Squeeze Play

Fri, Jun 29, 2012 - 10:34am

It's hard to tell just who got squeezed first and the hardest. The equity shorts? The crude shorts? The gold shorts? Nope, those short the Euro are the ones really getting squeezed today.

Take a look at this chart of the $/Euro. Yes, that's 2.5 points (2+%) in about 10 hours overnight, while the U.S. slept.

And once the ball got rolling, it was only a matter of time until it smashed into everything dollar-priced. As I type, crude is up $4.21 to $81.90. The S&P 500 is up 23 points to 1352. And, of course, our precious precious have jumped higher, as well.

And just in time, too! Yesterday in silver was pretty scary. Price hung on the edge of support for most of the day. Had the area between 26 and 26.25 failed to hold, silver would have fallen very quickly. There is still the possibility that a stop-clearing, vomit-inducing drop may materialize if the coming days but it doesn't necessarily have to. Just pay attention and don't panic IF it does.

This next chart shows you how tight things are getting in silver. There is a tendency among chartreaders to see "descending triangles" and think that they will lead to breakdowns in price. I've always thought it was a sort of optical illusion. The downward-sloping line simply has more "eye appeal" and makes you think that the downtrend will carry the day. Look, however, at the strength and duration of the horizontal base. It's much longer than the horizontal line and therefore more likely to win the day. We'll see.

One more silver chart. Here's a 12-hour which shows you the current $27-29 range. Yes, there was a foray above and the recent drop below but, for all intents and purposes, silver has been stuck in this range and basing for almost 2 months.

Gold continues in a similar, basing pattern between 1530 and 1630. If you look closely, the support for gold consistently comes in between 1530 and 1550 and yesterday was no exception. Considerable physical demand below 1550 is the key to this support level.

And just for fun, here are the 5-minute charts for gold and silver. Note two things:

  1. The initial caps for the day have been set. Gold just above 1600 near 1602 and silver near $28. Further note the significance of $28 on the daily silver chart posted back up this page.
  2. Rather than acting in tandem, silver peaked a full 20 minutes before gold. Interesting.

That's all for now. The rallies continue and isn't that fun?! Nice to end the week on a happy note for once. Again, this week's CoT will be quite interesting so please check back after 3:30 EDT as I'll be adding some comments then. Also, I recorded a very interesting podcast with John Williams of ShadowStats yesterday. I'll be posting it later today, too.

Thanks again for a great week. It has been stressful but fun. TurdTalksMetals is getting all of its kinks worked out and the initial reviews are positive so I want to thank everyone who is participating. Have a great weekend!


About the Author

turd [at] tfmetalsreport [dot] com ()
Does Feb19 Comex gold close above $1250 on Friday?
Total votes: 183


wildstylechef · Jun 29, 2012 - 10:38am

yada yupper


and a good Friday to bee 2nd thank Turd for all the great help

offf to thr pool!

NoSurrender · Jun 29, 2012 - 10:39am


I'm all in

iceman321_2k2 · Jun 29, 2012 - 10:41am

Great Stuff

Thanks Turd.

Interestingly, Standard and Poor’s downgraded the United States’ credit rating for the first time ever last year. Yesterday, Egan-Jones credit ratings agency downgraded Germany by one notch from AA- to A+ with a negative watch. The effort to reevaluate the meaning of “zero risk” appears to be long overdue.

While we do not expect the proposal to make gold prices skyrocket overnight if approved, as gold bullion positions will be hedged, it does aid the recognition that gold is an important financial asset that lacks counterparty and downgrade risk, making it the ideal safe-haven. Some of the world’s largest and most powerful organizations have already realized this. The Bank for International Settlements, which is basically an international central bank looking over other central banks, recently released its latest annual report. It showed that the BIS reported a profit of Special Drawing Rights 758.9 million. However, about 15 percent of that profit came from the sale of physical gold and the repayment of gold loans. Apparently, gold is not as lifeless as some may think...


John Galt · Jun 29, 2012 - 10:45am

Thanks Turd

Enjoy your weekend!

Mudsharkbytes · Jun 29, 2012 - 10:53am

First, though I know some of you hate this sort of thing

…It's nice to be first on an up day. At least that's how it's starting out. So rare anymore. Hope we get more of them with increasing frequency.

In the meantime, here's some eye-candy to make the top spot a little more interesting:

And not to be outdone:

ReachWest · Jun 29, 2012 - 10:56am


Interesting to watch Gold hit that wall (ceiling) at $1600 and then hold/hover. To me it underscores the control that is in place on this market (of course, this is simply my anecdotal view). Whether it's Algo driven or psychological (or a bit of both), the Cartel still maintains a strong grip. A line is drawn in the sand and that line is held.

Good gosh - I wonder what would happen if that "control" were released.

The Springbok · Jun 29, 2012 - 10:58am

I have a question...

Turd, how does Sprott get his physical silver for his funds? Is it via London? If the point of the comex is to shake so many leaves off the silver tree that barely anyone takes delivery after first notice day, could Sprott, with their deep pockets, stand for delivery (especially in this July month). Harvey Organ is suggesting that after today there could be nearly 6000 contracts standing for delivery. Wouldn't that be enough to clear out the so called comex inventory in just this one month?

Or Am I completely way off the mark here....

Short Stack · Jun 29, 2012 - 10:59am

Oh what a new day brings...

Sat up this morning and immediately felt ill from memory of yesterdays SCOTUS ruling.

After sipping on some java and trying to keep my oatmeal down, I took a gander at the PM spot prices and suddenly felt like I could hold down something better for breakfast.

Regarding the SC decision, any federal tax, must begin in the House of Representatives. As I recall, the Obama Care Bill began in the Senate. A tax bill must be a tax bill, not a Commerce Bill.

As for the PM going up, well, let's just say I'm not the only one who woke up feeling ill.

billwilson · Jun 29, 2012 - 11:00am


Miners continue their sorry performance. So far Gold up 2.6%, miners (supposedly leveraged to gold) up a paltry 2.5%. With all the pair trades it is very hard for both miners and gold to go up at the same time. Plus gold never leads, which makes me think we will have a sizeable retrace before any real move up. Miners have to lead.

Silver is money · Jun 29, 2012 - 11:01am

Bear rallies are generally sharp and intense

Bull market rallies are not. 

From another board:

"I have described typical bear market rallies as having certain characteristics.
Simply put, they happen quickly, they are sharp, they feel good but bury you
quickly... after many investors are sucked in. 


Cries of a new bull market were heard across the land but to no avail.
The market would not cooperate. These occurrences have happened in past bear
markets. It is very tough to ignore these rallies. During these times,
investors who have lost money are wanting to make it back any way, shape or
form...usually jumping the gun."

Is this the real deal? Maybe. But this is our THIRD $50+ move in gold bottom to top (24 hr period) in the past 7 months (Jan 25, June 1 are the others). Is this time different?

Urban Roman · Jun 29, 2012 - 11:06am

Up or Down, it's all good.

I'm long paper gold in some retirement accounts, as they don't let me take delivery before I retire.

But if it drops any more, I'm calling a broker and get some phyzz. So it's all good.

When silver jumped last night, I went over and peeked at the currencies, suspecting there was a reason to be found. Sure enough:


Notice how they are on a seesaw.

Bluefin771 Mudsharkbytes · Jun 29, 2012 - 11:09am

The Big Coin

Thanks for the picture of the latest out of Austrailia. I'd heard they made it a legal tender coin but not what value it got assigned. The picture shows, 1,000,000 Austrailan dollars for face value. Seems to misprice the coin a bit, but in a typical fashion with other real money coins. I'd bet any bank putting this in reserves would be valuing it at ounce weight times spot plus premium and not 1 million of anything.

tread_w_care · Jun 29, 2012 - 11:17am

OT: Just completed my review of Liberty Coin

Probably not the best day to place an order, but here's a potential new option for us Turdites:


Hope that helps somebody with a decision.

Happy Friday!

The Springbok · Jun 29, 2012 - 11:19am

I think he bought his last

I think he bought his last batch directly from Canadian miners but I can't say for certain.

Does anyone else recall?

LOUP-GAROU · Jun 29, 2012 - 11:20am


Thanks Turd for the update, great to see a pop! I fear the euro zone hype that is happening today will not last, nothing written in stone yet. we will see,hope everyone has a great weekend. 

Dagney Taggart · Jun 29, 2012 - 11:20am


Voting for / signing this "tax" bill = political death wish*.

Great move SC!

Edit: *If they are lucky. Another 1776 is inevitable.

Magpie · Jun 29, 2012 - 11:23am

One more reason why Google sucks


As highlighted on our new policy page https://www.google.com/appserve/mkt/ApI7UWRj6OCZpd, in order to comply with the Google Shopping policies you need to comply first with the AdWords policies https://www.google.com/appserve/mkt/StQ08jAzM4fVtG. We do not allow the promotion or sale of weapons and any related products such as ammunitions or accessory kits on Google Shopping. In order to comply with our new policies, please remove any weapon-related products from your data feed and then re-submit your feed in the Merchant Center. For more information on this policy please visit https://www.google.com/appserve/mkt/GbBNIGHOribLzf.

S Roche · Jun 29, 2012 - 11:28am


From my reading I now understand that Comex is not generally regarded as a delivery exchange for PMs...industrials have deals with refiners, individuals just ring up a bullion bank if they want PMs and Comex futures are for hedging, arbitrage with OTC and speculating (all cash settled). Some delivery occurs, but about the same amount of gold as is delivered by The Perth Mint, (I have read and will check and report back).

The bullion banks appear to use GLD & SLV as free storage for inventory and dip into them to meet unanticipated demand. There is even evidence to suggest that Sprott's large silver purchase was obtained from SLV inventory.

If it is any help to you, I have never been able to understand Harvey Organ.

· Jun 29, 2012 - 11:29am

Watch this very, very closely over the weekend


From the article:

"The Syrian crisis was Friday, June 29, on a knife edge between a Western-Arab-Turkish military offensive in the next 48 hours and a big power accord to ward it off.

DEBKAfile’s military sources report heavy Saudi troop movements toward the Jordanian and Iraqi borders Thursday overnight and up until Friday morning, June 29, after King Abdullah put the Saudi military on high alert for joining an anti-Assad offensive in Syria. The Saudi units are poised with tanks, missiles, special forces and anti-air batteries to enter Jordan in two heads:
One will safeguard Jordan's King Abdullah against potential Syrian or Iranian reprisals from Syria or Iraq.

The second will cut north through Jordan to enter southeastern Syriam, where a security zone will be established around the towns of Deraa, Deir al-Zour and Abu Kemal – all centers of the anti-Assad rebellion. The region is also the home terrain of the Shammar tribe, brethren of the Shammars of the Saudi Nejd province.
The Saudi units deployed on the Iraqi border are there to defend the kingdom against potential incursions by Iraqi Shiite militias crossing into the kingdom for reprisals. The Iraqi militias are well trained and armed and serve under officers of the Iranian Al-Qods Brigades, the Revolutionary Guards’ external arm.

thesandbox · Jun 29, 2012 - 11:29am

Re: Miners

yes....hopefully they will lead the way one day again but for now they still seem to be down over well over 10% while the PM's are in the same range. Although many too do look quite oversold and at close or at some of the lows for the last 2 years. Also funny that no one mentions too often when talking about percentages that if something takes a 10% hit it needs a more than an 11% rise to get back to where it was.

babaganoush2307 · Jun 29, 2012 - 11:30am
brad_pitts_betterlooking_brother · Jun 29, 2012 - 11:31am



gets even better around the 8 min - 11 min mark.

tallydynasty · Jun 29, 2012 - 11:36am

Silver the Mule.  Been a

Silver the Mule. Been a rough year but Mules always eventually find their footing again. Good sign at least for the moment.

Stoxxman · Jun 29, 2012 - 11:37am
The Springbok · Jun 29, 2012 - 11:40am

thank you

thanks for the reply Turd & Sroche.

Turd (you may already have done this) but do you have a pod cast with Harvey Organ lined up for the future? I would love to hear his take on things (even though I read his blog, he is such a mental giant that I struggle to see where his linkages of events are coming from)

nakedempire TF · Jun 29, 2012 - 11:42am
Maryann · Jun 29, 2012 - 11:43am

Thanks TF...

Nice way to end the week and looking forward to the podcast with John Williams! Also, wanted to put a word in for Turd Talks Metals. What I am really enjoying about it is that TF explains information clearly and in such a way that even I can understand! smiley

realitybiter · Jun 29, 2012 - 11:44am

bear rally or early bull?

I guess we will know if today's highs can be taken out. If not, this will have to be looked at as showme situation and not showing is a big deal.

I think the pos index has already tipped the hand though.

copper seems to side with the inflationistas.....ditto grains....and omg, wtic....c'mon AG, poke Blythes boney butt a little harder.....

yesterday certainly had a "puke" factor to it. Generally a good sign for bulls.

4th of July....this year, instead of steeping yourself in escapism nostalgia, why not watch something painful, yet honest and current, like "Restrepo"? Great film, giving us all some insight into reality. "Battle for Haditha" also did a good job attempting expressing all sides of a very tough situation.


Vets need us! We need them!

I'm quite certain that if W and Rummy had actually spent some time with their feet in boots on the ground that many decisions would have been made quite differently. Vets have wisdom that politicians will never have. rant off.

Magpie · Jun 29, 2012 - 11:44am

Lucky guess, or something else?


The Supreme Court’s stunning rejuvenation of the Obamacare mandate into a new tax didn’t leak to Washington D.C. insiders — but it appears that it may have leaked to yet-unknown Wall Street investors.

In a brief 10-minute period starting at 9:32 a.m., the stock value of the nation’s largest hospital chain, HCA Holdings Inc., jumped from $26.81 per share to $27.53 as bidders bought several hundred thousand shares before the court made its announcement just after 10 a.m.

gosave · Jun 29, 2012 - 11:46am

to springbok

sprott generally buys his silver , as in pslv in very large lots, the last one was 350 million in january. Not sure if the funds themselves do much buying on a day to day basis.

he also acquires it for sprott money but in retail sized amounts.

The key is, with the potential of buying up to 1.5 billion worth of physical in the open PSLV prospectus,,, when is he coming.

I thought it already would have happened by midyear, it depends on institutional order flow, but he can do it overnight if he has the orders.

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