Wrapping 2012

632
Sat, Dec 29, 2012 - 12:53pm

2012 is nearly over and it feels like it has been a tough and lousy year. And it has. But has it been that bad? Could it have been a lot worse? Damn straight it could have been.

As we entered 2012, silver had bounced off of $26 but was still only trading near $28. Gold had touched $1550 and was near $1570. There was no current, overt quantitative easing program, only Operation Twist, and we were just beginning an election year with all of the attendant MOPE and SPIN regarding an economic recovery. Things looked pretty darn bleak.

Of course, we know what happened next. The metals rallied through January and February. They swooned until August and then rallied again into October before being beaten back again. It was all painful to watch and very little fun to write about...BUT...the metals have eked out a gain this year. Gold is UP nearly $100 and silver is up $2 or about 7% each. Again, I'm not trying to slather lipstick on the proverbial pig here but...given all of the things we faced in 2012...that's not too shabby and, as we head into 2013, the situation looks almost entirely different.

The U.S. economy is dragging along the bottom. The U.S federal deficit and debt are growing hopelessly out of control and the country's credit rating is poised to be downgraded again sometime very soon. Global central banks are accumulating physical metal at an increasing pace and the Federal Reserve is openly printing $85B/month. My point is: If the metals can survive 2012 with all of the headwinds, how might they trade in 2013 with the wind at their back?

Exactly.

Yesterday's CoT showed a continuation of spec long liquidation in gold and the silver specs finally gave up, too. For the week, gold was only down $12 yet the specs shed over 14,400 net longs, which allowed the Gold Cartel to cover another 14,400 net shorts. But silver fell almost $2, with most of the damage coming on the successive days of 12/19 and 12/20. The specs responded by dumping almost 8,400 gross longs. Apparently the pain became too extreme to hold on any longer.

So, as we head into 2013, here is a CoT snaphot. The large specs are long a gross total of 200,436 contracts. The Cartel is short a gross total of 327,413 and the Cartel net short ratio is 2.34:1. As we entered 2012, the large specs were long 167,413 but The Cartel was short a nearly identical 326,454 with a net short ratio of 1.95:1.

The silver picture, once again, is more intriguing. Ponder these numbers:

DATE PRICE LARGE SPEC LONG CARTEL LONG CARTEL SHORT CARTEL RATIO

12/27/11 $28 24,026 41,224 55,356 1.34:1

2/28/12 $35 38,012 33,802 78,395 2.32:1

8/14/12 $28 32,317 47,797 71,199 1.49:1

10/2/12 $35 47,236 35,788 93628 2.62:1

12/24/12 $30 39,620 44,302 91,010 2.05:1

A couple of things that jump out at me:

  • The Cartel gross short position has risen by 64% since over the past twelve months.
  • The Large Spec gross long position is also up 64% over the past twelve months.
  • The Cartel gross long position is nearly back to levels which have twice indicated price bottoms in the past.
  • The current Cartel net short ratio could be considered "neutral" at 2.05:1.

Finally, just a few words about price. The charts don't look too hot so don't be surprised by some further weakness in the short term. This would undoubtedly inspire even more long liquidation which would "improve" the CoT structure even more. But, as noted above, the fundamentals for 2013 are vastly better than 2012 AND this whole "fiscal cliff" nonsense will only serve to make them even more positive. Therefore, hang in there and buy the dip. Take delivery and add to your stack. Trust your instincts and be ruled by logic, not emotion. Look around and prepare accordingly.

TF

About the Author

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turd [at] tfmetalsreport [dot] com ()

  632 Comments

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Zoltan
Dec 31, 2012 - 9:27pm

Thanks Horse Good Point

Mounted any unicorns lately?

Z

StevenBHorse
Dec 31, 2012 - 9:24pm

For the Gabillionth time

Stop using Shitco.

I'm specifically speaking to you Zoltan.

DollarMenu2
Dec 31, 2012 - 9:19pm

Kitco charts...

FWIW, I don't know much about charts, but I do know that when I see the anomalies posted at various times using KITCO charts, and I go to the place I use for charts, I can't see them.

LINK: https://goldprice.org/spot-gold.html

I looked for the $11.50 drop someone mentioned, and it's not here.

With all the well deserved animosity toward KITCO's Nadler, why do folks still use their site?

Are they providers of accurate information in spite of their seeming hatred toward PM's?

Just asking.

thurd aye
Dec 31, 2012 - 9:10pm

Middle of night here,site

Middle of night here,site offline for Yonks.

Happy New Year all you Turdites and ,of course ,to Major Turd and families of you all.

Thurd Aye . :O)) back to kip.

MUDbone
Dec 31, 2012 - 9:07pm

For the Newfoundlanders

I'se The B'y - Great Big Sea - Lyrics ,
Zoltan
Dec 31, 2012 - 8:59pm

Price Drops or Not

Kitco gold shows 1664 above the chart which also shows on the chart. Net Dania doesn't show the drop though (1675). Silver 30.35 on Kitco and 30.10 on ND.

Not sure how it drops when the market isn't trading. This has happened before. Just in case anyone still believes that we have fair and transparent markets (we don't). As far as a Comex default, they stopped settling in physical a couple years ago so in my mind they have been in default since then.

Happy New Year to all my fellow Turdites. If you can't stay up for your local New Years then Newfoundland welcomes the New Year in an hour and a half. Have a toast then and get a good nights sleep. No use starting out your new year tired and crabby.

Z

ballyale
Dec 31, 2012 - 8:56pm

Kitco can't make up their mind. Best Kitco article of 2012.

It came right on time as well, as it pretty much summed up the PM market, both phyzz and equities to a tee for all of 2012.

https://www.kitco.com/reports/KitcoNews20121231JW_pm.html

P.M. Kitco Metals Roundup: Gold Rallies Sharply on Apparent U.S. Fiscal Cliff Deal, Which Boosts Risk Appetite.

Short covering, bargain hunting and even some fresh safe-haven demand early in the day were featured in the gold market.

In other words, they're analysis is like pulling petals off a daisy. "She loves me; she loves me not ....

This should be the title for Turd's Year End Review, imo.

P.S. One thing we've got an answer to this year is Judy Collins's song: "Where are the Clowns?"

The answer is they are all over the Big Tent, aka the political and financial Clowns that be. "Come right on in. See the death defying US politicians do their balancing act with the deficit without a net, 17 Trillion Dollars high. Watch how the IRA steals your money right before your eyes even after you've been admitted for a nominal fee. Hurry, hurry, hurry, watch while the Fed takes all your $10 and $20 Dollar bills and reduces their purchasing power each and every time you enter this roach motel Big Tent on April 15 of every year. As an additional bonus we have added more and more Home Land Security forces and "waiting areas"and more and personal searches and metal detectors for your protection.

Don't worry. No one will get hurt as long as you enjoy the show and you pay your admission, like it or not, and enjoy the magical tricks we will perform on your wallets. Besides, we've got you surrounded for your protection.

If this sounds like wounded knee, somewhat, it is, and they, the EE want to put all of us on the reservation. We reap, what we sow. We the people have now become the "Native Americans." We the people are now the enemy of the State and the Global EE and from their perspective and ambitions, now we need to be pacified and controlled. It's their next step. We the people are now the first impedimenta toward the Global EE realization of total Global political, financial and military control of the world. Control the West and its population, then Russian and then China.

The only direct evidence of this seemingly absurd tin hat conspiracy is everything that has happened since the JFK EE murder. We all know the rest and all the cover ups. Why does no one ever connect the dots or even admit to the cover ups in our supposed open, now secret Gov't.?

Answer: They are all part of it and have been suborned or intimidated or both.

And oh yeah! Happy New Year.

Bally.

AnonymousGeorge Clooney
Dec 31, 2012 - 8:50pm

Removed comment

Removed comment.

Anonymous
Dec 31, 2012 - 8:44pm

Removed comment

Removed comment.

Silvergunn
Dec 31, 2012 - 8:20pm

Colloidal Silver info

Happy New Year everyone!!!

Regarding Colloidal Silver, these are the things to think about, even if you don't buy this generator/make one of your own... https://www.atlasnova.com/ (then click the "CS Making Info" tab in the top-right) it states 5-10 ppm makes a quality solution and Katie Rose said 22 ppm is where the ASAP solution is, so make what works for you (Note how a volt meter and a resister is used to maintain standardization, maybe adapt this with the DC plug-in? they say 27 dc volts is to low and 36 dc volts is to high for optimal)

Here is an article on the differences between Ionic and Colloidal Silver: https://www.thelightofdayradioshow.com/archives/RBN-BACKUP/May-2012/REVI...

And of course Beinki's thread here https://www.tfmetalsreport.com/forum/4191/beinki-colloidal-silvershare-y...

And heat can speed the reaction by using a double-boiler on simmer, just a thought.

I prefer the labeled .9999 Maples, two will last a life time for personal use!!!

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