Wrapping 2012

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?


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:


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.


About the Author

turd [at] tfmetalsreport [dot] com ()


Dec 30, 2012 - 5:17pm

Colloidal silver- Bollocks

I have one of these with 18v output I don't use

So now do I cut off the small end and attach each wire to a silver coin/bar, hang in a jar of distilled h20 and plug in? Is it that simple?

Peoples Front of Judea
Dec 30, 2012 - 5:20pm

Re Collodial silver

My wife has been making it for 6 months using two Canadian maples

obviously this is putting a matt finish on the coins .So i would like to use the same grade silver wire but its just not available in the UK. Can anyone point me towards a good supplier of wire i only need about 12 inches of it though.

Our generator which is 9v runs almost all day as we go through about 2 gallons a week of the stuff...thanks

Dec 30, 2012 - 5:25pm

"....unless governments somehow regain their senses !"

Excalibur .... it's statements like that .... that make me think like a Socialist .... and want to put limits on participation in this blog and other things ! Limits: TFMR .... 5 English Socialists ! MSM .... 0 Piers Morgans ! Life in general .... 5 Monedasses ! Monedas 1929 Comedy Jihad You Should Be So Lucky To Find 2 Monedasses World Tour

Dec 30, 2012 - 5:37pm

@ MUDbone @andiejo1

MUDbone - yes, just cut off the adaptor at the end, pull the two wires apart, strip them back enough to expose the wire underneath and attach to crocodile clips which you then attach to the coins (of course). Don't let the crocodile clips touch the water. Only the coins under where the clips are attached, go in the water.

andiejo1 - the silver will go matt, actually completely black (if you're doing it right) over the 10 hours or so if you're using a 12v power source. When you're done use a scourer to clean off the black deposits (I guess you're already doing that?) and clean with alcohol, then distilled water.

The matt finish can then be polished if you want to restore the coins, but this is pointless if you want to continue to use them to make colloidal silver. The matt finish simply means that silver has been removed (via electrolysis) from the surface of the coin into the water - which is exactly what you want it to do. The coins, or whatever silver you use, will always end up matt.

treefrogPeoples Front of Judea
Dec 30, 2012 - 5:38pm


rio grande has sterling and 999 fine silver in a variety of shapes and sizes.


for these applications, i think 30 ga. strips six inches by one inch in 999 fine would be optimal.

Dec 30, 2012 - 5:41pm

Removed comment

Removed comment.

UK SilverstackersPeoples Front of Judea
Dec 30, 2012 - 5:41pm

andiejoe1 - Wire supplier

Try https://www.cooksongold.com

You'll probably have to email them to clarify what grade their "fine silver" is.

Although it show price per kg, you should be able to order 300mm of the thicker stuff.

Dec 30, 2012 - 5:44pm

@Silverbee You probably heard


You probably heard that from some Freegold person. It is an outright lie. By their logic, any central bank that owns gold puts out a gold backed currency. Ludicrous.

Dec 30, 2012 - 5:49pm

How falling over fiscal cliff

How falling over fiscal cliff will delay debt ceiling negotiations- from ZeroHedge:

Hence the potential of PM sideways/down trading well into H1 2013.

Dec 30, 2012 - 5:49pm

Thx Bollocks

According to this article on plating, one only needs to connect the positive wire to the silver (anode) and attach the negative wire to something else (copper?) so as not to ruin 2 silver coins. What do you think of this?

Attach an alligator clip to one end of each wire. Connect the other end of each wire to the battery. Identify the wire leading to the battery's negative terminal and clip the alligator clip onto the item being plated before lowering it into the solution. This is called the cathode. Attach the positively charged wire to your source material and place it into the solution. This is called the anode.

When both the anode and cathode are connected to the battery and submerged in the solution, an electric circuit is formed. The circuit will cause atoms from the positively charged source to be attracted by the negatively charged cathode, creating a plating bond with the materials. Be prepared to wait several days for the process to finish, depending on the strength of your battery and the density of the metal being used to create a plate.

Read more: DIY Electroplating | eHow.com https://www.ehow.com/way_5401669_diy-electroplating.html#ixzz2GZuqnHIb

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