Some Intriguing Charts

Thu, Jul 26, 2012 - 10:41am

Not much to add this morning but I wanted to pass along these charts. It's not much but it's a start!

On the previous post, I pointed out that both gold and silver were very close to breaking out of "pennant" formations on their daily charts. With today's action, they have! Now, again, take this for what it's worth:

  • These are simply formations at the base of the long-term pattern.
  • The primary ranges are still intact, namely 27-29 in silver and 1535-1635 in gold.
  • However, these initial breakouts are a positive development and may be the initial signal that he next move higher has begun. Watch closely to see if the breakouts can be maintained.

And I thought I would give you this chart of crude, as well. How many times have you read me stating that "what was resistance becomes support and vice versa"? Well, the crude oil chart shows this about as clearly as possible. Recall that for the past few weeks, I was telling you that $88 and then $90 would be critical levels for crude to pass IF it was going to sustain a rally. Well, take a look at the chart below. The next target for crude is to exceed last week's highs. IF it can do so, $100 will be clearly within its sights.

As I type, gold is 1616 and silver is 27.65. Not too shabby, especially considering that it's August gold option expiration day. Let's see if we can hold these gains for the rest of the day and then sit back and see what tomorrow brings.

Have a great day!


About the Author

turd [at] tfmetalsreport [dot] com ()


Jul 26, 2012 - 10:42am



Jul 26, 2012 - 10:44am



Jul 26, 2012 - 10:50am

He's back for more!

Cool keep the info flow going here ! Thanks TF!

Jul 26, 2012 - 10:55am



I am currently working on my next article. This is a sneak peak. I truly believe that future silver production is more at risk than gold. Thus, I believe silver will gain much more in percentage than gold.

We all know about the serious trouble coming down the pike when it comes to ALLOCATED GOLD & SILVER that has been sold into the market and replaced by paper certificates. The information that I will provide in this article will add insult to injury to a market that is about ready to explode.

A friend of mine and I recently took a drive around some old mining towns (now ghost towns) in Utah. We stopped at the old Frisco mining town and spent most of the day looking at the remains of the town as well as the mine itself. It was simply amazing to see that at one time, Frisco had a dozen saloons, businesses and several thousand people at its peak.

The Frisco mine later named the HORN SILVER MINE, was founded in 1875 and by 1881 was producing over a million ounces of silver a year. However, due to the rush to get the silver out and not bracing the mining tunnels correctly, the mine collapsed in Feb, 1885. The fortunate part about the major collapse is that it took place between shifts so no one was hurt.

The mine started to produce again at a decent rate in 1887, but never regained the level prior to the mine collapse. In the 30+ years the mine was open it produced over 14 million ounces of silver. This may not seem like a great deal today, but it was the largest silver mine in Utah at the time.

The most interesting part of researching the Horn Silver Mine in Frisco was finding out the tremendously high silver ore grades they were mining. When the mine first opened they were producing silver at a staggering 1,608 grams per ton (51.7 oz per ton). We must remember, at this time, the United States was figuring these ore grades by short tons or 2,000 pounds. The industry standard today is metric tonnes or 2,205 pounds. Thus, the earlier figures were 10% lower than the grades today. If we add that 10% to this figure we see that compared to present mining ore grades it would have been 56.8 ounces per metric tonne -- or 1,769 grams per tonne.

Visiting the mine in person, gave me the inspiration to write this article. I looked at several present silver mines and decided to compare the Horn Silver Mine with First Majestic. The chart below gives the STARK COMPARISON of how times have changed in 100 years.

Here we can see dramatic difference. During the entire 30 year lifespan of the Horn Silver Mine, they processed a grand total of 474,780 tons of ore and produced 14.21 million oz. However, if we look at just one quarter of silver production at First Majestic, they mined a total of 482,077 metric tonnes of ore in Q2 2011 and produced 1.78 million oz.

If you look at the difference in the ore grades between the two mining companies you will see it is about a 10 fold decrease. Again, we must remember, the Horn Silver Mine average ore grade is lower 10% than the present standard due to it was based on short tons.


Basically, we have a 10 fold decrease in 100+ years. We also must remember that during the early days, most of the mines did not use oil as a source of energy. It was coal, wood or human and animal labor.

The remainder (BULK) of the article discusses the energy issue and how it will impact the mining industry going forward. Furthermore, due to the fact that 70% of silver is a by-product of base metal mining, it will suffer much greater than gold when the energy crunch hits hard in the next several years.



This is a repeat post. I don't want to clutter the site with duplicate posts, but I thought this one was important to do so. Furthermore, there were several good questions and replies to this post that were answered in TURDS.....HANGIN' WITH WINSTON blog entry that you may find interesting.

Again... the full article will be out Monday...

Jul 26, 2012 - 10:59am


Pls send it to me when finished and we'll make a "guest post" out of it. Thanks!

Jul 26, 2012 - 11:04am

Interesting QE cheat sheet

Not buying it necessarily, but useful...

Jul 26, 2012 - 11:08am

JFK's executive order 11110

Though forgotten through time JFK's executive order has never been revoked,

Paper notes back by silver bullion, now that's a novel idea, why don't we give it another go.

Executive Order 11110 AMENDMENT OF EXECUTIVE ORDER NO. 10289


By virtue of the authority vested in me by section 301 of title 3 of the United States Code, it is ordered as follows:

Section 1. Executive Order No. 10289 of September 19, 1951, as amended, is hereby further amended-

By adding at the end of paragraph 1 thereof the following subparagraph (j):

(j) The authority vested in the President by paragraph (b) of section 43 of the Act of May 12,1933, as amended (31 U.S.C.821(b)), to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury not then held for redemption of any outstanding silver certificates, to prescribe the denomination of such silver certificates, and to coin standard silver dollars and subsidiary silver currency for their redemption

and –

By revoking subparagraphs (b) and (c) of paragraph 2 thereof.

Sec. 2. The amendments made by this Order shall not affect any act done, or any right accruing or accrued or any suit or proceeding had or commenced in any civil or criminal cause prior to the date of this Order but all such liabilities shall continue and may be enforced as if said amendments had not been made.

John F. Kennedy The White House, June 4, 1963.

Jul 26, 2012 - 11:24am


The Local Coin Shop here is just a small place. Not sure if due to lower Ag prices currently, his inventory is sparse. They never even advertise selling 90% pre- '64 silver dimes /quarters, but in conversation he says oh yeah I have a bunch, and put several coin rolls on the counter.

Though he also sells jewelry, that no doubt has picked up at a 'reasonable' price. Every time I 'm in there he tells me If I want to buy jewelry, he would hook me up.

While in there the other day, I wanted to get just a small something for the Mrs., not sure what. Decided upon a nice hand made sterling whale necklace. The owner was pumped , he said, " You always buy something, thank you!" And he said some people i had sent there did good business w/ him.

Better yet the wife was surprised. She calls it her Good Luck Charm, as when she wears it they have seen many whales offshore!

Doesn't take the big $ every time to have people smiling!

Jul 26, 2012 - 11:30am

More bad news for miners

Newcrest output sinks 15% in gold's record year

--Newcrest reports full-year gold production of 2.29 million ounces

--Output sagged on heavy rains, plant troubles as gold price hit record

--Investors reassured by recent lift in gold production

(Adds comments from shareholder in third and ninth-tenth paragraphs, analyst in eighth paragraph, CEO in eleventh-fifteenth paragraphs, and background throughout.)

SYDNEY--Heavy rain and operational difficulties pushed Newcrest Mining Ltd.'s annual gold output 15% lower, keeping Australia's largest gold producer by market value from capitalizing fully on a year in which the precious metal's value climbed to record highs.

Newcrest, which twice revised its production guidance lower during the year through June 30, grappled with bad weather at its Papua New Guinea mining operation as well as a prolonged plant shutdown. A deluge in Australia's New South Wales state late last year also triggered a landslip at its Cadia open pit, halting mining and temporarily restricting access for heavy vehicles.

"Operations have been put under stress, and there have been hiccups along the way, as miners have tried to capture the rising gold price," said Tim Schroeders, portfolio manager at Pengana Capital. "This is not a Newcrest-specific issue, though, and is more symptomatic of industry trends globally."

Urban Roman Patrancus
Jul 26, 2012 - 11:33am

Executive order 11110?

Paper notes back by silver bullion, now that's a novel idea, why don't we give it another go.

Because numbnuts Robomney does not have a clue, thinks the "private sector" is doing just fine, and their "advisors" (sycophants?) do not want it to happen.

Other than that, mebbe not such a terrible idea...

[edit] Oh, and it's worth mentioning that merely waving a magic wand and making the $ "backed by silver" (at what rate? The silver ¢ of 150 years ago?), would accomplish nothing much at all. Our whole Potemkin Economy, based on fraud, fraud, and more fraud, would have to be prosecuted, incarcerated, and replaced before it can begin to heal.

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