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 ()


May 23, 2012 - 9:10pm

Anyone get Phoenix Capital advisory service?

Hello all,

Just a quick question: does anyone here have any experience with the subscription service of Phoenix Capital (Gains Pains & Capital)?

Worth getting? Anything for non-US folks?

ps. Thanks as always for the site, Turd. Thanks also to everyone who posts with sound intentions.

fnord TexasStacker
May 23, 2012 - 9:29pm


My current LCS is in the Rice Village section of Houston.

It was busy in that little shop today.

May 23, 2012 - 9:29pm

Ann's latest on Penson

It is getting very ugly very quickly. Given everything that has happened (MF Global), is happening (Facebook IPO ripoff), and is going to happen (JP Morgan clusterbungle), if you think that you are somehow "safe" and "everything will shake out okay" and "no worries", you're simply out of your gourd.

TexasStacker fnord
May 23, 2012 - 9:42pm


No line like there usually is. Just love going there, drive past a few to get there.

May 23, 2012 - 9:45pm

Champagne Supernova

Video unavailable


May 23, 2012 - 9:46pm

Wire transfer questioning

I've been asked both these questions (ie, "do you need a loan?", and "what is this wire transfer for?"), and I finally discovered a way to blow-off both of them in one easy go: "I'm paying-off a mortgage judgment I defaulted on a couple of years ago".

No more questions.... of EITHER variety! :)

fnord TexasStacker
May 23, 2012 - 9:51pm


There was a line when I got there. But I've never had to wait for long.

Fr. Bill Prize Fighter
May 23, 2012 - 9:57pm

The Not-Inquiring Bank

Prize Fighter wrote:
That surprises me that you aren't asked. Have you done any in the past few months? I'm fairly certain it is required but is relatively new.

Oh, I've been making wires, never for less than $1k, usually ten times that amount, a few times several multiples of ten times, all since late 2010 up to three wires this month. I've just about made Bullion Vault my savings deposit site, stacking silver in the Viamat vault as the rent and SS checks land in my local bank checking account. I have never been asked what I was sending that money off to do. Nor, in the few cases when I repatriated some of my stack in order to pay intermitent bills (a wedding, college tuition, annual property taxes) was I ever asked where the money had come from, much less what I was going to do with it!

It's none of their business!

Prize Fighter wrote:
I hate it for all the obvious reasons but I don't put up a fuss because the recipient name alone makes the purchase obvious to anyone with google.

Well, maybe, maybe not. If you were wiring money to Ampex, for example, they'd probably not know. At any rate, my bank has this form the wire clerk needs to fill out. The info I print out and hand to her from the BV site help screen has more data than she needs to fill out her form. And, no where on that form is there a blank for "What is the money paying for?" or anything like that. And, as I said, she (several different ones) have never asked.

Prize Fighter wrote:
I wouldn't sweat it but I am surprised they don't ask. And jealous. My bank is Regions.

Mine is Vintage Bank in a small North Texas town. It's only got three branches, all of them within 15 miles of one another -- all three in small towns. Tee-totally locally owned, not part of any state-wide, much less nation-wide system. My general physician and opthamologist are board members. All the board members are local professional people.

Whether the size/locality of my bank has anything to do with their persevering avoidance of asking me impertinent questions -- well, I just don't know. They're exceedingly friendly and helpful folks. Best customer service I've seen anywhere. Ever.

El Gordo
May 23, 2012 - 9:59pm

Stupid Question Forum

Should there be a separate forum for stupid questions, or can we just ask them here? Assuming we can just ask them here, here goes.

Stupid question #1: I notice that the 2011 ASE's carry a slightly higher premium than the 2012 ASE's, at least at the couple of places that I looked. Why would that be?

Stupid question #2: How many countries are represented on this site as commentators. For definitions of what constitutes a country, Eurpoe can be classified as one, and Texas as another. (That ought to start some sxxt).

Stupid question #3: See above Stupid question #1.

Eric King
May 23, 2012 - 10:09pm

Poll Results - How much physical silver are you stacking?

Here are the results of a poll I posted in the comments a few days ago. Gives you a good idea of what your average turdite is stacking. Approximately 20 tonnes of physical silver held by 267 people.

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