Saturday Stuff

300
Sat, Feb 23, 2013 - 12:28pm

Just a quick wrap up of some assorted stuff as we prepare for what will be an eventful week ahead.

First of all, the big news from late yesterday...Moody's downgraded Her Majesty's debt. Though this is once again a fundamentally gold-positive event, I wouldn't expect an immediate jump in price because of it. Remember that in the fiat world, Pound weakness inversely means Pig strength. https://www.telegraph.co.uk/finance/economics/9889485/Downgrade-to-pile-pressure-on-pound.html

In the absence of a podcast here at TFMR, please take the time to listen through all three segments of Andy's visit with Eric King yesterday (once they're finally posted). When we spoke yesterday, Andy told me not to expect anything too earth-shattering but I'm confident that it's worth your time, nonetheless. He and I plan hope to record something either Monday or Tuesday so look for that early next week. In the meantime, here are the KWN links:

https://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/2/22_Maguire_-_Stunning_225_Tons_of_Physical_Gold_Bought_By_CBs.html

https://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/2/22_Whistleblower_-_Gold_%26_Silver_Smash_Orchestrated_By_The_BIS.html

https://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/2/23_Maguire_-_Stunning_%2424_Premiums_For_Gold_In_Shanghai.html

If you haven't already, you're going to be reading a lot this weekend about yesterday's Commitment of Traders report. As you know, I like to review it right when it comes out and then post a sort of "instant analysis". Here's a c&p of my thoughts from yesterday, in case you missed them:

GOLD: For the week, price fell about $45. While this was taking place, the LargeSpecs added 1900 longs and a jaw-dropping 25,000 shorts! The LS net long ratio falls to an very bullish 2.12:1. The SmallSpecs got in on the act, too. They dumped 400 longs and added nearly 5,000 new shorts. This is an extremely bullish, contrary signal.
But the real action was by The Cartel. They added 4,300 new longs and covered an incredible 24,200 shorts. Again, who was buying while the specs were busy shorting? And who do you think will, ultimately, profit??
The Cartel net short ratio now stands at an extremely bullish 1.83:1.


SILVER: Almost identical to gold. Simply astounding, amazing and incredible.
For the reporting week, the price of silver fell about $1.60. Look what was happening internally:
The LargeSpecs dumped 1,150 longs and added 4,450 shorts. After reaching an unheard of extreme of 6.5:1 just two week ago, the LSpec net long ratio is all the way back to a mildly bullish 3.1:1
The SmallSpecs added 500 longs and 3700 shorts. Again, as in gold, the specs are racing to get short.
The "commercials"...pretty much all big firms except JPM and their con-conspirators...added another 2,026 longs, bringing their total gross long position to a never-before-seen 54,208. Simply incredible! They've continued to add longs all the way down. What do they know? What are they expecting??
The Silver Cartel...namely JPM and their two or three pals...were finally able to cover 6,800 of their disgustingly large short position. It's still disturbingly high at 92,164 but the total commercial net short ratio, which last peaked in September of last year at 2.6:1 has now declined to a quite bullish 1.7:1 Nearly every drop in The Cartel net short ratio to near 1.5:1 has preceded a substantial rally. We are very close!
All in all, both CoTs are extraordinarily bullish and indicative of a bottom very soon. Hang in there, now. Your patience will soon be rewarded!

Now, let me just add a couple of things:

  1. Getting the Gold Cartel net short ratio all the way down to 1.83:1 is a very good sign. For perspective, at the lows of late December 2011 and summer 2012, the Cartel net short ratios were 1.98:1 and 2.01:1, respectively. And this week's data was surveyed on Tuesday, before the big drop on Wednesday. All in all, the gold CoT is very bullish.
  2. Please also consider the net short ratio of The Silver Cartel. After the last four price washouts, here are your net short ratios at the bottom: On 8/14/12 it was 1.49:1. On 12/27/11 it was 1.34:1. On 10/4/11 it was 1.48:1 and on 6/28/11 it was 1.79:1. As of last Tuesday, it had fallen 1.7:1.
  3. And, finally, this theory....note the emphasis on theory. Regular readers know how perplexed I am by the silver OI situation. The primary outlier is the Commercial Long position. It "should be" somewhere near 30,000-35,000 contracts by this point in the price cycle. Instead, it grew again last week to 54,208. Chew on this: What if the 20,000 contract difference is, in fact, JPM trying to square away their naked short position that Uncle Ted estimates to be around 30,000. Now, stick with me on this... They tried to lessen it by covering back in April 2011 and the result was a near-cataclysmic event for them that was only rectified by the Sunday Night Massacre and the collusive CME margin hikes. Since then, they've maintained their position as The Big Short but, beginning late last summer, they began to build an equally-large long position. Again, stay with me here... They've added shorts through the fall to keep a lid on prices until they're ready to let it go, either voluntarily or involuntarily. If this is the case...and that's a very big IF...JPM could be approaching the point where they would be short 25,000-30,000 contracts AND long 25,000-30,000 contracts. At that point, if forced to exit the shorts, they'd be fully hedged and even profiting on the UPside.

Anyway, just chew on the 3rd point over the weekend. The more I think about it, the more it explains the "commercial long anomaly" and it provides JPM an exit strategy should the toothless CFTC ever choose to call them out.

Here are your updated charts. Given the CoT structure, I feel very comfortable declaring that a bottom is near. (And obviously hope that, by doing so, my Google ad revenue will increase.)

And just a couple of other items that have found their way into my inbox. First, this interview from last fall that details the whys and hows of gold manipulation:

Gold Market Manipulation Explained

This fun article discusses the effects of the gold repatriation movement: https://wealthcycles.com/features/15-ton-gold-repatriation-hits-jp-morga...

If you haven't read up on this subject yet, I strongly urge you to do so. Just like the German gold repatriation, we may look back on these events and recall them as clear warning signs of imminent events: https://www.sovereignman.com/important-information/red-alert-worlds-biggest-gold-storage-company-dumps-us-citizens-10958/

And our friends at Gold Bullion International do some excellent analytical work. Their latest was posted to ZH and you should definitely take the time to read it: https://www.zerohedge.com/news/2013-02-22/gold-and-potential-dollar-endgame-part-3-backwardation-and-gold

Speaking of GBI, for now they are still the only bullion and storage affiliation that this site has. Many of you have purchased from them and I am very grateful for their support. If you are buying coins and bullion, please be sure to check them out. You can link to them trough the ad on the right side of the page. I'll soon be adding affiliations with GoldMoney, SilverDoctors, Provident and JMBullion, too, so please be sure to always consider them when looking the BTFD. (Which I would strongly encourage you to consider doing this weekend.)

OK, I think I'll stop there. I hope that you have a safe and relaxing weekend. You certainly deserve some serenity after the madness of the past two weeks. But keep the faith as this, too, shall pass. The metals have simply been forced back to the bottom of their 18-month price ranges and will soon begin to rebound as physical demand and the glaringly obvious fundamentals begin to take over.

TF

p.s. You've got to check this out. The trollololo song is going mainstream!! I sure hope that the dead Russian guy's estate is getting a little skin out of it...(Thanks to my pal, DocD, for passing it along!)

Video unavailable

About the Author

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turd [at] tfmetalsreport [dot] com ()

  300 Comments

Strawboss
Feb 23, 2013 - 8:54pm

As it relates  to JPM

As it relates to JPM and their short position (assuming it is they with the gargantuan sized short), for me its easier to think of it as a 2 stage strategy to shift from being short to being long.

Stage 1 - massively increase your long position while at the same time continuing to suppress the market using shorts. During this phase your short position may continue to increase but your long position will increase faster and eventually catch up (surpass) the level of your shorts.

Stage 2 - Dump your shorts en masse by buying as others (specs) sell. Concurrently - continue to add to your longs. This combined buying pressure will turn the market positive and you will be well positioned to benefit tremendously from the upmove.

I dont think its any more complicated than that.

Time will tell if that turns out to be the case.

Of larger interest to me is what that signifies (if true). Somewhere deep in the caverns of TPTB - a decision was made that it was time to ramp the price of gold/silver to the moon.

Is it to rebalance the balance sheets of various sovereigns as Sinclair posits? Have they exhausted the amount of physical metal they were willing to part with in their attempts to string the status quo along by suppressing the metal prices? Did China/Russia accelerate their time schedule by their voracious purchases? Are TPTB alarmed by the velocity of the metal flow from West to East?

Big questions. Momentous times.

¤
Feb 23, 2013 - 8:58pm

Gold/Silver Mining

If nothing is on TV tonight...

Video unavailable
Video unavailable
Gold Buffalo
Feb 23, 2013 - 9:00pm

Dollar Rising

I think people should pay more attention to this guy. As much as I like thinking that the gold/silver will break the downtrend soon, it just doesn't look that way if you follow Erik Swarts, and when has he been wrong? Says it is the U.S. Dollar that has bottomed, not precious metals. Much more pain ahead.

https://www.marketanthropology.com/2013/02/leaving-station.html

Bugzy
Feb 23, 2013 - 9:28pm

Quicky

Was in Bullion exchange in Vancouver today buying Silver coins. Sign on wall says out of 1 ounce gold coins.

Will read posts later.

Bugzy

Tube
Feb 23, 2013 - 9:32pm

First video posted by Turd:

I was waiting for one of the German guys to get up and say,

"And now's the time on Sprockets when we dance!"

Sprockets Dance
Urban Roman
Feb 23, 2013 - 9:43pm
Doc1800
Feb 23, 2013 - 9:57pm

Has anyone ever bought from

Has anyone ever bought from Colorado Gold? How were you treated?

¤
Feb 23, 2013 - 10:06pm

Gold & Silver Bars

South African Gold Refinery
SILVER MINING / Making Doré Bars - Discovery Channel

16 to 1

sengfarmer
Feb 23, 2013 - 10:25pm

Doc1800

Yes, I made my first purchase of a green box and then several other purchases of both gold and silver from Colorado Gold.

At that time I dealt with Don. In more recent times I dealt with other family members. Always an enjoyable experience. Highly recommended.

By the way that first buy price was $6.41 including premium of 18 cents an ounce.

Beastly Stack
Feb 23, 2013 - 10:26pm

Love that VW

Commercial- that is a great one! I hope everyone is enjoying the weekend. A few more things to watch and keep a close eye on this week. PLEASE READ

https://tradermartinstake.blogspot.com/2013/02/brand-new-week-huge-event...

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