Gold and Silver Fun and Games

Wed, May 23, 2012 - 4:00pm

This is just getting to be far too predictable.

Let's see, first it was the April12 gold. Then it was the May12 silver. Today it was the June12 gold. What do I mean? Today was, once again, one day prior to option expiration and today, once again, we get a round trip in the metal as the poor losers who are left trading and hedging get their arses handed to them by the controlling powers of The Cartel.

As a refresher, what we saw in March and April, we saw again today. Namely, the handful of poor saps who had sold put options on the front month, thinking they had free money (Wouldn't you have thought that selling the June 1550 put looked like a safe bet back in February? Heck, maybe even late last week?) Lo and behold late yesterday, with just two days left before expiration, gold gets smoked on the Globex and is driven below its 10-day MA. WOPR selling ensues and before you know it, gold is near 1550 and headed lower. YOU, the poor sap that is short 100 June puts, have no other option but to sell short 100 June12 contracts, just to hedge yourself. Your selling (and everyone else caught in the same vise) sends gold even lower, toward 1535. All of this selling is gladly soaked up by The Cartel until...snap, boom, bang...they spring the latch on the trap and begin rallying gold back higher. Your new short hedge is suddenly squeezed and you eventually cover. This is particularly likely once price rallies back through and above that personally dangerous 1550 level. With gold back at 1560, you are now left with your original 100 naked puts that will expire worthless at 1:30 tomorrow as scheduled, however, you were just lightened of some considerable funds by the coercive, manipulative power of The Gold Cartel. Wash, rinse and repeat next month in July silver if prices continue down at these levels.

The selling of yesterday and today has established the basing/trading ranges that we began to discuss here yesterday. See this for a refresher: Of that post, this line in particular is the most relevant:

"Now, please don't misunderstand what I'm telling you here. I'm still extremely excited about where the metals are headed, particularly silver. The ranges I've described above are for the short term, maybe the next week or two and into early June."

Here are your charts that show these new ranges:

Here are some other nuggets that I've picked up as I've gone through the day. First, Jesse had this little ditty about KosherDakota who, as you know, is one my favorite Fed douchebags. This guy is a complete clown. Anyway, the speech Jesse references is not the first time KD has muttered this current bit of nonsense. I actually saw a headline on ZH about a week ago where this buffoon said the same thing that he said today. I was going to write about it at the time but by the time I doubled back to C&P it, the ticker had moved on. At any rate, enjoy the nonsense.

Trader Dan has a good comment today on commodities, in general. He also made an appearance on KWN. I highly recommend both: &

If you haven't yet, you should speed through this. I often listen to Coast-to-Coast as I'm shuttling LT#1 back and forth to ballet class. I caught part of this episode the other night. The stuff with Peter Schiff is definitely pertinent and well worth your time.

Video unavailable

And this is interesting. With the FB/silver spread now at just $4 or so, can the closure of the latest Hat Contest be very far away?

Have a great evening! TF

About the Author

turd [at] tfmetalsreport [dot] com ()


Dr G
May 23, 2012 - 10:29pm

Turd, great post, I

Turd, great post, I appreciate the insights. Schiff is usually spot-on in his analysis. I went to a live seminar of his several months ago and it was a pleasure.

I'd like to go to a live Turd seminar one day ... :)

Colonel Angus
May 23, 2012 - 10:30pm

to bam...

I wouldn't take the loan. Instead I have taken all of these 0% interest credit card offers. I applied for all of them right at the same time so that my credit score didn't take a hit. And then I've run up some $60,000-70,000 on them buying, well, you figure it out. I'm price averaged somewhere around $30 an ounce on the silver and around $1600 on the gold, so I'm presently under water on it. But I still have an average of 12 months to see some profits off of it. And of course I'm paying the 2% per month required payments every month, so it's dropping even more. You can also get a account that often gives 0% interest if you lurk around eBay for some of the shiny stuff.

The rest of my stack, a much more sizable portion, is cost averages about $15 for the silver and $1200 on the gold. Sure, I could be making a losing bet on the credit cards, but it's 0% interest. My stack is large enough to take a small dent on the off chance that the prices are not above my average as the 0% teaser rate goes away. But if I'm right (and Turd is too) then I've added to my stack virtually for free. Now my credit score has gone from the 820s down to 700 or so, but wtf do I care?

The best part is buying the phyzz with JP Morgan Chase credit cards at 0% interest. I get this childish naughty feeling of getting away with something really good.

El Gordo Bobbejaan
May 23, 2012 - 10:31pm

Stupid question forum - BJ

Texas is actually the part of Mexico that has paved roads which accounts for some people thinking it is a separate country.

Dr G
May 23, 2012 - 10:32pm

@Big Buffalo, the value for

@Big Buffalo, the value for accounting purposes is the price that somebody, in this case the buyer, is willing to pay me for it.

Therefore, on some sales I take a loss on a specific stack, and on others a profit. The times when I've sold have been few and far between, and have been to purchase guns.

That's my thoughts.

Eric Original
May 23, 2012 - 10:33pm

Big Buff

I count mine on a spreadsheet at roughly realizable price, i.e. what I could get for them at the LCS.

May 23, 2012 - 10:38pm

@ bam

Just my .02 but I wouldn't do it.

When tshtf and the $ is identified as confetti the first think tptb will do is index all debt balances to the confetti daily value.

The second thing they will do is levy a 90% or so tax on PM sales.

Just mho, but a loan like that would worry me.

S Roche
May 23, 2012 - 10:38pm

@ Manipulation

With the greatest respect....Netdania volume is ounces, not contracts.

More manipulation

Submitted by rl999 on May 23, 2012 - 4:14pm. Hat Tip! 34

"Capitulation, or the Apex of manipulation? NetDania’s 1 hour silver chart indicates 105,231silver contracts were dumped on the market this morning between 9am and 10am EST, as silver was smashed a dollar from $28 to $27.

To put this number in perspective, 105,231 contracts is north of 500,000,000 ounces of silver, nearly 2/3rds of entire world annual silver production trading in a single hour!"


Dr G
May 23, 2012 - 10:39pm

Thanks, Doc

Turdapalooza lineup:





Ranting Andy?

Trader Dan?


Jim Quinn?

The Comsikey?



Yours truly as MoC?

Dr G
May 23, 2012 - 10:40pm

Turd, get them all!

Turd, get them all!

May 23, 2012 - 10:42pm

bank wire questions

The last three times I have sent a bank wire (twice to Tulving and once to Gold Money) I have been asked by my local (small town) bank what the purpose was. When I expressed confusion the first time the question was posed, the bank employee told me they had to ask due to recent HSA regulations. I wanted to say, "Big Brother is watching you" but he was so young that I didn't think he would get it.

Haole Guy opticsguy
May 23, 2012 - 10:42pm


I was @ the LCS picking up some eagles for my 3 month old nieces' christening. I was bumbed out because I had just bought 10 oz online so I didn't have a lot of money to buy physical @ the LCS and he had a stack of englehard 1 oz bars I wanted to buy. Out of curiosity I asked the guy how business was and he replied that it had been the slowest in six years. Hopefully Turd is right and the price will stay flat for a couple weeks. That way I can go back and buy out his engelhard.

On a side note I was able to buy 1 90% silver half and 2 40% silver halves for face value this week from the bank. $1.50 for 3 silver halves, not a bad deal I have to say. I love averaging down on my halves by buying them for face value from the bank!

Big Buffalo
May 23, 2012 - 10:43pm


Dude, from a small business owner point of view:

All business is a risk. If you look at a Dunkin Donuts franchise, it requires a minimum of $25ok liquid assets and $500k net worth, to just get started. That's a huge investment and one has to weigh the risk/reward.

Taking out credit cards (ala kingboo's reply) is not such a bad idea 1) so long as silver can beat 18/21% interest rates 2) if things go sour, you do not care about your credit score, and 3) you can get a good number of credit cards. The positive is that Tony and Mikey are not coming to your house to break a knee cap.

You need to define "damn near guaranteed". Damn near hitting the lottery IS NOT hitting the lottery.

Finally, isn't this leveraging...and isn't leveraging how we got to where we are today?

- - - - - with all that said. . . sometimes it take s a big gamble to hit it big, you have to buy a ticket to win the lottery...small business owners are risk takers but also hard workers.

(and I like what Dr. G said about counter party risk)....but then again, if you're a young buck trying to make his place in the world.....

Dr G
May 23, 2012 - 10:43pm

@Bam, the downside is that

@Bam, the downside is that the metals go lower or stay in this price range for a long time. Maybe things don't really explode to the upside for 10 years. Nobody knows. Nothing is guaranteed.

That loan, and your money flow from another country, represent counter-party risk, or things out of your control. My personal mission is to LESSEN the number of strings attached to my life. I want to eliminate counter-party risk, not create more. For me that still applies even if it means I can't buy as much silver as I would prefer.

Prepping is more than buying metals, or leveraging yourself to do so.

Personally I would simply save up 50k to buy metals, or buy in smaller increments.

Dr G
May 23, 2012 - 10:46pm

Big Buffalo has some good

Big Buffalo has some good points. I'm opening new offices and taking out loans to do so. But of course I can show my business income and cash on hand and it isn't a big deal. There is NO ​promise the gold or silver will be higher next year. It sure seems like they should, but we were at $1950 and $50 over the past year. We aren't there now.

Then again the fact that we have been there sure presents good potential.

stealthbear TF
May 23, 2012 - 10:50pm


If you want Jim Willie to attend, it will have to be outside the U.S. As a long time subscriber to his newsletter I know he will not return due to personal threats made several years ago. You can check with him to verify.

Eric Original
May 23, 2012 - 10:53pm


I started a project like that in miniature about 2 years ago. I kept prices of gold, silver, a gallon of gas (my local station), a pound of ground beef (standard local sale price) , and the Dow Jones Industrial Average. Gas was chosen as a proxy for energy costs in general, and ground beef was chosen as a proxy for food in general.

Item/March 1, 2010/May 23,2012/% Change




Ground Beef/1.99/2.99/+50%


It appears to me that Gold and Silver have done exactly what they are supposed to do, and done it better than stocks.

Daring to suggest such a thing, and to dare to keep my own data, will undoubtedly put me on a government list somewhere...

Big Buffalo
May 23, 2012 - 10:54pm

Bank trip

Funny these bank stories are coming up today...I was at the bank yesterday to get them to switch up a couple of my account settings...the representative (very nice lady) after looking at my balance (which isn't much but probably decent) said , "you qualify for a FREE financial consultation with one of our professionals, would you like me to set up a time?" I smiled and replied ,"no thank you".

I was thinking, "If i wanted some snooty nosed 23 year old, fresh out of college kid with an accounting degree from an on-line community college, trying to make commission off of me by selling me the fist full of mutual funds designed perfectly for my future goals, by his company which makes bonus and override, to tell me how to manage my money . . .for free...did you say free? I can't remember when I had to pay for an adviser to make commission on product sales."

I should have met with the poor bastard and gave him/her a real education.

Vernon Wormer
May 23, 2012 - 10:55pm

Loans, inflation, accounting

Use the credit card angle instead of the loan. The unsecured aspect is worth it. In the end a strategic default may also work.

I'm in for the inflation chart. The wife and I keep very close track of what we spend. We are in northern CA.

I keep track of what it cost me in one column(including tax, shipping, etc) and what it is worth at spot today. (I enter the spot price in the AM and PM). I figure that is enough info for me. When it comes time to sell or barter, I may change my methods.

May 23, 2012 - 10:55pm


I may have posted something that I am may not be privileged to do. Sorry.

Suffice to say: Someone with a lot of street cred says Gold very good buy at this point. Breaking out of gigantic pennant to the up.

Roark Eric Original
May 23, 2012 - 10:58pm

@Eric Originale

"...We know where you live. We know where you bank. Beware the black helicopters. Resistance is futile..."

(That was a joke, son. hehehe)

vonburpenstein Eric King
May 23, 2012 - 10:59pm

Thanks for your....

Efforts, my friend

vonburpenstein The Green Manalishi
May 23, 2012 - 11:04pm

Re: Copper, Should we buy...

...A few hundred pound of the shit, banking on the come?

May 23, 2012 - 11:04pm


Thanks everyone so far for the replies. All well reasoned and thought out. Gives me something to chew on.


May 23, 2012 - 11:05pm

JP Morgan Derivatives are Naked Shorts against Silver

I can only speculate that the investigation on the JP Morgan derivatives loss is from naked shorts against Silver!


Dr G
May 23, 2012 - 11:06pm

LOL that FadeBook is

LOL that FadeBook is considering switching to the NYSE. They actually think that the problem lies with the trading exchange.

How about the fact that the "business" produces nothing and it's only real product will turn out to be the user's information.

May 23, 2012 - 11:08pm


Schiff very bullish on Gold too.

That is two big players who have come out today. Interesting.

Big Buffalo
May 23, 2012 - 11:12pm


tiny rant here....

Default IS NOT COOL. It's BS to even think about buying sh*t with credit cards knowing there's a possibility of default, especially when that's your back up plan. (Unfortunately, Americans and others are diseased with instant gratification and gluttony.)

Default is there for hardships...medical...lost of job...mental instability....the f-ing housing crisis that is killing America and the rest of the world. It's not there for the greedy to take advantage of, or I should say, i shouldn't be there for the greedy to take advantage of. We all pay for defaults, it's another form of taxation.

Sorry, maybe I'm old fashioned, but my word, handshake, signature, and balls are all I got in this world...and I'm not willing to break any of those for one body. (Name the movie from which the came from.)

Anyway, in summary. . .not cool.

May 23, 2012 - 11:13pm

Bank wire question

Tell them it's an insurance payment. Insurance is the simplest way to talk to the uniformed about precious metals. We all pay car insurance we hope we never have to use, life insurance, cancer insurance, ect..... Lets say an individual is sitting on $150,000 in cash. They think nothing of paying $1,500 a year for car insurance. Right now that same amount will net you 50 ounces of silver. If the SHTF how much of your cash have you insured? I like to think 10% $15,000 . This assumes a silver price of $300 per ounce. (let the heckling begin) Could be a lot less or perhaps a lot more?? My point is at least you have insured some of your buying power and wealth. Dollar cost average in buying 5-10 ounces per month and every month you have insured more of your wealth. Now lets say the can gets kicked down the road for ever (not likely). and silver drops. The $1500 you spent on car insurance needs to be pain again next year and your still insured on your pm purchase as long as you're not forced to sell. Give this logic a try next time you try to get some one to open their eyes. Long time reader. First time poster. Can't thank Turd enough for this wonderful site.

May 23, 2012 - 11:15pm


Think carefully. I did about the same thing last April and bought AG at 44. Still waiting for a nice move upwards before the interest rate goes up to 12% next August. I can afford the payment, but I don't like it. I took a risk--figured that it just had to be higher by now, but that deal is now -40%

You've gotta be able to live with your decision. Now is not a bad time to buy, but I think I concur with those who say buy as you can afford it.

Hey, is the ZH site down tonight?

Gold Five
May 23, 2012 - 11:21pm

@Dr Jerome

I used to live on that street in Savannah in your pic. Good times. :-)


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