Mid-Week Gold & Silver Charts

Wed, May 2, 2012 - 5:48pm

As we barrel toward another fun-filled BLSBS Friday, I thought it was time to contemplate where we've been, where we are and where we're going.

Perhaps you've noticed a clear pattern this week of price suppression.

  1. The obvious manipulative event of Monday where JPM dumped 7500 contracts onto the Comex. This blatant and overt attempt to drive price lower was later written off as a trading error. "Oops. I fat-fingered and entered 7500 instead of 750. My bad." This trimmed $15 from gold just as it was threatening a move to 1680 and, more importantly, made a Comex close over $1672 extremely unlikely. Why was $1672 so important? It would have turned the month of April green on the chart and helped further set the stage for a rally in May.
  2. The less obvious but equally painful hammering of yesterday. After gold had rallied back from Monday's BS and was threatening, once again, to make a run at 1680, gold was struck for another $15 after the first release of a semi-positive economic number in weeks. Gold then struggled all day while stocks and crude oil surged.
  3. Today, gold rallied after the ADP employment survey came in weaker than expected. ADP is often considered somewhat of a precursor for the BLSBS and gold surged back over $1660. What happened next? To the surprise of no one, gold promptly fell another $15.

Does anyone see a pattern here?

But, of course, it is what it is. If you're going to trade/stack gold and silver, you're likely used to this by now. The primary question is: Why? Why three, successive manipulation days on the Monday-Wednesday ahead of BLSBS day? To engineer a lower price ahead of the number? I'll guess we'll know soon enough.

Another question of importance is: How? How is The Cartel still so successful at pulling off these raids? It's simple, actually. They're the only ones left in the pit. Well, them and some robots. Volume is so light and trading is so thin that the primary action in paper metal right now is Cartel manipulation surrounded by HFT WOPRs trolling for stops to game. When there's no depth or "muscle" on the bid side of the trade, it makes The Cartel's job that much easier. I'm not saying that we're going to be stuck here forever, mind you. However, I am saying that patience is going to continue to be required from those trading paper, hoping for another big, sustained move to the upside.

That said, there is some reason for hope. Over the past week, the total open interest in gold appears to have bottomed...at least for now. It banged around for a few days under 400,000 but has since turned and is now comfortably back above 410,000. This interest and willingness to play in the casino is vital for liquidity and liquidity must return for paper gold to surge higher again. Let's watch to see if OI continues to expand in the coming days. IF the BLSBS is metal bullish on Friday, let's look for an accompanying surge in OI as confirmation of trend change.

Lastly and along those lines, this week's CoT promises to be very interesting. For the reporting week, gold rose in price by nearly $20 and total OI rose by nearly 16,000 contracts or over 4%. How that rise in OI is dispersed among market participants will go a long way toward helping determine whether liquidity is returning. In silver, a different picture emerges. For the week, silver was essentially unchanged in price yet total OI fell by 11,500 contracts or 10%! Who was buying and who was selling? How did the net ratios of the specs and the EE change within this 10% drop? Again, the answers will be very interesting.

Here are your charts. Ahead of the BLSBS, I expect tomorrow to be a choppy, rangebound day with most traders unwilling to make a commitment either way. We'll be left with the same nonsense as today where WOPRs bang around, trolling for stops. $1645-50 should continue to provide support in paper gold as there continues to be buying support in physical metal at those levels.

Silver tried to rally and break out above $31.40 after bouncing off of $30 late last week. No such luck. It seems to have pretty solid buying support between $30 and $30.50. Let's hope for a continuance of support at that level as we head toward Friday.

<Having trouble adding charts. Keep checking back. Thank you for your patience.>


About the Author

turd [at] tfmetalsreport [dot] com ()


May 2, 2012 - 5:55pm


Yes, I"m first.

May 2, 2012 - 5:56pm


Dos on Dos de Mayo

May 2, 2012 - 6:01pm


My highest rank ever ! I feel like first might be in my reach sometime soon

May 2, 2012 - 6:09pm

top 10

yay turd!

May 2, 2012 - 6:09pm

Bankers blaming bankers?


The Governor of the Bank of England has blamed the banks for the recession and stressed that an overhaul of the financial system, including the separation of retail banking from "risky investment banking", was essential "to make our economy safer".

The comments will pile pressure on the Chancellor not to cave into the banking lobby and to press ahead with planned legislation to ringfence retail banking by 2015.

"We don't build nuclear power stations in densely populated areas, nor should we allow essential banking services and risky investment banking activities to be carried out in the same 'too important to fail' bank," Sir Mervyn said on Wednesday. "It is vital that Parliament legislates to enact these proposals sooner rather than later."

He also pledged to crack down on the "vested interests [who] rise up to defend their bonuses and profits".

Sir Mervyn underlined the scale of the financial crisis by claiming that "almost all Britain's banks would have failed had not taxpayer support been extended" to the entire system at the end of 2008, and not just Royal Bank of Scotland and Lloyds Banking Group, the two state-backed lenders.

May 2, 2012 - 6:19pm

Fourth / Piece of Pie

Thanks! Appreciate the update as usual.

I think everyone is so sick of the day to day take downs that a nice spikey up day hopefully is on tap for everyone soon.

Stone Temple Pilots - Piece of Pie
The man who stole a leopard
May 2, 2012 - 6:19pm


what a business meeting would be if it was a blog...

Internet Commenter Business Meeting
May 2, 2012 - 6:23pm
May 2, 2012 - 6:25pm


Turd, thank you for striking the heart of the issue surrounding the COMEX, et al. You are saying what many are silently thinking. I stopped trading the paper exchanges over a year ago aside from a pittance of play funds for exactly the reasons you outlined above.

Since then, I've moved entirely to trading Bitcoins. There is almost complete transparency, and the well-defined supply allows for accurate movement estimates within the system itself. The derivatives environment is developing, providing stability and opportunity. Lending is also amplifying. There are business models emerging that simply weren't possible with traditional finance.

Bitcoin startup Coinlab lands $500k in VC

We Pay Up To $50 Per Month For Idle Time

There is no cartel that can stuff Bitcoin right now, and the mechanism is not easily overcome. I trust only Bitcoin and physical gold & silver with my stored wealth.

May 2, 2012 - 6:28pm

where are charts?

where are charts?

Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

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Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

Key Economic Events Week of 10/7

10/8 8:30 ET Producer Price Index
10/9 10:00 ET Job Openings
10/9 10:00 ET Wholesale Inventories
10/9 2:00 ET September FOMC minutes
10/10 8:30 ET Consumer Price Index
10/11 10:00 ET Consumer Sentiment

Key Economic Events Week of 9/30

9/30 9:45 ET Chicago PMI
10/1 9:45 ET Markit Manu PMI
10/1 10:00 ET ISM Manu PMI
10/1 10:00 ET Construction Spending
10/2 China Golden Week Begins
10/2 8:15 ET ADP jobs report
10/3 9:45 ET Markit Service PMI
10/3 10:00 ET ISM Service PMI
10/3 10:00 ET Factory Orders
10/4 8:30 ET BLSBS
10/4 8:30 ET US Trade Deficit

Key Economic Events Week of 9/23

9/23 9:45 ET Markit flash PMIs
9/24 10:00 ET Consumer Confidence
9/26 8:30 ET Q2 GDP third guess
9/27 8:30 ET Durable Goods
9/27 8:30 ET Pers Inc and Cons Spend
9/27 8:30 ET Core Inflation

Key Economic Events Week of 9/16

9/17 9:15 ET Cap Ute & Ind Prod
9/18 8:30 ET Housing Starts & Bldg Perm.
9/18 2:00 ET Fedlines
9/18 2:30 ET CGP presser
9/19 8:30 ET Philly Fed
9/19 10:00 ET Existing Home Sales

Key Economic Events Week of 9/9

9/10 10:00 ET Job openings
9/11 8:30 ET PPI
9/11 10:00 ET Wholesale Inv.
9/12 8:30 ET CPI
9/13 8:30 ET Retail Sales
9/13 10:00 ET Consumer Sentiment
9/13 10:00 ET Business Inv.

Key Economic Events Week of 9/3

9/3 9:45 ET Markit Manu PMI
9/3 10:00 ET ISM Manu PMI
9/3 10:00 ET Construction Spending
9/4 8:30 ET Foreign Trade Deficit
9/5 9:45 ET Markit Svc PMI
9/5 10:00 ET ISM Svc PMI
9/5 10:00 ET Factory Orders
9/6 8:30 ET BLSBS

Key Economic Events Week of 8/26

8/26 8:30 ET Durable Goods
8/27 9:00 ET Case-Shiller Home Price Idx
8/27 10:00 ET Consumer Confidence
8/29 8:30 ET Q2 GDP 2nd guess
8/29 8:30 ET Advance Trade in Goods
8/30 8:30 ET Pers. Inc. and Cons. Spend.
8/30 8:30 ET Core Inflation
8/30 9:45 ET Chicago PMI

Key Economic Events Week of 8/19

8/21 10:00 ET Existing home sales
8/21 2:00 ET July FOMC minutes
8/22 9:45 ET Markit Manu and Svc PMIs
8/22 Jackson Holedown begins
8/23 10:00 ET Chief Goon Powell speaks

Key Economic Events Week of 8/12

8/13 8:30 ET Consumer Price Index
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Labor Costs
8/14 8:30 ET Philly Fed
8/14 9:15 ET Ind Prod and Cap Ute
8/14 10:00 ET Business Inventories
8/15 8:30 ET Housing Starts & Bldg Permits

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