Liquidation

307
Wed, May 30, 2012 - 11:34am

It's beginning to look a lot like 2008. Everywhere you go. Selling anything you can find, can ease your liquidity bind. From gold to stocks to crude and the eur-oh.

Wow! Does anyone else have deja vu, all over again? If it isn't nailed down, it's getting thrown out today. We're either at the end of this liquidation cycle/event or we're just at the beginning. Time will tell, I guess. I mean, for crying out loud, look at the euro. It's right at the lows of 2008 and just points away from the lows of early 2010.

Crude, too. Just nasty. Events in the MENA be damned, just sell Mortimer, Sell!

And, of course, this is all spilling over onto the gold and silver servers and motherboards pits. If it has a bid, sell it for pete's sake. While you still can! Regardless that The Great Reset is fast approaching. It's of little consequence that gold and silver will soon be revalued multiples higher. I need cash NOW! Sell Mortimer, SELL!

And, of course, in the background, just whom do you think is buying?? Never forget that for every seller, there is a buyer. Who might that be??

And I hope you're not expecting all of this to calm down anytime soon. Today is the last trading day of the June12 gold contract, also known as First Notice Day. As you've learned, FNDs are almost always DOWN days as The Cartels are wont to dissuade as many as possible from standing for delivery.

And I hope you realize that Friday is another BLSBS day. Surprising that it's on the 1st day of the month. I'd have expected it to be next Friday but it's not. It's this Friday. Two days from now. As you've learned, the metals are almost always sold off prior to and just-following the release of that monthly make-believe.

So, here are your charts. The GOOD NEWS is that buyers continue to emerge near $1535 in gold and near/above $27 in silver. The longer these levels can hold, the more the downward momentum will wane and, eventually, we might break out of the range to the UPside. Additionally, you should note that this is the third, consecutive Tuesday-Wednesday that saw the lows of the week in the early trading hours of Wednesday. Not coincidentally, those lows keep occurring near the $1535 and $27 levels. Let's see if another bounce will develop today.

Just a couple of other items for you today. First, I wonder what that old greaseball Buffett and his pal The Bernank think of this. What a strange new use for an otherwise barbaric and worthless relic ( https://www.telegraph.co.uk/finance/financialcrisis/9298180/Europes-debtors-must-pawn-their-gold-for-Eurobond-Redemption.html)

And this is fun. Part 2 of a 3-part series from our pal Jeff in Canada. ( https://www.bullionbullscanada.com/gold-commentary/25549-the-three-trends-which-rule-the-precious-metals-market-part-ii)

Lastly, our new buddy John Butler was on RT with The Lovely Lauren yesterday. I would imagine that John found this particular interview to be considerably more stimulating than the one he conducted with me back on Friday.

Alright, that's it for now. Have a fun day but beware the volatility and keep your eyes on the prize. I, for one, am going to post this note and head off to buy some more phyz. This time I'm thinking some 5-oz silver bars. We'll see. More later. TF

About the Author

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

  307 Comments

rl999
May 30, 2012 - 12:23pm

Au Ag %

I only buy silver due to the amount of fiat I have to spend. sure, some Au would be nice, but I can always trade when the GSR is good.

Punk-Assets
May 30, 2012 - 12:25pm

The mother of all bubbles.

The mother of all bubbles. History in the making:

https://finviz.com/futures_charts.ashx?t=ZB&p=w1

When The Levee Breaks Led Zeppelin +Lyrics
boatman
May 30, 2012 - 12:27pm

ten year US

at 162.7

jeeeez

PMs even catching some safe flight to

indosil
May 30, 2012 - 12:31pm

Beginning of bull run

equity market in bloodbath...us as well as europe...Precious metals up in this bloodbath....reversal of fortune for the brave Turd???

indosil
May 30, 2012 - 12:32pm

Time to buy crude Turd??

Time to buy crude Turd??

Urban Roman
May 30, 2012 - 12:35pm

FUSS .

FUSS

.

rl999 PaullyMoore
May 30, 2012 - 12:36pm

+1 PaullyMoore

This is one of the things I mentioned yesterday - not only do the BoS get discounted metal, they get to make the cartel/EE look like the ones behind the manipulation.

and who strapped the rocket to gold's arse today? 30$ swing in roughly 3 hours. Does this hold for the BLS? Or will the BoS sell into that weakness to breach 1530-ish

treefrog
May 30, 2012 - 12:36pm

dow/hui

dow minus 171

hui plus 2

i like it. i love it. i want some more of it.

Eric Original
May 30, 2012 - 12:41pm

80% Gold, 20% Silver

80% Gold, 20% Silver

Stock_Canines
May 30, 2012 - 12:44pm

A Close Friend

Of mine just phoned me and asked my thoughts on timing of making a large silver purchase. He was planning on waiting given the endless downtrend we appear to be in, but today has him nervous that gold / silver low may be in as they appear to be rallying in the face of a large decline in most markets. I told him I knew just the person (people) to ask. So, any thoughts. Would you buy now or wait until Friday/Monday. For whatever reason, he is a getting an itchy trigger finger. I imagine most will say it doesn't matter, because in a years time these prices will look cheap. Anyhow, would you buy now or wait for further downside?

Punk-Assets
May 30, 2012 - 12:47pm

re: a close friend

A regular dip into the metals is the best way to buy. Tell him to buy a little now and then a little Friday and then more next week if he wants. Going all in can be a let down and often discourages newbies.

OrangeAlert
May 30, 2012 - 12:47pm

Euro & Gold

Man these look similar. Euro weekly, Gold daily. I'm no expert. I just noticed it though. Any ideas? Throw it out, not important?

sevin
May 30, 2012 - 12:52pm

@Stock_Canines

I would have them buy in tranches to dollar cost average. He would be upset if he bought today and another waterfall came, but if it was a smaller purchase he could buy some more on the way down. I buy a certain amount per month no matter the price and hopefully I will be able to continue to do so.

Just my $.02

Torpedo Fish
May 30, 2012 - 12:53pm

@Stock_Canines

I would tell him to buy 30% now if he is not 100% sure this is the time

balz
May 30, 2012 - 12:53pm

To ivars

I follow your charts and I would like to know how your model works. I mean... how do you draw those charts ?

And I agree with Turd : I'd like to see a silver chart.

Thanks

AlienEyes
May 30, 2012 - 12:53pm

@ Dr. G

The charts finally make a bit of sense....for the moment.

Euro down. Dollar, gold and silver, up.

Flight from the euro.

Here we go.

Sharkysmachine
May 30, 2012 - 12:56pm

Uh oh, Gartman just said he

Uh oh, Gartman just said he doesn't see gold going much higher, says he's surprised at the recent move near $1580. Time to go all in, cuz if Dennis no likey, its time to do the opposite...

rl999
May 30, 2012 - 12:56pm

more downside

My next purchase is ~30oz Ag and I'm waiting till the BLS

A few days ago someone posted a list of three events, unemployment #'s and etc - I would certainly include that in my decision making process/advice to him.

Personally I feel that they will be massaged to show slightly negative results (instead of the true, very negative results), and that the market will react with lower pm prices. Regardless I'm buying before close on friday.

Big Buffalo
May 30, 2012 - 1:00pm

30 cents

come on FB, just a little lower.

Dr G
May 30, 2012 - 1:02pm

FB behaving as it should and

FB behaving as it should and down 2% again.

boatman
May 30, 2012 - 1:03pm

orange alert

since the posx is 48% the euro......and YOUR gold is measured in dollars......its natural for those charts to follow somewhat.

the hedgies HFT computer algos know this and are programmed to react......for now.....

rember the dollar was flat in july-august n gold flyed!!!!

this will change for good maybe when the US gets debt downgraded by fitch n moodys........late nov?

dropout
May 30, 2012 - 1:04pm

Who's Buying?

Look no further than China. An article in the WSJ reported by ZH

https://www.zerohedge.com/news/draghi-fiddles-and-madrid-burns-china-buy...

that China's State Grid Corporation has bought Spain's Brazilian assets in Actividades de Construccion y Servicios. That own high voltage transmission systems there. This is not stock. These are rock solid assets that China is vacuuming up, compliments of their mountainous US dollar reserves. Congratulations to the American consumerist society and the in debt giveaway government for bank rolling the Chinese acquisitions.

On top of that stupidity, add the asinine actions of the COMEX and the LBMA gold and silver manipulation of price to artificial lows, so that China may vacuum up the physical, as much as possible, as quickly as possible, on the cheap!

Eric Original
May 30, 2012 - 1:04pm

Anybody thinking about buying

Anybody thinking about buying oil stocks right now? I'm getting the itch...

T
May 30, 2012 - 1:04pm

unresolved debate....regarding ' close friend'

this question has been my unresolved debate all day.

I agree with palin.... we need to see a big spike down ,below 1530 and 27.

I agree with Turd that something big is developing soon ,so maybe we should be buying now, as in this morning, oops , too late.

A month ago when gold was above 1600 and the smart experts were saying it wont go below 1600...oops

now some are looking at a target below 1500

is there such a thing as a Quadruple bottom ? at 1530

seems like the price of metals is so easy to slam down and now so easy to blast up. whats the line in the sand where the battle is being waged....1550 ? or a range between 1500 and 1600 ?

too many pieces of uncertainty.

gut feeling.... todays low isnt low enough. I agree with Palin.

will we not see the sellers manage to slam it down to 1500 at least one time? and if so, will we get to buy any at 1500 if it happens pre market

maybe buy the dips a little at a time instead of all in. probably best idea.

rl999
May 30, 2012 - 1:07pm

Mineset newsletter

Jim Sinclair's Mineset Newsletter:

The following was sent in by CIGA Luis Ahlborn Sequeira.

Jim,

This is the new big thing in gold - capital adequacy ratios.

CIGA Luis Ahlborn Sequeira

The big new thing in gold - capital adequacy ratios

Ross Norman looks at the implications for gold of an increased focus on the assets banks are allowed to hold as tier one capital.

Author: Ross Norman
Posted: Tuesday , 29 May 2012

LONDON (SHARPS PIXLEY) - Forgive the hyperbole in the headline but we wanted to get your attention as something quite profound is happening that could propel gold to record new highs. Yes, potentially the biggest thing since the birth of the gold ETF and the liberalization of the Chinese gold market in 2003. A decade on and we have grounds for saying that gold may well see a significant leg higher... the big new thing in gold. I'll explain...

Banking capital adequacy ratios, once the domain of banking specialists are set to become centre stage for the gold market as well as the wider economy. In response to the global banking crisis the rules are to be tightened in terms of the assets that banks must hold and this is potentially going to very much favor gold. The Basel Committee for Bank Supervision (or BCBS) as part of the BIS are arguably the highest authority in banking supervision and it is their role to define capital requirements through the forthcoming Basel III rules.

In short, they are meeting to consider making gold a Tier 1 asset for commercial banks with 100% weighting rather than a Tier 3 asset with just a 50% risk weighting as it does today. At the same time they are set to increase the amount of capital banks must set aside as well. A double win potentially.

Hitherto banks have been much dis-incentivised to hold gold while being encouraged to hold arguably riskier assets such as equity capital, currencies and debt instruments, none of which have fared too well in the crisis. With this potential change in capital adequacy requirements. bank purchases of gold would drive up its value relative to other high quality qualifying assets, increasing its desirability for regulatory purposes further. This should result in gold being re-priced to bring it on a par with all other high quality assets.

Currently banks have to have core Tier 1 capital ratio of 4% of which will rise to 6% from the beginning of next year. In addition to its store of value merits, central to the argument in favor of gold as a bank reserve is its countercyclical nature to most other assets in that it tends to be inversely correlated. Gold is ideal as it bears no credit risk. it involves no other counter-party and it is no one's liability. It is a reserve asset diversifier if you like.

This is a treble win for gold - it would be a major endorsement of its role in preserving wealth and as a store of value from the highest financial authority, it would lead to significant purchases of gold by major financial institutions and it would lead to a reappraisal of its value with respect to other Tier 1 capital such as quality sovereign debt. Under the new rules gold could become a very significantly larger proportion of a reserve pool which is about to grow very much larger.

mapleleaf
May 30, 2012 - 1:10pm

Who has May 30 in the FB-Ag Pool?

Looks like you might get a chicken dinner tonight - spread is about 20 cents and closing.

@Stock_Canines - If I had a wad of cash and no PMs, I would spend 50% on silver 10oz bars and 1oz coins right now.

ivars
May 30, 2012 - 1:12pm

SILVER prediction reality comparison chart May 30 2012

Hi, Turd,

Since after todays action I have no more doubts that May 16th bottom was the final one, I have the courage to update Silver prediction chart( thanks for impulse anyway)-press right button, View image, zoom- excuse me for my charting quality:

I took away the annoying red April upshot. Seems I have missed the last significant bottom in silver by 2 weeks in time ( too early) and 4 USD in value. But what was reassuring, was that in my chart this was final bottom, so I was so happy to see today ( technicals ( triple bottom reversal on weekly, ascending triangle on daily) plus rapid and consistent divergence from USDx) supporting that finally. I think the green upshoot may be not so much off, as for silver to climb from 28 to 30 in mid June despite further increasing USDx might be not so hard as some imagine. May be two weeks later, and 4 USD below, but it will be moving up steadily from now on with a much higher pullback sometime in July.


May 30, 2012 - 1:14pm

re Euro/Gold tracking

I have been watching that for a while (watching gold in Euros and USD, and watching the EUR/USD) and gold in US dollars had been tracking the Euro quite closely. But lately that seems to be breaking apart, and right now in particular. Gold going up in both USD and Euros, while the Euro falls is something I think I have been waiting for.

Eric Original
May 30, 2012 - 1:14pm

FB/AG

Just to recap, I believe the rules were Comex close on Ag, versus market close on FB. What time is Comex close? Pretty soon I think.

RuNuts
May 30, 2012 - 1:16pm

Ivars Charts

Are predictive models based on historical market movements, I believe he's using the recent work of Sornette & Johansen to develope them.

Contribute

Donate Shop

Get Your Subscriber Benefits

Exclusive discount for silver purchases, and a private iTunes feed for TF Metals Report podcasts!

Key Economic Events Week of 5/20

5/20 7:00 pm ET CGP speech
5/21 10:00 ET Existing Home Sales
5/22 2:00 ET FOMC minutes
5/23 9:45 ET Markit PMIs
5/24 8:30 ET Durable Goods

Key Economic Events Week of 5/13

TWELVE Goon speeches through the week
5/14 8:30 ET Import Price Index
5/15 8:30 ET Retail Sales and Empire State Manu. Idx.
5/15 9:15 ET Cap. Ute. and Ind. Prod.
5/15 10:00 ET Business Inventories
5/16 10:00 ET Housing Starts and Philly Fed
5/17 10:00 ET Consumer Sentiment

Key Economic Events Week of 5/6

5/9 8:30 ET US Trade Deficit
5/9 8:30 ET Producer Price Index (PPI)
5/9 10:00 ET Wholesale Inventories
5/10 8:30 ET Consumer Price Index (CPI)

Recent Comments

by lakedweller2, May 25, 2019 - 11:02pm
by Nigel Black, May 25, 2019 - 9:50pm
by NW VIEW, May 25, 2019 - 8:43pm