Inspired Defense

After the CNBS interview of Fed Goon Evans seemingly caught The Cartels off-guard, the coordinated response was swift and decisive.

It began this morning with this: https://www.zerohedge.com/news/2012-10-01/presenting-einsteins-definition-insanity-taxpayer-funded-suit

The reaction in the metals was almost instantaneous. Prices shot higher and were once again within a whisper of taking out critical Cartel resistance and triggering an even-more-massive short covering extravaganza. At precisely 9:00 am EDT, The Monkeys sprang into action.

The first mission was to blunt the move toward the all-important $35.50 level in silver, above which lays a tremendous amount of buy-stops. Once that was achieved and momentum halted, the real attack began and silver plunged 60c in just 4 minutes. Gold, too, was repulsed in a Gold Cartel counter-attack. After successfully holding gold under $1790 at 9:00 am and 10:00 am, the gold attack began once the London PM fix was in. Between 10:00 and 10:04, gold fell $5 but when it appeared to bottom for the third time at $1785, desperate measures were called for. An overt attack by The Forces of Darkness drove price down $12 in just two minutes at 10:39 and 10:40 EDT.

Below are 2-minute charts that show the action.

None of this should surprise anyone around here as we have been watching The Cartels aggressively defend these levels since the announcement of QE∞ nearly three weeks ago.

Despite all of this nonsense, please do not get discouraged. Gold priced in euro once again made a new all-time high today as demand to convert debasing fiat for hard assets is continuing unabated. Euro gold has led dollar gold higher this summer with a lag time of about 4-6 weeks. Just be patient and you will be rewarded. The Cartels are fighting a losing game.

Next up, The Bernank! As I type, it is 11:51 EDT, which means that The Bernank will begin a speech in Indianapolis in about 40 minutes. You can feel quite comfortable that volatility is about to ramp up again. https://www.jconline.com/article/20121001/BUSINESS05/310010023/Bernanke-address-monetary-policy-today-Indy?odyssey=tab%7Ctopnews%7Ctext%7CFRONTPAGE

Speaking of volatility, you'd better get used to it. Have you seen the latest open interest numbers? Volume and liquidity have finally returned to the metals pits and this will undoubtedly lead to more volatility in the days ahead. The Dec12 gold contract ended Thursday with a total open interest of 353,966. As recently as mid-August, the entire gold complex open interest was just 385,000! And in silver, the Dec12 has an OI of 86,972. For comparison's sake, total silver OI fell under 100,000 late last year and was as low as 102,000 as recently as February.

In terms of news items, chew on this one for a moment as it doesn't seem to be getting much media play. (https://www.zerohedge.com/news/2012-10-01/iran-rial-implodes-20-one-day-follow-death-currency-real-time) If the Iranian currency continues to implode, things could get very dicey, very quickly in the region. The mullahs and rulers of Iran could very easily begin to feel threatened by an upheaval of their own population and desperate leaders often take desperate actions in their attempts to cling to power. Watch this story very carefully all week!

Lastly, we're finally ready to conduct our first interactive webinar over at TurdTalksMetals. The first event will be on Wednesday and the guest will be James Turk of GoldMoney. I would imagine that you might have a few questions for James but you have to be a member of the site to participate. All of the details can be found by clicking here: https://www.turdtalksmetals.com/webinar-sign-up/. I sincerely hope you consider joining the site and participating in the fun.

That's all for now. The Bernank speaks in about half an hour so get ready!

TF

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Key Economic Events Week of 10/3

10/3 9:45 ET S&P Manu PMI
10/3 10:00 ET ISM Manu PMI
10/3 3:10 ET Goon Williams
10/4 10:00 ET JOLTS
10/4 10:00 ET Factory Orders
10/5 8:15 ET ADP jobs report
10/5 9:45 ET S&P Services PMI
10/5 10:00 ET ISM Services PMI
10/6 8:50 ET Goon Mester
10/7 8:30 ET BLSBS
10/7 10:00 ET Goon Williams
10/7 11:25 ET Goon Kashnkari

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