Just Some Charts

Mon, Apr 22, 2013 - 1:49pm

Because it's late and this is about all I can handle for today.

We had a little bit of a rally today but did you notice that gold was stopped in its tracks when:

  1. The Comex opened for trading and
  2. It had reached the all-important "2% cap". In fact, there was a clear movement afoot to close gold back under the 1% cap and they nearly made it.

So, now, here we are. Yes, it's always nice (and rare) to begin the week on an UP note. But don't be fooled...nothing much has been accomplished. I had expected/hoped that the drop out of the 19-month ranges would be nothing but a brief, stop-running exercise. Instead, the thing took on a life of its own last Monday and now we learn via the CoT that The Cartels didn't even cover. The LargeSpecs did. All of this infers that further weakness and volatility may be coming. Let's hope not but until prices get back into the 19-month ranges (above $1525-1550 and $26), we must remain vigilant.

And here is your homework assignment / thought experiment for the day. I want you to print off these three charts. Place the gold chart on top of the copper chart and hold it up to the light. Then, do the same with silver and copper. Having done that, let me ask you this:

Why are these charts nearly identical? Other than being elements on the periodic table, what do these metals have in common. If your list of commonalities is short, why do they trade as they do? And because they trade nearly in tandem, what does this say about the current method of price discovery?

OK, that's all. Gotta go. Have a great day!


About the Author

turd [at] tfmetalsreport [dot] com ()


Apr 22, 2013 - 2:03pm



Arguments for lower prices:

  • Gold breaking down from huge descending triangle and out of 2 year sideways zone. The old support between US$1,520.00 and US$1,540.00 is massive resistance. It will take much more time to regain this level.
  • Gold's possible downside targets:
    • Fibonacci Retracements (from last low at US$680.00 up to last top at US$1,920.00) = 50,0% @ US$1,300.00 and 61,8% @ US$1,153.00
    • Descending triangle (measuring the widest distance of the pattern and subtracting it from the support breakdown = US$1,920.00 minus US$1,535.00 = US$385.00) @ US$1,150.00
    • Sideways Zone breakdown (subtracting sideways range from the support breakdown e.g. US$1,795.00 minus US$1,525.00 = US$270.00) @ US$1,255.00
    • Support at old parabolic highs at US$1,250.00 and US$1,050.00
    • Long term uptrend support @ US$1,050.00 and US$750.00
  • Mining stocks have signaled breakdown for a long time already and still do not show any signs of a trend change
  • Movement out of Gold ETFs might just have started
  • Seasonality for precious metals now until end of July unfavorable
  • In spite of the huge sell off in precious metals COT-Data rather unchanged... (very strange!!!!!???)
  • The strong physical demand by small investors and the rising premiums during the last couple of days could also be a contrary indicator (e.g. in september 2008 we saw similar developments but final low was marked in november 2008)
  • Dr. Copper signaling a weakening global economy as Copper plunged to a 18 month low.
  • Possible sharp correction ahead for Crude Oil... a rather large Head & Shoulder pattern is in development.
  • By devaluing its own currency Japan is exporting deflation to U.S. and Europe
  • Europe sinks even deeper into recession

Arguments for higher prices:

  • Gold on all time frames strongly oversold.
  • Sentiment extremely negative
  • Massive physical demand all over the world. Premiums for physical bullion are much higher. In Hong Kong the Chinese Gold & Silver Exchange Society is out of supply and waiting for deliveries from Switzerland & London. US-Mint sold more 63.500 oz Gold in just one day. In Germany many dealers are out of stock. 10 Buyers for 1 Seller.
  • Russia again increased its Gold reserves.
  • U.S. and european central bankers want to avoid deflation and will soon start to pump more liquidity into the system again


  • The buy recommendation in my last update @ US$1,541.00 was good for a US$50.00 bounce in Gold. If you opened a trading position you should have made at least a small profit. If not, you did not use good money management (e.g. trailing stops). If you bought physical gold, you still own the exact same amount of ounces. Nevertheless, my preferred scenario did not work out.
  • In my update from March 10th I defined my worst case scenario: "3rd scenario: Gold is indeed in a bear market and will break through US$1,530.00 soon. As there might be lots of stops waiting to be triggered and as it would be the fourth test of this zone it is very likely that US$1,530.00 will not hold. Technically this would be a huge sell signal and Gold could crash down to US$1,250.00 and US$1,050.00 very fast. This would be similar to the 1970s bull market. Actually you just have to multiply the numbers by 10 and end up in today's game. In the 70ies Gold went from US$35.00 to US$195.00. From there it lost nearly 50% in two years and went down to US$105.00. Finally between 1976 and 1980 Gold went up to US$890.00. By early 1976 most of the gold bulls had been killed and were missing out the final flight to the moon. Imagine if today Gold continues to go down while the stock market is breaking out to new highs! At US$1,250.00 and US$1,050.00 everybody will have sold his gold. To whom? Yes, to the smart money and the banksters. By this, the pressure in the Gold market will be so high that Gold could easily jumped to US$8.000,00 within a couple of years."
  • As we all know, Gold broke through the 2 year support zone and crashed down to mark a short term low @ US$1,320.00. Since then, Gold has recovered more than US$85.00.
  • Scenario 3 is therefore confirmed and Gold should head even lower in the coming months. We might see a rebound towards broken support around US$1,500.00 - 1,540.00 first. But given the weakening economic situation and the looming deflationary forces we might not get there... US$1.425.00 and US$1.455,00 will be strong resistance already.
  • After the current recovery I expect US$1,250.00 to be tested in the coming months. If US$1.250.00 breaks we should be going down to even US$1,150.00 and US$1.050.00. Here we will be offered the biggest opportunity ever since I believe the bull market in precious metals is not over. I continue to believe that Gold will move to around US$8,000.00 after this correction is over.

Long term:

  • Nothing has changed
  • Precious Metals bull market. continues and is moving step by step closer to the final parabolic phase (could start in autumn 2013 & last for 2-3 years or maybe later)
  • Price target Dow Jones/Gold Ratio ca. 1:1
  • Price target Gold/Silver Ratio ca. 10:1
  • Fundamentally, Gold is still in 2nd phase of this long term bull market. 1st stage saw the miners closing their hedge books, 2nd stage is continuously presenting us news about institutions and central banks buying or repatriating gold. 3rd and finally parabolic stage will bring the distribution to small inexperienced new investors who then will be acting in blind panic.
Apr 22, 2013 - 2:05pm


I guess it has been killed now?

Being a bit cynical maybe HEH(Hot Epic Historic)smash?

Lets hope in a few months this will be all behind us.

Apr 22, 2013 - 2:12pm

More Than What Meets the Eye

There is no denying that compared to the recent past history of gold and silver prices, the present prices seem comparatively cheap. Upward movement of price from here, seems to be the only course left for price to go. Especially when considering the current retail supply shortages.

To me, something just does not add up. Nothing that I can specifically put my finger on, just call it a 'gut' feeling. When I have gone against this in the past, I have more than not come to regret it. Not this time. Holding off on pulling the trigger on gold just yet. Pulled the trigger on silver last week to a small amount and will save the rest of the dry powder for what is coming.

The vast majority are on the side of the gold bulls from here. I have a feeling that gold will fall a little more to the downside, before it gathers itself for the big upside shot.


Larry Edelson; "Gold will likely not bottom until it hits major long-term support at $1,028."

Apr 22, 2013 - 2:30pm

Silver Premiums

With the major online dealers sold out of most silver products, I thought I'd take a look at going directly to the sources: First Majestic and Great Panther, both of which have online stores and have been competitive in the past.

GPL has really jacked their premiums, asking 29.50/oz for silver. Shipping to my address in the USA is high but not over the top; total for 10oz would be $315.

First Majestic has a more reasonable premium (they want $27/oz) --- but shipping to the USA is much higher. Total for a 10oz bar would end up almost identical to the cost from GPL: 312.69.

Granted, the cost per oz might go down with a larger order, as the shipping is spread across more ounces. And these places do accept credit cards - which is a bonus. But still, I think this is an interesting illustration of the physical market responding to demand and the drop in paper spot price.

Prize Fighter
Apr 22, 2013 - 2:33pm

deleted out of respect.  Not

deleted out of respect. Not my place. Apologies to leaving my hat tippers hangin but after reading Turd's other thread, I'm feeling him and it is tough all over right now.

Dagney Taggart
Apr 22, 2013 - 3:32pm

From My Dad at Lunch today: Cheer Up, Turdites!

Life is Perfect!

The Maine was remembered

The international bankers were acting in nothing but an honorable manner when they met to plan the Federal Reserve Act in secret

Lyman Lemnitzer was only kidding when he penned Operation Northwoods

The Israelis thought it was a joke that a US flag was flying on the USS Liberty

Oil Companies have never had any interest in the Mekong Delta

Since all buildings naturally fall into their own footprints, there is no need for planning demolitions in Las Vegas

Insider trading before a tragedy is nothing but luck

Saudis, Iraqis, Afghanis: they’re all the same

Andrew Maguire is a victim of his own clumsiness

Paper gold is physical gold

Bart is a hardcore prudent detective

Everybody who gets both legs blown off is left smiling immediately afterward

Beastly Stack
Apr 22, 2013 - 3:38pm

For those interested

In trading, from the weekend and a look at the currency markets.


Texas Sandman
Apr 22, 2013 - 4:32pm


Liberty claims to have them available at their Del Mar store and is selling for $5 above spot, which is about the best I've seen lately. I think APMEX wants spot+7 (and they won't be available for a week!).

Of course, whether you will actually receive the coins in a timely fashion, who knows...

Apr 22, 2013 - 4:50pm

Don't just do something - stand there…

…which is what I wish I'd done.

For me, the price of PM's isn't the issue.

It's the G/S ratio, which is sucking big time.

When PM's go down, silver gets hit the worst. When they rise, silver gets the short end of the stick. Even though it rose in value somewhat today, gold rose more, so the G/S ratio continues to tank.

I used to have some gold - lovely to look at and impressive to hold. Then I kept reading how silver was going to skyrocket and, being somewhat ignorant and easily influenced, and, seeing as how the evidence was out there at that time that, indeed, silver DID seem to be gathering steam while gold languished, I, over the course of about a year, ended up trading all (yes, choke, ALL) my gold for silver at G/S ratios of 58, down to 42.

Had I done NOTHING at all, I'd be in better shape, now in terms of value in FRN's. Yes, I know we're supposed to measure our stack in terms of ounces, not value in FRN's, but how can somebody not come to the conclusion that had they done nothing at all they'd be better off?

I've been waiting since late 2011 for the G/S ratio to get back to some semblance of historical normalcy so I can return to a more balanced stack, but the longer I wait, the more out-of-whack the G/S ratio gets.

If I were to trade back into gold now, I'd have fewer ounces than I did when I went into silver in the first place, and that's not even counting premiums!

I'm waiting this out - surely the ratio can't stay THIS whacky for long, but what do I know? A year from now I may regret not having traded back into gold now when my losses would only be somewhat modest.

Sure wish I could find whoever is responsible for the crappy G/S ratio and put them on some horrible amusement park ride for a couple of weeks.

Apr 22, 2013 - 4:50pm

a time for optimism

As a long term hoarder/PM miner buy and holder I am far more positive than Turd today. Study the price surpression using EU gold sales in 2004, 2006 and 2008 and notice how the market responded.

1)The price was beat down 25% from peak

2)Indian citizens and other hoarders bought up every piece of metal that wasn't nailed down.

3)The price on the paper markets then rose to 1.5 times the previous peak.

I have been waiting a long time (5 years) for this setup to return and predict no force majeure but rather a run to

1900*1.5=$2850 in the near future as our next leg up. If this does not happen within 12 months my very patient wife (our entire nest egg tied up at 50% of peak value) is going to lose faith and demand I sell out use it to pay off our mortgage.....

Subscribe or login to read all comments.


Donate Shop

Get Your Subscriber Benefits

Private iTunes feed for all TF Metals Report podcasts, and access to Vault member forum discussions!

Key Economic Events Week of 8/19

8/21 10:00 ET Existing home sales
8/21 2:00 ET July FOMC minutes
8/22 9:45 ET Markit Manu and Svc PMIs
8/22 Jackson Holedown begins
8/23 10:00 ET Chief Goon Powell speaks

Key Economic Events Week of 8/12

8/13 8:30 ET Consumer Price Index
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Labor Costs
8/14 8:30 ET Philly Fed
8/14 9:15 ET Ind Prod and Cap Ute
8/14 10:00 ET Business Inventories
8/15 8:30 ET Housing Starts & Bldg Permits

Key Economic Events Week of 8/5

8/5 9:45 ET Markit services PMI
8/5 10:00 ET ISM services PMI
8/6 10:00 ET Job Openings
8/8 10:00 ET Wholesale Inventories
8/9 8:30 ET Producer Price Index

Key Economic Events Week of 7/29

7/30 8:30 ET Personal Inc/Spending & Core Inflation
7/30 10:00 ET Consumer Confidence
7/31 8:15 ET ADP employment
7/31 2:00 pm ET FOMC Fedlines
7/31 2:30 pm ET CGP presser
8/1 9:45 ET Markit Manu PMI
8/1 10:00 ET ISM Manu PMI
8/2 8:30 ET BLSBS
8/2 10:00 ET Factory Orders

Key Economic Events Week of 7/22

7/23 10:00 ET Existing home sales
7/23 10:00 ET Richmond Fed Manu Idx
7/24 9:45 ET flash Markit PMIs
7/25 8:00 ET Count Draghi/ECB policy meeting
7/25 8:30 ET Durable Goods
7/25 8:30 ET Wholesale Inventories
7/26 8:30 ET Q2 GDP first guess

Key Economic Events Week of 7/15

7/15 8:30 ET Empire State Fed Index
7/16 8:30 ET Retail Sales and Import Price Index
7/16 9:15 ET Cap Ute and Ind Prod
7/16 10:00 ET Business Inventories
7/17 8:30 ET Housing Starts and Building Permits
7/18 8:30 ET Philly Fed
7/19 10:00 ET Consumer Sentiment

Key Economic Events Week of 7/8

7/9 8:45 ET Fed Stress Conference, three Goon speeches
7/10 8:30 ET CGP Hump-Hawk prepared remarks
7/10 10:00 ET CGP Hump-Hawk House
7/10 10:00 ET Wholesale Inventories
7/10 2:00 ET June FOMC minutes
7/11 8:30 ET CPI
7/11 10:00 ET CGP Hump-Hawk Senate
7/11 12:30 ET Goon Williams
7/12 8:30 ET PPI

Key Economic Events Week of 7/1

7/1 9:45 ET Markit Manu PMI
7/1 10:00 ET ISM Manu PMI
7/1 10:00 ET Construction Spending
7/2 6:35 ET Goon Williams
7/3 8:15 ET ADP June employment
7/3 8:30 ET Trade Deficit
7/3 9:45 ET Markit Services PMI
7/3 10:00 ET ISM Services PMI
7/3 10:00 ET Factory Orders
7/4 US Market Holiday
7/5 8:30 ET BLSBS

Key Economic Events Week of 6/24

6/25 10:00 ET New Home Sales
6/25 1:00 pm ET Chief Goon Powell
6/25 5:30 pm ET Goon Bullard
6/26 8:30 ET Durable Goods
6/27 8:30 ET Q1 GDP final guess
6/28 8:30 ET Personal Income and Consumer Spending
6/28 8:30 ET Core Inflation
6/28 9:45 ET Chicago PMI

Key Economic Events Week of 6/17

6/18 8:30 ET Housing Starts and Building Permits
6/19 2:00 ET FOMC Fedlines
6/19 2:30 ET CGP presser
6/20 8:30 ET Philly Fed
6/21 9:45 ET Markit flash June PMIs

Recent Comments

by It'stheBankers, Aug 24, 2019 - 10:04pm
by jack3617, Aug 24, 2019 - 9:04pm
by Marcus, Aug 24, 2019 - 8:58pm
by mavens, Aug 24, 2019 - 7:15pm