The week is finally rolling. Don't let this morning's downward action mislead you, though.
There were a couple of things working against us this morning. First, the rally in The Pig from yesterday provided cover to again enforce the hard caps at $1730 and $32.60. After the way the metals closed last week, the shorts are desperate to regain momentum to the downside and forestall any squeeze. Additionally, after the rally of last week, the Cartels are attempting to "paint" the CoT, which will be surveyed this afternoon. Taken together, you get a plunge in price all the way to $1718 in gold and $32.10 in silver.
So it is time to re-iterate this: Do not be dismayed. Today's weakness, like almost every other down day, should be used to accumulate even more physical.
2013 is going to be an extraordinary year for the metals. By this time next year, we will be looking back at the price levels and wondering just what in the heck we were doing by not literally running to the LCS every day and draining their inventory. I expect 2013 to be the year when The Great Bullion Bank Charade finally comes crashing down and, once the true extent of the fraud is acknowledged, the value of physical metal will skyrocket. Until that day comes, let the cruel and selfish manipulators continue to play their games. In doing so, they simply continue to sow the seeds of their own demise. You and I will simply remain patient and continue stacking physical metal at deeply discounted prices.
Here are a couple of updated charts to chew on. On these 8-hour charts, you can plainly see the Cartel defense lines as well as the general, rising trend from the bottoms identified about three weeks ago.
And have you seen the open interest numbers from Friday yet? Pretty interesting! Total gold OI surged over 2%, about 9,000 contracts, to about 462,000. Though still about 30,000 lower than the price and OI peak of 10/4, this is quite a jump nonetheless and part of a total rise of 20,000 in the past four days, alone. This is a clear sign of a momentum turn as price has been rallying, too.
The silver OI is even more interesting. It jumped about 1,000 on Friday and now rests at 142,611. This level is second only to the 143,056 seen on 10/12 as the highest levels of 2012. Again, with price rising over $1.50 from Tue-Fri of last week, this is clearly significant, new interest entering on the long side. Hmmmmm. What does that tell you? Are these new longs about to be fleeced or are they preparing for a big move UP? Hard to say for sure but one thing is certain, the older longs seem resolute and these new longs are already up on the trade. Both groups will therefore be quite tough to shake out on any forced declines like we saw earlier this morning.
And did you see this story over the weekend? https://www.zerohedge.com/news/2012-11-11/chinese-gold-imports-surge-september-ytd-total-surpasses-official-indian-holdings. China is on pace to import over 800 metric tonnes of gold this year alone. 800 tonnes is more than the entire accumulated inventory of India! And that's just what they "officially" declare!! The true number is almost certainly far more than 800. What does this mean? It is also time to re-iterate this: One day soon, the Chinese will offer a new, gold-backed renminbi/yuan as an international alternative to the current U.S. dollar global trade settlement system. In conjunction, where London was the global base of bullion trading for the 19th and 20th centuries, Hong Kong will assume that role in the 21st Century. Period. End of story. Fait accompli.
So, please continue to prepare for next year and beyond. As I close, I see that the metals have rebounded sharply in the hour or so it has taken me to type this up. Good. This makes Turd happy. I hope you're happy, too. Have a great day.
2:15 pm EST UPDATE:
Today you witnessed a classic example of two Cartel tricks. One, volatility brought about by obvious CoT painting and, two, clear price capping to protect buy-stops from being overrun.
First, the capping. This has been an ongoing project for three weeks but it has been particularly nauseating since Friday. All of the action yesterday, in the extremely light volume environment, was dedicated to moving price back below the $1730 and $32.60 caps. The CoT-based volatility today briefly eclipsed those levels again and was not allowed to stand. Like a desperate, dying fighter...The. Caps. Must. Hold.
And now check out the closes today on these 1-minute charts. Believe it or not, I actually think this is a good sign and a positive. Remember, when The Cartel decides to "paint" the CoT, it does so with the intention of "wrong-footing" the analysts when the report is finally released 72 hours later. A bank will sell or buy into the Tuesday close in an effort to give a false impression of their actual positions. By selling into the close, someone/something was clearly attempting to minimize their reported long exposure. Why? Most likely that entity is bullish and does not want the full extent of that bullishness reflected on this week's CoT. With this in mind, check out the prices dumps that concluded exactly at the Comes close of each metal.
At any rate and regardless of the caps. today's action leaves me very optimistic regarding the remainder of this week. Long and strong.