold it like "money in the bank" for those living in the fiat bubble of unreality...

https://tastythailand.com/why-do-thais-buy-so-much-gold-and-what-do-they...

Punk-Assets
Mar 24, 2012 - 2:09pm

Very scary on the gold bars.

Very scary on the gold bars. I'll be getting rid of the last bit of bullion I have and going back to $20 liberties and $20 St Gaudens in XF/AU. Thats enough to shake me out of bullion right there.

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