Thursday Gold Charts

Thu, May 24, 2012 - 1:24pm

With today being sort of a non-event because of gold option expiration, I've spent nearly the entire morning on the phone. All of a sudden it's 1:00 EDT and I realize that you need a new thread!

So, here you go. Again, though today looked promising for a while, it instead devolved into simple, algorithmic nonsense as the HFT trolled for stops and The Cartel painted the tape for minimum option pain. Let's see what tomorrow brings.

Speaking of boring, you've read here incessantly about the lack of volume and trading interest on the Comex post-MFG, particularly in silver. Well, check this out. Below is the change in price and change on total OI for silver for the past two weeks. Boring and strange at the same time. Instead of giving you my own interpretation of the data, I encourage you to place your own hypothesis in the comments.

Date Price Change Total OI

5/8/12 -0.66 to 29.46 113,549

5/9/12 -0.22 113,479

5/10/12 -0.06 112,558

5/11/12 -0.29 112,393

5/14/12 -0.54 113,546

5/15/12 -0.27 114,208

5/16/12 -0.88 113,663

5/17/12 +0.83 113,766

5/18/12 +0.69 112,914

5/21/12 -0.39 113,893

5/22/12 -0.14 to 28.18 113,647

Here are some charts. First up, look at gold. In the short term, the area around 1565 and the 10-day moving average is your center line of the range. Above there, and you've got a shot at 1600-1605 and a breakout. Below there, we must defend 1525-1530.

And these longer-term charts show you why I'm so confident that the low for gold is in.

In silver, though I'm confident that $26.50 will continue to function as support and a low, time still remains before we can get excited for a true breakout. In the words of Axl Rose, we need a little more patience.

Lastly, ZH has been emphatically recommending that we watch this "Frontline" video on MFingGlobal. I give it a big thumbs-up, too. It's about 20 minutes and it will piss you off. At the end, I found myself screaming at and cursing The Mullet for his inaction and his doofus-like, aw shucks attitude toward the whole affair. Ted Butler openly called for him, Gensler and all the rest to be fired yesterday. I wish I had the power to make it happen.

Watch Six Billion Dollar Bet on PBS. See more from FRONTLINE.

Watch Six Billion Dollar Bet on PBS. See more from FRONTLINE.

That's all for now. TF

About the Author

turd [at] tfmetalsreport [dot] com ()


tpbeta · May 24, 2012 - 1:28pm


Thanks Turd. Bit of solid TA - just what the doctor ordered.

recaptureamerica · May 24, 2012 - 1:33pm

Boo hoo I'm two

Boo hoo I'm two

murphy · May 24, 2012 - 1:41pm

Nigel- post lunch!

and from The Daily Bell

In answer to a question at the end of his commentary, he makes the point that a devalued drachma would certainly raise the cost of imports for Greece but it would also encourage innovation. The lower the drachma went and the less it bought outside, the more people would attempt to create local alternatives.

Inevitably, some of these alternatives might find a market OUTSIDE Greece. Thus it is that monetary competition fosters innovation. There is no substitute for it.

In fact, it is good to see this sort of point being made, as it is a free-market assertion. The idea is that people are not potted plants and that they will not sit idly by while their livelihoods are destroyed.

This gets to the nub of arguments currently being floated by pro-EU bureaucrats and officials. The argument is being made that Greece would be hit with a perfect storm of hyperinflation. But Farage's answer to that is that people take what Austrian-economist Ludwig von Mises called "human action."

People will make their own way in the world, and are especially apt to do so if they are not barred from doing so by laws, potential imprisonment, monetary fines, etc. All things being equal, most people are able to survive with the help of family, friends and community.

This is not the message being sent, of course. The pro-EU controlled mainstream media is in full cry over the horror of a Greek withdrawal from the EU – or at least from the euro. If Greece does it successfully, sure it will encourage others to do it, too.

Yes, those within the EU are deadly afraid of a successful Greek exit. Iceland has effectively made such an exit in its own way and the result has been a virtual news blackout on that tiny country's successes.

Here's hoping that Greeks get a chance to try to reclaim their national heritage – and a floating drachma. As Farage puts its, if the Greeks continue to stay in the EU with the euro they shall be "totally destroyed."

SV · May 24, 2012 - 1:41pm

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Dr G · May 24, 2012 - 1:43pm

Wow. Price movement started

Wow. Price movement started good but ugh. Gold now red. Just no sustainability to these movements. 

You guys know me--I'm looking to buy at prices lower than these. I hope silver tests 26.50 (and I think it will). 

Posting from a ride at Disneyland!

CBDooper · May 24, 2012 - 1:45pm

More Open Interest

Just to continue on your silver open interest, yesterday the July contract price dropped 0.66 while total open interest went up 458 contracts to 114,105. June Gold dropped $28.20 while open interest went up 5975 to 441,618. It's not liquidation causing the recent drops as open interest continues to rise on most of the down days. It's a joke whenever I hear the MSM talk about liquidation or hedge funds blowing up causing the declines. Since 4/30, gold OI has risen over 33k contracts while the price has dropped over $115. We have had only 4 up days during that period. I wish someone on the MSM would explain that to me.

rl999 · May 24, 2012 - 1:48pm

Groundhog day

Maybe the algos are bored, stuck in a loop? Death by a thousand cuts? Nibbling away trying to find something?

Edit to add: Perhaps there is only mild manipulation occurring, and the markets have no idea how to act/react..The calm before the next storm of delivery dates, euro-madness, and etc.

Since drinking the kool aid is mentioned frequently here

"The concept of "drinking the Kool-Aid" came from an event in 1978 where over 900 people died in a place called Jonestown in Guyana. Most of them supposedly died from drinking cyanide laced Kool-Aid. While questions have been raised as to the voracity of these reports, the term drinking the Kool-Aid has become synonymous with people who trust the sources of their information without question. I will stretch this out a bit and make the claim that Kool-Aid drinkers are those who trust anyone or any institution without question and do as they are told because of that trust.

Drinking the Kool-Aid kills. It zombifies the human being and removes its ability to blossom into an independent, thoughtful, free living organism able to determine its own fate. It removes free will. It turns a person into a robotic entity that will follow the will of its master right up to the point where its master causes its self destruction. So, who are the Kool-Aid drinkers today? Who are the next in line to have their strings pulled right up to the point where they self destruct?"

unthought known · May 24, 2012 - 1:49pm

did somebody say Axl?

Guns N' Roses - Patience
Paladex · May 24, 2012 - 1:52pm

Guns 'n Roses

Just when I thought ol' TF couldn't get any cooler, he throws in a mid-'90s GNR reference. For you whippersnappers out there, here's the song in question.

Video unavailable
dropout · May 24, 2012 - 1:52pm

New Film out TODAY

For those interested;

The new film "End of the Road" ~ How money was destroyed.

Can be found at

I have yet to view it, but have been waiting for it's release. If the previous work is any indication, it should be fascinating! 

Turd, thanks muchly for the charts and every little thing you do here.


Dr G · May 24, 2012 - 1:54pm

I hope everybody is paying as

I hope everybody is paying as much attention to what Turd is saying as well as what he isn't saying. 1530 is now in play. If that doesn't hold then...

Groaner · May 24, 2012 - 1:59pm

Look at this brutal sell off!

These guys will never give up... 

Straight down for 3 hours.. Cartel or what!

Anonymous · May 24, 2012 - 2:00pm

Removed comment

Removed comment.

EBR Mod 0 · May 24, 2012 - 2:05pm


I just keep adding as I can, come on cartel keep the smack down going.... cool

Dr G · May 24, 2012 - 2:09pm

Please allow me a little nuance here.

Please allow me a little nuance here.

Yes, 1525-1530 is The Bottom. This does not mean, however, that The Gold Cartel will not pick an opportunity to pull their bids and allow the spec shorts to guns the stops below 1525. This could very easily happen and you could see it unfold between London fixes, which is a 19.5 hour window of opportunity.

What I mean is this: Let's say we get a London pm fix someday soon (10:00 am EDT) at $1540. You get selling almost immediately that accelerates into the Comex close and is aggravated on the Globex and in early Asia trading. Stops are triggered are price falls rapidly on light volume to 1500 or even something that begins with 14. Suddenly this reverses and, before the London AM fix (5:30 am EDT), price is back UP to 1540 and it's as if nothing ever happened. What has happened, though, is that sell stops were set off and The Cartel was the buyer on the other side. The key determining factor of whether or not this event will play out is the total size and scope of the accumulated sell stop position at and below 1525.

If The Gold Cartel needs some new longs to lessen their risk and the stops are there in sufficient size for the harvesting, the likelihood of the scenario above playing out is high.

OrangeAlert · May 24, 2012 - 2:12pm

My guess for silver

Algos had control from 5/11 through 5/22 to "fleece" as Turd has called it.

Prediction, we bounce off of $28 and keep heading higher. Seems like regular traders (whatever those are) are creeping back in and the algos have been turned off. Although they could be turned back on as we approach $28.

Stratajema · May 24, 2012 - 2:13pm


The paper PM beat downs will continue and have meaning for physical price discovery until a change in demand whittles away at the built-up inventory of physical gold. That's how you find the floor in the physical gold price and we ain't reached it yet.

I noticed Chris Martenson switched his view on gold today. He was the guy waiting for a liquidity event to trip the price of PMs much lower. Now he says to buy now. Well, good luck with that Mr. Coward. I'm not spending my stink'in fiat until I see the panic event that the Fed needs to start QE again.

Stratajema · May 24, 2012 - 2:15pm

Chris Martenson

Chris Martenson works very hard and is clearly an intelligent man. He puts himself "out there" on a daily basis in his attempt to help as many as possible.

I do not think that your characterization of him as "Mr. Coward" is even remotely fair, Mr. Anonymous Internet Critic.

apex101 · May 24, 2012 - 2:15pm

being gold bus is painful now

being gold bus is painful now adays

Mickey · May 24, 2012 - 2:19pm

Overnite action

isn't that basically the cartels casino to make money--push it down cover push it up sell

Almost like it is worthless to watch overnight action--except we know that its not as it does set a tone for the next day--

the other amazing part is the up down price action in the 45 minutes before nyse opens.

croc987 · May 24, 2012 - 2:21pm

Remarkable how Morgue chart painting affects our attitude.

I am as bad as anyone. I admit it, when I see the paper price hammered, I get angry and frustrated, even though I know that the Crimex is just a digital con game played by HFT algos. Call me cynical, and excuse me if I am being painfully obvious, I have only been in the game about 2 years, but these guys can paint whatever chart and whatever price they want. They can create as much (or as little) "supply" and "demand" for silver as they want. This will ONLY end when enough buyers demand physical delivery and the 100-1 fractal reserve con game is exposed for what it is. Then upon an LBMA default, the whole rotten edifice will come crashing down. Or possibly the Morgue will self-destruct from CDS exposure. Until then we will continue to see ridiculous USD prices for silver.

I truly believe that this WILL happen and we will be richly rewarded beyond our wildest dreams.

And another thing. The CFTC is just beyond ridiculous. Just appoint the three stooges to regulate the markets. Or Gomer and Goober. How can anyone defend Bart these days? Anyone with any moral standards would resign in protest.

Oh and THANKS for all the awesome posts from TF, Ivars, SRSRocco, and many others. This blog is a goldmine of information and encouragement for the dedicated PM investor. And it is well moderated to get rid of the stupid trolls.

foxenburg · May 24, 2012 - 2:23pm


In answer to a question at the end of his commentary, he makes the point that a devalued drachma would certainly raise the cost of imports for Greece but it would also encourage innovation. The lower the drachma went and the less it bought outside, the more people would attempt to create local alternatives.

Inevitably, some of these alternatives might find a market OUTSIDE Greece. Thus it is that monetary competition fosters innovation. There is no substitute for it.,


​Rhodesia "illegally" declared independence from UK in 1965. It immediately became a pariah state, no country would officially trade with it, no-one would accept its currency, no-one would sell it oil, spare parts, or buy its tobacco - and it was widely touted by Harold Wilson, UK prime minister at the time, that Rhodesia would be brought to its knees in "weeks rather than months". British warships maintained naval blockades off the Mozambique coast for ten years so that nothing could sneak in via Mozambique.

But as a result, instead of importing everything as they had done, being an agricultural community (mostly tobacco), thousands of new industries were born overnight, manufacturing everything from mustard to shoe laces, diesel motors to synthetic fuel (from sugar cane). The country boomed, albeit with exchange controls so one could only have modest amounts of foreign exchange for vacations.

So Greece might well have a renaissance - and for sure it won't have the petty minded spiteful hostility that Rhodesia got from the rest of the world. Things went a bit pear-shaped after it became Zimbabwe, but that was for different reasons.

Stratajema · May 24, 2012 - 2:24pm


I take back calling him a Coward. But a few days ago that guy told a flock of subscribers to hold off buying based on his research, and then this morning he is saying the opposite. 

Consistency is important to a subscriber base. 

¤ · May 24, 2012 - 2:25pm

A Farewell To Kings

Thanks TF...we appreciate it as always yes

Going forward it's time for all Turdite's to appreciate one another  and recognize what each brings to the table and to stop talking about our differences but to embrace our commonalities and concerns.

When that isn't possible, consider using this or instead of

Rush-Closer To The Heart (Lyrics)
Xanadu by Rush with Lyrics

Need some eye-candy or some Turdite camaraderie? >>>


 Today's problems realized tomorrow were yesterday's missed opportunity to prepare for ~ IS7/2012

S Roche · May 24, 2012 - 2:27pm


 a bit pear-shaped

​lol...let me know when to worry, OK?

tpbeta Stratajema · May 24, 2012 - 2:30pm


NO NO NO. Massive mistake alert.

Consistency doesn't matter a fig. Being right is all that matters. If you were wrong before, and new info makes you decide to be right, that's a good thing not a bad thing.

#fail as my young friends would say.

Groaner · May 24, 2012 - 2:53pm

It looks like the metals are stuck to the S&P.s again

As the market started falling at 11 AM so did the metals, 

When are they going to cut the umbilical cord?

Dr G · May 24, 2012 - 2:54pm

Algos are crazy today. USD

Algos are crazy today. 

USD up. 

Oil up. 

Silver up. 

Gold down. 

Dow down. 

S&P down. 

Turd, thanks for the detailed explanation!

Dr G · May 24, 2012 - 2:56pm

Groaner, silver is UP over

Groaner, silver is UP over 1%. 

dropout · May 24, 2012 - 2:58pm

@ tpbeta Re: NO NO NO

Absolutely right.

When an honest man makes a mistake, he either rights the mistake, or ceases to be honest and lies.

Notice: If you do not see your new comment immediately, do not be alarmed. We are currently refreshing new comments approximately every 2 minutes to better manage performance while working on other issues. Thank you for your patience.

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