One More Day

369
Thu, Aug 30, 2012 - 10:28am

Well, it's Thursday. This can only mean two things: 1) Just one more day until The JacksonHoleDown and 2) College football season begins tonight!

For all intents and purposes, here's the only thing that seems to matter right now:

8/31/12 Speech--Chairman Ben S. Bernank
Monetary Policy Since the Crisis
At the Federal Reserve Bank of Kansas City Economic Symposium, Jackson Hole, Wyoming
10 a.m. EDT

I suppose I could wax philosophic and even poetic about momo algos and Cartel capping but what would be the point? For today, I'm confident that we will simply trade back and forth between 30.60 and 30.80 in silver and 1660 and 1670 in gold. <yawn>

Look, I don't have a crystal ball for Fed-speak. The only person who knows what The Bernank will mutter tomorrow is The Bernank, himself. (Well, and maybe his butt-boy, Hilsenrath.) However, I can tell you this:

  • The fundamentals for the metals are overwhelmingly positive
  • The charts look poised for another leg higher

Might I be wrong? Of course. However, I'm confident that any Cartel-inspired Fed gaming tomorrow will be met with considerable bids for physical metal at discounted prices. This unceasing physical demand will continue to provide a floor for paper price and, consequently, any dip tomorrow must be bought.

That said, they may not be a dip to buy. Look at these charts. First, here are the daily charts showing that, after the runup last week, prices are simply consolidating in the zone where you would expect them to:

But now look at these 4-hour charts that include the 4-hour Relative Strength Indices. Remember, RSI is simply a measurement that allows you to assess the degree to which a market may be "overbought" or "oversold", in the short-term. The sideways action this week, though enfeebling and frustrating, allowed us the time to work off some RSIs that had worked well into the short-term overbought area. Note that, on the charts below, the RSIs have now retrenched back to the levels last seen before the big blastoff two weeks ago. This is a very positive sign that the markets are poised to move higher again and I would expect that move to begin very soon.

Have a great day!

TF

About the Author

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

  369 Comments

Island Guy
Aug 30, 2012 - 11:09am

Recent Drop May Not Be the Cartel

Turd pointed out that recent history from the Cartel would suggest the possibility of a raid tomorrow, driving prices of silver down. However, let me point out the obvious. The large speculators are not stupid. They undoubtedly noticed the same pattern Turd did. Wouldn't it make sense for them to front run the Cartel and get out of silver a day early? Makes sense to me. If so, the recent drop in silver prices today (a day early) may have nothing directly to do with the Cartel.

But this raises another question. If the Cartel's actions have so influenced the market that it is doing their work for them, is the Cartel more likely to (1) skip the beat down otherwise scheduled for tomorrow, since their job is done for them while they get to keep their hands clean, or (2) does the Cartel take advantage of the situation they have created to drive prices even lower tomorrow?

Big Dutch TitanAe
Aug 30, 2012 - 11:09am

Not so Sure

I get why people keep saying there will be no QE before election, but I'm just not sure I buy it.

1) If the Fed really does give a hoot about politics, would fallout for QE3 be greater before or after the election? With the average American's attention span being somewhere between 10 minutes and one month, I think at least an argument can be made that now may be the more ideal time for The Fed to move.

2) Most Americans have no clue about what QE is or how it works. Do you really think more than a tiny fraction of voters will change their vote Nov. 6 based on QE or no QE?

3) I have a gut feeling that Benny will keep his job regardless of who wins Nov 6. More importantly, he knows it.

4) Climbing dollar and rising rates have the potential to cause far more fallout than QE.

My opinion, it's far from sure. More of a coin toss.

Orange
Aug 30, 2012 - 11:09am

smack down

looks like the same as yesterday. What do you think, should be back up to $30.88 by early this afternoon.


Aug 30, 2012 - 11:10am

Euro weakness

Leads to dollar spike.

On extremely thin volume, the buydollar/sellgold algos can move the market pretty quick. I would expect that we will soon see a reversal as The Cartel uses this weakness to cover shorts. Not an FUBM. Simply Cartel using brainless HFT selling to cover shorts at low prices.

RTMoney
Aug 30, 2012 - 11:11am

Selling into JH

Everything is selling into tomorrow's JH event. Leading into past events where the Bernank was to speak asset classes across the spectrum crept up to the event then fell on disappointment. This time we prices dropping across the spectrum into the event. I think the market is saying it doesn't see more QE tomorrow. Buy the rumor, sell the news... Well in this case sell the rumor buy the news...

Most likely: No QE - Continued downward pressure into tomorrow for everything, small bump after the oversold market corrects itself.

In realm of possible but not likely: QE∞ - Big pop in everything, bigger pop in commodities, followed by a slow bleed as the market realizes it overbought and then everything is back to normal.

HeNateMe
Aug 30, 2012 - 11:16am

@Dr Jerome

Thank you for the compliment!

OC15
Aug 30, 2012 - 11:22am

$5 MS Jan14 Put Options

Just 31 cents!

ivars
Aug 30, 2012 - 11:23am

A story

Bought 2000 Oz XAG at 30,78.

Submitted by ivars on August 30, 2012 - 5:23pm.

Bought 2000 Oz XAG at 30,78. Time to move.

Oops , ,may be half an hour

Submitted by ivars on August 30, 2012 - 5:54pm.

Oops , ,may be half an hour early.. what happened to EUR?

Ah, clear. Knee jerk reaction.

IT will be back. Too fast drop.

¤
Aug 30, 2012 - 11:25am

Round and round it goes...

...where you're on it, nobody knows. Do you?

https://www.ritholtz.com/blog/

Groaner
Aug 30, 2012 - 11:26am

90% of the time they hit the metals around 10am eastern.

of course this is just coincidence. nothing to see here, keep moving.

Hey Bart, when are you going to earn your pay? Oh, thats right you are.. hahaha

¤
Aug 30, 2012 - 11:33am

The Federal Reserve and The Secret of Oz...

...on another slow and tedious market day waiting for Pavlov to elicit some drool or barking from the masses.

Money, Banking and the Federal Reserve
The Secret of Oz - Winner, Best Docu of 2010 v.1.09.11
JackPutter
Aug 30, 2012 - 11:35am

Market Distortions? Silver the Magic Metal.

This a repost from the last thread:

"I today's world silver is pretty close to being a magic metal."

I've been wondering about things made of silver, and I do agree that it's a magic metal. With market manipulations and distortions to things like resource prices and labor costs the idea that photovoltaics being sold from china might be a perfect storm at this moment in history. I have read that the imported panels are being sold below manufacturing costs.

With input costs of mining on the rise into the future, and the independence of self energy-generation, and the suppression of silver, the continued availability of helium (used in silicon wafer mfg.), the suppressed labor costs of China and such; I just wonder why I shouldn't buy some panels right now.

Has anyone else been trying to identify market distortions that might be taken advantage of by the average guy? Beef comes to mind as the drought is causing the cattlemen to sell so that they don't have to buy feed.

Oh by the way, my name is not Jack Putter and I'm a pretty honest guy. Keep up good work Turd!!

Maryann
Aug 30, 2012 - 11:37am

Hat tip remorse...

Cleburne, yes, I have done the same thing! Started reading, yes, yes, hat tip, then no, oh no, that's not where I thought this was going!

And, for what it's worth, I don't think you were the cause of the open floodgates...

TF, thank you for coming here day after day and sharing your thoughts. Please don't hold back, the vast majority of us believe you are a man of integrity and are honestly motivated to do good, and going the extra mile by sharing what you know with people you don't know. That is courage and kindness, and we are grateful.

Henateme, gorgeous picture, thank you for posting!

Swineflogger
Aug 30, 2012 - 11:38am
Dawg
Aug 30, 2012 - 11:39am

Silent Majority

Turd,

Yesterdays thread sure made the "silent majority" LOUD......

Thanks,

Dawg

stealthbear
Aug 30, 2012 - 11:43am

Just FWIW

will have non-binding happy talk on more , pointing but not confirming. Then the real happens Sept 13th

gdog
Aug 30, 2012 - 11:43am
tobydaniel
Aug 30, 2012 - 11:45am

Why would they do a quick cover of shorts now???

Not a chance. They will drag silver down to the 20's again with Jackson Hole and then cover a little. Why would they let go of the reins just yet? Aint gonna happen. The cartel knew that if they could get silver past 30.50, they would break support which is exactly what they have done. See you boys in the 20's tomorrow.

¤
Aug 30, 2012 - 11:48am

Central Bank Gold Purchases/ IMF comparison charts

Russia, Turkey, Ukraine Buy Gold But Bullion Tiny Part Of Global FX Reserves

Gold edged off of its 4 month high as some participants may have decided to take profits ahead of the Jackson Hole Symposium on August 31st and September 1st. Market participants expect speeches by Bernanke to offer clues with regard to further QE or what it will in time be known as – counterfeiting.

Russia, Turkey, Ukraine and the Kyrgyz Republic have again expanded their gold reserves.

July saw Russia’s biggest increase since since October and Kazakhstan increased their bullion reserves for a 12th consecutive month.

Russia’s assets rose about 18.6 metric tons to 936.6 tons last month and Kazakhstan’s climbed 1.4 tons to 103 tons, data on the International Monetary Fund’s website showed according to Bloomberg.

Both countries’ holdings are at the highest level since at least 1993, the data show.

Turkey, Ukraine and the Kyrgyz Republic expanded bullion reserves in July, while Guatemala and Mexico reduced them marginally, according to the IMF data.

(click charts)


IMF World Gold Reserves in Millions Fine Troy Ounces

Ukraine bought 0.2 ton in July, the Kyrgyz Republic added 0.1 ton and Turkey’s bullion reserves jumped 44.7 tons to 288.9 tons, the data showed. The country’s holdings have increased due to it accepting gold in its reserve requirements from commercial banks. Guatemala cut gold holdings by 0.2 ton and Mexico reduced them by 0.1 ton, the data showed.

Gold now accounts for about 9.2% of Russia’s total reserves and 16% of Kazakhstan’s, according to the World Gold Council.


IMF World Total Reserves Minus Gold in Millions of SDRs

That compares with more than 70% for the U.S. and Germany, the biggest bullion holders and less than 2% for China.

Central banks have been expanding reserves due to the highest level of monetary and systemic risk in living memory. Many central banks are concerned about the outlook for the dollar, the euro and indeed the pound.

Nations bought 254.2 tons in the first half of 2012 and are likely to add close to 500 tons for the year as a whole, the London-based World Gold Council said earlier this month.

Central banks were net sellers for the best part of 50 years despite the massive increase in the global money supply and indeed of international foreign exchange reserves in that period and especially in recent years (see important charts above).

Therefore, there is a real possibility that the recent shift to becoming net buyers may be a game changer as central banks are now likely to be net buyers for a long number of years to come....

https://www.goldcore.com/goldcore_blog/russia-turkey-ukraine-buy-gold-bu...

Fired
Aug 30, 2012 - 11:51am

@henateme

Lovely photo. Brings back wonderful memories of swimming with turtles at Black Rock. Beautiful place.

Mickey
Aug 30, 2012 - 11:51am

Metals, Cartel, GATA , Murphy and Turd

patterns.

GATA had a conf in DC a while back--as Murphy spoke--metals were hammered.

Now--Turd speaks of near term range and almost to the minute he posts, metals get hammered below range. And after SPX got creamed. Well after. A disconnect. And a waterfall in PM.

Coincidence?

BagOfGold ¤
Aug 30, 2012 - 11:51am

DPH...

Thank You so much for that investment sentiment wheel!...Today I'm a buyer...& when others are buying...that's when I'm selling!...I have to laugh...each & every time the miners go up...folks always ask if it's a good time to buy...when the share price of the miners are at an all time high!...It's best to remember...those who buy at the lowest price...are the biggest winners!!!...

Bag Of Gold

maravich44
Aug 30, 2012 - 11:56am
Fortinbras
Aug 30, 2012 - 12:03pm

For "Lapp Nils" and any other Swedes out there...

... call me "gay" if you must, but this song just always puts me in a good mood! Best of all, it's so "old" sounding that it makes my kids go crazy in the truck, and for that alone, it is a great song! I warn you now, it can be catchy in a terrible, terrible way! ;)

Video unavailable

Aug 30, 2012 - 12:04pm

Good drought impact article

From Chris Martenson:

https://www.peakprosperity.com/blog/79547/us-drought-hitting-harder-than-most-realize

And here is your latest "Drought Monitor" from NOAA and the Univ of Neb. Give it a few seconds and the animation starts automatically: https://droughtmonitor.unl.edu/12_week.gif

tyberious
Aug 30, 2012 - 12:08pm
Fired
Aug 30, 2012 - 12:09pm

From Zerohedge

https://www.zerohedge.com/news/gold-option-traders-most-bullish-bottom-o...

A new and important bullish indicator for the gold market is that gold calls are at highs not seen since the October 2008 low as option traders go long gold in the belief that it will go higher.

It suggests that option traders believe that U.S. Federal Reserve Chairman Ben Bernanke will hint at or announce additional money printing and monetary easing at the Jackson Hole, Wyoming, symposium.

Alternatively, it suggests that they are bullish on gold due to the risks posed to the dollar and the risk of inflation taking off.

The ratio of outstanding calls to buy the SPDR Gold Trust versus puts to sell jumped to 2.69 to 1 on August 24th and reached 2.76 earlier this month, the highest level since October 2008, according to data compiled by Bloomberg.

Ownership of calls is up 26% since the July 20th options expiry. Ten of the most owned actively owned ETF option contracts are bullish.

¤
Aug 30, 2012 - 12:11pm

Fort

Lmao! That's funny what you just said.

I have some favorite 'soft' songs also that put me in a pleasant frame of mind.

Ok...this is where DPH reveals his soft side

(Thanks Fort for your words last night, they mattered.)

Badfinger - Day After Day (1971)
Ned Braden ¤
Aug 30, 2012 - 12:18pm

@ DPH

One of the BEST tunes by the ONLY group besides the Beatles to record on APPLE !


Aug 30, 2012 - 12:22pm

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