Weekend Review

481
Sat, Sep 22, 2012 - 12:16pm

What an interesting week. Instead of volatility, we got containment and flatlines. Something tells me next week won't be the same.

Ponder this for a moment, QE∞ is announced as official Fed policy last Thursday. That day gold, the only alternative currency to steadily-debasing fiat, responds with a $38 move. Frankly, I would have expected more but, given the Cartel propensity for containing daily moves at either the +1% or +2% levels, $38 seemed about right. However, over the next five days, would you have expected this?

  • Friday, 9/14: net change +$0.60
  • Monday, 9/17: -$2.10
  • Tuesday, 9/18: +$0.60
  • Wednesday 9/19: +$0.50
  • Thursday 9/20: -$1.50

So, cumulatively over the next five days trading in gold, immediately following the long-awaited announcement of QE∞, the total change was down $1.90. Huh?? And, again, it's not like we saw the +$20, -$22, +$31 kind of volatility you would have expected. Very strange and, once again, subtle evidence of the outright blatant and ongoing manipulation and "managed ascent" of the paper price by The Gold Bullion Banking Cartel.

To no one's surprise, this week's CoT continued the trend of Cartel naked short issuance to contain price. Again, I'm not really sure who wrote the mandate that JPM, DB et al have to act as market makers in the metals but, for some reason, that is the role they allege to play. Spec money comes into the pit and the banks issue the highly-leveraged paper. Not content to see price bid up as the spec bids search for willing sellers of existing contracts, The Cartel, instead, simply issues brand new contracts to satisfy demand.

In doing so, The Gold Cartel added another 18,196 short contracts this week and brought their net short ratio back up to an astonishingly dangerous (to them) 2.68:1. Why is this so dangerous, you ask? Because they are continuing to play this game as if none of the fundamentals have changed. This is no longer 2002 or 2008. It's not even 2011. We are near The End Game for fiat currency and the "creditor nations" around the globe recognize this. The are readily exchanging their rapidly-devaluing fiat for hard assets, gold in particular. This insatiable physical demand underpins the paper market and makes precipitous, short-covering drops, like we've seen The Cartel execute in the past, all but impossible. Oh sure, there will still be selloffs and beatdowns...Heck, we saw one yesterday...but incessant physical demand forces The Cartel to quickly turn tail and buy in order to cover and secure the metal required to meet the allocations sought at every London fix.

So, again, look to buy the dips. Not every $5 dip, mind you, but any substantial dip the pushes price back to obvious support points. Right now, the obvious area is around $1755-1760. IF a dip develops early next week, I'll be all over it. Gold looks certain to soon blast through $1780 and then $1800. From there, I expect a rapid move toward the old all-time highs of $1920. At that point, gold could, once again, get disorderly to the upside, similar to what we saw in August of 2011. It will likely break out and UP through the long-term channel again and head toward and through $2000.

And here is a long-term chart of gold priced in euros. Recall that we've been discussing for weeks how euro/gold was getting well ahead of dollar/gold and that dollar gold would eventually catch up. A month ago, euro/gold was showing that $1800 gold was coming. Now, euro gold makes it look like $1920 gold is only about a month away. (Chart courtesy Trader Dan: https://www.traderdannorcini.blogspot.com/2012/09/euro-gold-on-track-for-all-time-high.html)

And JPM and their pals continue to play games with silver, blissfully unaware that their dynasty has ended. Just last week, they added another 2,880 short contracts in a vain attempt to pin price below $35 and protect the vulnerable buy-stops near $35.50 that, if tripped, would send silver quickly toward $37.50. Oh well, screw 'em. So they "won" this week. Whatever. They're just going to lose eventually so what's another week of waiting. Now at a total gross short position of 82,358 contracts and a net short ratio of 2.58:1, The Silver Cartel is sitting on a powderkeg of their making. Boy is it ever going to be fun to watch it explode right under them.

As The Doc pointed out yesterday, The Forces of Darkness expended a lot of ammunition yesterday in a desperate attempt to start a cascade and keep price under $35. ( https://www.silverdoctors.com/cartel-dumped-2x-annual-us-silver-production-on-market-in-15-min-to-smash-silver-under-35/) They now find themselves in a bit of a jam as we head into Tuesday. They'll need to cover quite a few contracts before the 1:25 EDT close that day or they risk showing their footprints on next week's CoT. What will they do? Cover, of course! Now the question is, will they gamble by raiding first and hoping for a steep enough selloff that they can cover the raid "material" and more on the way back up? Maybe but I doubt it. Physical demand will easily blunt the dip again just as it did yesterday. Their only logical choice, after being thwarted yesterday, is to begin to cover yesterday's new shorts as early as Monday, otherwise they risk a significantly "Happy Tuesday" that blows out those $35.50-area buy stops and send price toward $37+. What to do, what to do. A whole lot of choices, all of them bad. HAHAHAHAHA! You did this to yourselves, you arrogant bastards, and now you're stuck. You'll get no sympathy around here.

And in case the action in crude this week left you feeling that global peace and harmony were right around the corner, I give you this to ponder: https://www.zerohedge.com/news/2012-09-22/head-irans-revolutionary-guards-war-israel-will-occur

In that same vein, I was contacted this week by a nice guy who asked me to link a few of his prepping articles. I certainly hope you are using this time to full consider these topics: https://destinysurvival.com/2012/09/03/food-storage-how-to-calculate-for-your-needs/ & https://www.emergencyfoodstorage101.com/2012/08/07/being-prepared-for-power-outages/. Of course (shameless plug coming), you can find many of these items by visiting the Turdmart, a link to which is conveniently placed at the top of each page but copied below for your convenience.

https://www.tfmetalsreport.com/preparation-store

I hope that everyone has a safe, fun and relaxing weekend. Come back on Monday and be prepared for a week that is considerably more volatile and interesting than this past one was.

TF

11:00 pm (23:00) EDT Sunday UPDATE:

So, what the hell happened at 20:58? Anyone have a guess? I do but, first, let's look at the charts:

At exactly the same time, the POSX began an uptrend that carried it 20 ticks higher over the next hour.

So, what we likely have here is another HFT algo (WOPR) run amok. True Cartel hit jobs rarely impact so many markets across the board. On a light volume Sunday night, a brainless computer "saw" the uptick in The Pig and began program selling.

Regardless of instigator or intention, it is going to be very difficult to break down paper price much further. Difficult but not impossible. That said, I will be very surprised to see the metals considerably lower in the morning as there is no reason to expect a buyers strike in London on Monday. As mentioned Friday, gold should have considerable support near $1750. Silver will continue to find bids, just as it did two hours ago, near $33.50.

Hang in there and try not to panic. If protracted selling does come in, consider it a blessing. Please consider any and all bouts of price weakness as opportunities to add to your stack.

TF

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  481 Comments

  Refresh
tyberious
Sep 23, 2012 - 10:24pm

my understanding

Is that the market makers, fund and portfolio managers adjust their positions at this time of the year, end of quarter, as to lock in profits. But then again this is thinly traded market, we will see in the morning.

silvermedusa
Sep 23, 2012 - 10:23pm

Relax and Random Thoughts

Tuesday is options expiry, they always slam PM beforehand. Monday will probably be a good day to buy. After expiry it will shoot right back up.

The thing that is making me go hmmmm, is the tungsten bars found in NY. Sounds like psy ops to shake some confidence in gold as the only true money. The EE is running very scared. I wonder if this options expiry will have a particularly strong dip as they slammed G&S pretty heavy at HK open. Verrrry interesting. Or are they giving China a gift for some reason? To back off Japan? The riots at Foxcomm are an interesting angle too. Are they trying to prevent China from taking a bite of the Apple? Apple would be very screwed if the iphone mfg is stolen, or, stopped for any length of period. Are we being blackmailed by China?

reefmanHeNateMe
Sep 23, 2012 - 10:15pm

> Here it comes!  The

> Here it comes! The waterfall. Oh God! Oh God! The horror! The horror!

You're a bit late to the game... that was so 21:00..... we're now 22:10.... get with it man. ;)

Green Lantern
Sep 23, 2012 - 10:13pm

It's not all the metals are

It's not all the metals are down. All the Asian Markets are down. Fear on. Until Tuesday, when it comes off again.

Asian Stocks Drop as European Crisis Talks Deadlocked

By Adam Haigh - Sep 23, 2012 6:39 PM PT

Asian stocks fell amid concern that talks among European leaders to resolve the region’s debt crisis are deadlocked, curbing the earnings outlook for the region’s exporters.

Canon Inc. (7751), a Japanese camera maker that gets 30 percent of its sales in Europe, slid 4.2 percent. Rio Tinto Group, (RIO) the world’s third-largest mining company, retreated 2.4 percent as declining copper prices dragged raw-material shares lower.Newcrest Mining Ltd. (NCM), Australia’s biggest gold producer, slid 2.1 percent in Sydney as JPMorgan Chase & Co. downgraded its recommendation on the shares.

The MSCI Asia Pacific (MXAP) Index dropped 0.8 percent to 122.45 at 10:37 a.m. in Tokyo, with almost four stocks falling for each that rose. The gauge climbed 5.4 percent this quarter through last week as central banks from Europe, the U.S., Japan and China took action to stimulate economic growth.

“A period of consolidation in the month ahead looks the more likely outcome,” said George Boubouras, Melbourne-based head of investment strategy at UBS AG’s Australian wealth management unit. The Swiss bank has about $1.5 trillion in assets under management. “In Europe, there will continue to be some lingering challenges. As we approach the end of the quarter, investors will fine-tune and adjust their portfolios across all the asset classes. This will include some profit taking and portfolio rotation.”

tyberious
Sep 23, 2012 - 10:11pm

@Dagney

Reassuring words! My advisor, because I often need help negotiating these markets, said that 33.50 or so should be support! He also said expect any weakness to be bought!

Green Lantern
Sep 23, 2012 - 10:11pm

QE VS Gold

Gold performance in a manipulated market.

What it's been two weeks since Ben signed the check? Wait until the liquid love gets spread around. Note that there were alot of nasty down trends in QE 1 and QE2. Blow up the graph. I still smell alot of fear among regular investors and institutional investors. The crack hasn't gotten to the brain yet. The crowd reacts. The wise are proactive. You guys are going to get ulcers if every sunday night you worry about these smash downs when in the big picture (see above) it's already been a stone gas (Don Cornelius) and more a coming!!!

HeNateMe
Sep 23, 2012 - 10:08pm

OMG OMG!

Here it comes! The waterfall. Oh God! Oh God! The horror! The horror!

HeNateMe

QE to infinity
Sep 23, 2012 - 10:08pm

UK government comes up with a new way to steal pensions

https://www.independent.co.uk/news/uk/politics/lib-dem-conference-pensions-could-boost-home-ownership-says-nick-clegg-8166328.html

So they want grandparents to use their pension funds to fund deposits for their grandchildren's houses, thus propping up UK housing market a while longer. Then the market finally caves in, wiping out those deposits.

This might actually suit some people, with large pension funds, as a way to pass some of that money on to their families, but I am sure a lot of people will be caught out.

The good thing is this pension-stealing scheme is voluntary, so far.

JimmyTheHand
Sep 23, 2012 - 10:07pm

It's not just silver

It seems to be across all the metals...

Prize Fighter
Sep 23, 2012 - 10:07pm

Horst, you you are mixing

Horst, you you are mixing philosophy and trading here. Many of us don't trade paper, so what you so smugly perceive as not wanting to hear it, is actually not caring about short terms moves. So $32.50 is your major smackdown buypoint? Oh my god, we're all going to be taken to the cleaners because we didn't scalp 5%.

It is you who doesn't seem to understand that gold and silver isn't just about performance but removing your consent from the system. Be clever all you want in the markets. Some of us choose not to play the game. Don't think you can school us on why we should play your way.

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Key Economic Events Week of 7/13

7/13 11:30 ET Goon Williams speech
7/13 1:00 ET Goon Kaplan speech
7/14 8:30 ET CPI for June
7/14 2:30 ET Goon Bullard speech
7/15 8:30 ET Empire State and Import Price Idx
7/15 9:15 ET Cap Ute and Ind Prod
7/16 8:30 ET Retail Sales and Philly Fed
7/16 11:00 ET Goon Williams again
7/17 8:30 ET Housing Starts and Permits

Key Economic Events Week of 7/6

7/6 9:45 ET Markit Service PMI
7/6 10:00 ET ISM Service PMI
7/7 10:00 ET Job openings
7/9 8:30 ET Initial jobless claims
7/9 10:00 ET Wholesale inventories
7/10 8:30 ET PPI for June

Key Economic Events Week of 6/29

6/30 9:00 ET Case-Shiller home prices
6/30 9:45 ET Chicago PMI
6/30 10:00 ET Consumer Confidence
6/30 12:30 ET CGP and SSHW to Capitol Hill
7/1 8:15 ET ADP Employment
7/1 9:45 ET Markit Manu PMI
7/1 10:00 ET ISM Manu PMI
7/1 2:00 ET June FOMC minutes
7/2 8:30 ET BLSBS
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Key Economic Events Week of 6/22

6/22 8:30 ET Chicago Fed
6/22 10:00 ET Existing home sales
6/23 9:45 ET Markit flash PMIs for June
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6/25 8:30 ET Q1 GDP final guess
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6/26 8:30 ET Pers Inc and Spending
6/26 8:30 ET Core inflation

Key Economic Events Week of 6/15

6/16 8:30 ET Retail Sales
6/16 8:30 ET Cap Ute and Ind Prod
6/16 10:00 ET Chief Goon Powell US Senate
6/16 4:00 pm ET Goon Chlamydia speech
6/17 8:30 ET Housing Starts
6/17 12:00 ET Chief Goon Powell US House
6/18 8:30 ET Initial Jobless Claims
6/18 8:30 ET Philly Fed
6/19 8:30 ET Current Account Deficit
6/19 1:00 pm ET CGP and Mester conference

Key Economic Events Week of 6/8

6/9 10:00 ET Job openings
6/9 10:00 ET Wholesale inventories
6/10 8:30 ET CPI for May
6/10 2:00 ET FOMC Fedlines
6/10 2:30 ET CGP presser
6/11 8:30 ET Initial jobless claims
6/11 8:30 ET PPI for May
6/12 8:30 ET Import price index
6/12 10:00 ET Consumer sentiment

Key Economic Events Week of 5/25

5/26 8:30 ET Chicago Fed
5/26 10:00 ET Consumer Confidence
5/27 2:00 ET Fed Beige Book
5/28 8:30 ET Q2 GDP 2nd guess
5/28 8:30 ET Durable Goods
5/29 8:30 ET Pers Inc and Cons Spend
5/29 8:30 ET Core Inflation
5/29 9:45 ET Chicago PMI

Key Economic Events Week of 5/18

5/18 2:00 ET Goon Bostic speech
5/19 8:30 ET Housing starts
5/19 10:00 ET CGP and Mnuchin US Senate
5/20 10:00 ET Goon Bullard speech
5/20 2:00 ET April FOMC minutes
5/21 8:30 ET Philly Fed
5/21 9:45 ET Markit flash PMIs for May
5/21 10:00 ET Goon Williams speech
5/21 1:00 ET Goon Chlamydia speech
5/21 2:30 ET Chief Goon Powell speech

Key Economic Events Week of 5/11

5/11 12:00 ET Goon Bostic speech
5/11 12:30 ET Goon Evans speech
5/12 8:30 ET CPI
5/12 9:00 ET Goon Kashnkari speech
5/12 10:00 ET Goon Quarles speech
5/12 10:00 ET Goon Harker speech
5/12 5:00 ET Goon Mester speech
5/13 8:30 ET PPI
5/13 9:00 ET Chief Goon Powell speech
5/14 8:30 ET Initial jobless claims and import prices
5/14 1:00 ET Another Goon Kashnkari speech
5/14 6:00 ET Goon Kaplan speech
5/15 8:30 ET Retail Sales and Empire State index
5/15 9:15 ET Cap Ute and Ind Prod
5/15 10:00 ET Business Inventories

Key Economic Events Week of 5/4

5/4 10:00 ET Factory Orders
5/5 8:30 ET US Trade Deficit
5/5 9:45 ET Markit Service PMI
5/5 10:00 ET ISM Sevrice PMI
5/6 8:15 ET ADP jobs report
5/7 8:30 ET Productivity
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