The pressure and volatility will only be ramped higher with each, successive day. I hope you're ready.
Sorry for the delay in posting this morning. This week promises to be so consequential that there were several people I wanted to contact before writing today. One of them was my London contact, "Winston", who assured me that physical demand in London continues unabated, even at these higher prices. Winston feels that this demand is putting some serious pressure on The Cartels as they are pinched between massive paper shorts, underwater leases and unrelenting demand for physical. Sucks to be them. That said, they will almost certainly attempt some raids this week so we must be prepared.
For today, we've seen a nice and quiet, consolidative session. Gold has been weak but not overly so and silver refuses to give back any of last week's gains.
This likely sets us up for a Happy Tuesday as Cartel banks cover a few shorts ahead of the CoT survey. Covering on Tuesday provides two positive outcomes for them:
- It allows for more momentum-chasing spec money to be drawn into the metals.
- It frees up "ammunition" that can be re-applied post-CoT on Wednesday or Thursday.
The comparisons to 2/28-29 are too obvious to overlook. Recall that 2/28/12 was also a Tuesday. In anticipation of a beatdown, look at what was allowed on 2/28 and then look at what occurred on Wednesday, 2/29. Note the timestamps at the top of the charts:
Going further into the weeds, after last week there is little doubt that this week's CoT (when it is released on Friday) will look a lot like the CoT from 2/28. Therefore, WE MUST EXPECT Cartel manipulation this week.
There are two, critical events later this week which will provide plausibly-deniable cover for such a raid. First, on Wednesday, the German Constitutional Court will rule upon whether or not it is within the German constitution for Germany to participate in the ESM. ( https://www.businessweek.com/news/2012-09-09/german-court-decision-on-bailout-funding-looms-over-euro-crisis) This is a a dreaded "double wildcard" in that, first, no one can say with certainty how The Court will rule and, second, what kind of impact the ruling will have on global markets. For example:
- The Court rules against Germany in the ESM. Maybe the euro tanks and The Pig rallies? Maybe the metals dive because of "dollar strength"? Maybe the metals rally as a safe haven?
- The Court rules that Germany can participate in the ESM. The euro rallies and the metals rally, too? The euro falls in anticipation of new euro issuance? This rallies The Pig and the metals dive?
See what I mean?? No one can say what the heck will happen. Therefore, you have to expect that The Cartels will attempt to game the situation to their advantage.
And then, of course, we've got the FOMC meeting which concludes on Thursday. First, we'll get Fedlines at the conclusion of the meeting and then we get a Bernank press conference shortly thereafter. To say this this situation will allow for Cartel manipulation would be an understatement and an insult to your intelligence as a Turdite.
Anyway, what I'm getting at is volatility. Serious volatility. And, looming over everything is this: What if The Fed surprises yours truly and actually proclaims new QE via renewed "asset purchases"? Then what? Maybe the metals don't dive, at all. Maybe, instead, they skyrocket on Thursday and into Friday?!? So, anyway, just be careful. Be prepared for a sharp pullback but don't get caught flat or out at the same time. Be smart and stay nimble. Use any weakness to add to your stack. Even if The Cartels are successful in forcing a pullback, their glory will be fleeting. Prices are truly headed much, much higher in the short, intermediate and long term.
Here's a random collection of some stuff for your Monday. First, Jim Quinn is back at his post after some time away. A very interesting article is here: https://www.theburningplatform.com/?p=40182
I have no idea what the heck this means but I guess it's bullish for gold: https://www.zerohedge.com/contributed/2012-09-10/long-term-oscillator-points-towards-gains-gold
This came out on Saturday and I saved it all weekend so that I would be sure to include it today. It certainly falls right in line with all the stuff I blather on a daily basis: https://www.zerohedge.com/news/name-new-reserve-currency-china-imports-more-gold-2012-all-ecb-holdings
And this came out on Friday. When we look back in a few months, we'll pull up headlines such as this one and the story a few weeks ago about Saudi ordering everyone home from Lebanon. We'll then mutter something to the effect of: "Boy, we sure should have seen THAT coming. The writing was on the wall." https://www.montrealgazette.com/news/Canada+closes+embassy+Iran/7206256/story.html
OK, that's it. Today has gone pretty much according to plan. Let's watch now to see if the metals rally strongly tonight and through the day tomorrow. If so, we can begin to prepare for Wednesday/Thursday.
Have a great day!