Looking Back and Looking Ahead

582
Fri, May 3, 2013 - 4:38pm

As we wrap this week and prepare for the next, let's review the charts and the CoT.

First, the Commitment of Traders report. It just came out ten minutes ago and here are my initial thoughts. Keep in mind a couple of things:

  1. For the reporting week, gold was UP $62 and its OI was also higher by 6,000 contracts
  2. Silver was also UP. It rose $1.36 but its OI fell by 15,500 or nearly 10%
  3. The silver OI drop was almost entirely due to May contract expiration and First Notice Day, which happened at the exact same time as the CoT survey, at the Comex close back on Tuesday
  4. After the survey, open interest rebounded on Wednesday and Thursday. Gold was down a 2-day total of $4.50 yet its OI rose by 8,000 contracts and silver 35¢ on an OI rise of 1,400.

GOLD

Continuing the trend, The Specs sold and The Cartel bought. For the week, the Large Specs dumped 3,900 longs and added 3,300 new shorts and the Small Specs are now NET SHORT by nearly 1,500 contracts after they dumped 2,400 longs while covering 800 shorts. Think about that for a moment....the most out-of-touch, ultimate-outsider group the Small Specs, are now NET SHORT. At $1450. For perspective, near the price peak on 8/16/11 the Small Specs were long 70,510 and short 21,749 for a net long ratio of 3.24:1. As of three days ago, they were long just 37,451 and short 38,940 for a net long ratio of 0.96:1. (As an aside, you should really go back and look at that entire CoT report from Harvey's archives. Marvel at the difference in positioning between then and now. https://harveyorgan.blogspot.com/2011_08_14_archive.html

To no surprise, The Gold Cartel utilized all of this Spec selling to reduce their net short position by 8,800 contracts. Last week, though they added 5,255 new shorts, they also added 14,080 longs. This brings their net short ratio all the way down to just 1.56:1. Again, for the sake of comparison, look at that CoT from 8/16/11. At $1900 gold, The Cartel was long just 160,562 and short 409,409 for a net short ratio of 2.55:1.

Digging deeper, what's the big difference between then and now? On 8/16/11, The Gold Cartel was long 160,562. Back on Tuesday, they were long 170,211. However, back in August of 2011 they were short 409,409 and as of last Tuesday they were short just 265,774. Instead of letting gold get away from them when it suddenly became the only currency alternative to fiat, The Cartel moved to aggressively smash price, an operation that continues to this day. In doing so, they've been able to reduce their net short position by 153,284 contracts or 61.6%! Or looked at another way, they've been able to reduce their paper-physical liability by 15,328,400 ounces or 477 metric tonnes!

SILVER

Again, May13 contract expiration has distorted this report, regardless it's still quite interesting. Last week, the Large Specs dumped another 3,100 longs while covering just 300 shorts. This brings their net long ratio back down to just 1.52:1. The silver Small Specs were net neutral for the week are are still just barely net long.

The commercials in silver who have been taking on JPM in The Civil War actually dumped some longs last week into expiration. Their gross long position fell by 2,573 to 65,685. JPM et al seized upon the Large Spec and Comm selling and covered 5,507 shorts, down to 79,915. This lowers The Silver Cartel net short ratio all the way down to an incredible 1.22:1.

For perspective, let's once again review the CoT from 8/16/11, when silver was trading near $41.

  • Large Spec longs 8/16/11 = 32,697. Last Tuesday = 35,720
  • Large Spec shorts 8/16/11 = 10,769. Last Tuesday = 23,530
  • Large Spec net long ratio 8/16/11 = 3.06:1. Last Tuesday 1.52.1.
  • Comm Longs 8/16/11 = 34,555. Last Tuesday = 65,685
  • Comm Shorts 8/16/11 = 75,236. Last Tuesday = 79,915
  • Cartel net short ratio 8/16/11 = 2.18:1. Last Tuesday = 1.22:1.

Well, what stands out at you? Note that the Large Spec long and Cartel short positions are nearly unchanged over 20 months and a $17 drop in price. Then note the HUGE change in the Large Spec short and Commercial long positions. Also notice the difference between the commercial silver activity and the commercial gold activity. In gold over the exact same time period, the Comm long position is nearly unchanged. However, the silver Comm long position has nearly doubled!

Now I suppose we could really drill down into this and try to discern, by firm, how positions have changed. That's a topic for another day. For today, just think of this:

I laid out for you yesterday all of the many events that have occurred while gold has declined by $500. In summary, I concluded that late August of 2011 was a seminal period of time for the Forces of Darkness. They saw the collapse of confidence in every single fiat currency and the decision was made to attack gold and silver as they had become the only, true alternative to paper. This plan of action continues to this day. By containing gold and silver for the past 20 months, The Cartels have:

  • Reduced their net short position in gold by 153,284 contracts. This equates to 15,328,400 troy ounces of gold or roughly 477 metric tonnes.
  • Reduced their net short exposure in silver by 26,449 contracts or 132,245,000 ounces of silver or 4,113 metric tonnes.

As we head into next week, we should all feel pretty good about surviving this past one. Things looked pretty lousy back on Wednesday but we've since recovered and the charts don't look too bad. Now if we can just get a shove...and burst through resistance at $1485 and $24.80, we could quickly move right back to $1525 and $26 and be poised for an epic battle, fighting to move back into the 1525-1800 and 26-36 price ranges that had contained the metals since the August 2011 attack plan began.

OK, time to call it a week. Ole Turd's got a frosty beer waiting for him and I'm not sure if I can wait much longer. If I wrap up now, I might also be able to catch the Kentucky Oaks. By the way, I haven't studied the form yet but, from what I've seen, I like Normandy Invasion in The Derby tomorrow.

Have a great weekend!

TF

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  582 Comments

Zoltan · May 5, 2013 - 10:44pm

@Monedas

Don't be fooled Brother. 5K an ounce?, maybe a few but not unless the wolf is at the door. Wolves make nice fur coats, 7.62x39.

Z

Texas Sandman · May 5, 2013 - 10:46pm

$5K/oz is cheap

I'll be interested in selling my gold & buying stocks only when the dow trades beneath the price of gold. Then I'll start thinking about it.

Until then, there is much danger in the stock market and much safety in PMs.

Zoltan · May 5, 2013 - 10:57pm

One Hundred Million NDU (April Monthly)

That's a lot (Ruprecht).

Ounces, Trades, Contracts? Who cares.

I call Bull Shit.

Z

Texas Sandman · May 5, 2013 - 11:02pm

@southerncross

While I agree the EE has to worry about invalidating the crimex if they drop prices much more (not to mention the paper price of silver is close to the true cost of production --- so mines will start closing if they drop it to say $20), perhaps they can hope physical demand will dwindle here if they just hold the price in a range below the $1526/$26 breakdown for a period as they cover shorts opportunistically.

In general, I agree the cartel is looking at the possibility of losing much of their inventory at the crimex with a further price drop. In fact the number standing for delivery at present is rather large & growing as regards may silver. Maybe they can offer a cash premium to get those pesky people standing to go away. However, if those are industrial users say standing to get bullion to supply retail, etc., maybe the premiums they would have to offer would be quite large indeed.

Southern Cross · May 5, 2013 - 11:02pm

Relax Bugs

I believe physical demand will dictate the level of manipulation. Paper markets can not allow the price to fall very far while demand remains high. I believe right now the spread has to remain tight or even allowed to rise above $1500 for gold to lower the physical demand. The paper thugs are walking a tight rope. Any increase in physical demand and the paper market quickly implodes. The paper players have deep deep pockets but what they don't have is unlimited sellers of physical gold and silver. This is where the crack grows. Just my opinion.

There's no reason to fear big drops right now unless demand for physical drops off substantially. 

Mr. Fix · May 5, 2013 - 11:06pm

This could be the diversion that the Evil Empire needs.

WHAT WOULD WAR BETWEEN ISRAEL AND SYRIA DO TO THE ALREADY FRAGILE GLOBAL ECONOMY?

MAY 5, 2013 BY THE DOC 5 COMMENTS

War is a horrible thing. Just ask anyone that has ever been in the middle of it. And in this day and age governments around the world possess weapons of such incalculable power that war should be unthinkable. In future wars, we could literally see millions of people killedon a single day. Nobody should want that or look forward to that. Unfortunately, the next major regional war in the Middle East appears to be closer than ever. But nobody should want it to actually happen.  During the next major regional war in the Middle East we will likely see death on a scale that is unprecedented. It won’t be like the wars of 1967 or 1973.  It will likely be a fight to the death where nothing is held back. You see, the truth is that most Americans have no idea what is really going on in the Middle East. There are ancient grudges and ancient hatreds that go back for thousands of years. There is no “peace plan” that is going to suddenly make everything okay. The Middle East is a simmering volcano of hate and resentment that could erupt at any moment. [Read more...]

ReachWest · May 5, 2013 - 11:15pm

Geographic Ecstacy

Life is good - Turdville is not anywhere near Syria or Israel or the MENA Area (I hope).

Thank-you Turdville for an entertaining and informative weekend.

kingboo · May 5, 2013 - 11:23pm

Google Trends.....a few observations

I like to peek at Google Trends from time to time..... i always thought it was a decent indicator of what people were paying attention to...... but after studying some trends for an hour or so, i came to a different conclusion..... in fact, it's actually pretty eye-opening...... It would seem that google trends is a great tool if you want to measure "news saturation"..... and by that i mean the following: The general populous cannot start a trend on Google large enough to measure BEFORE the MSM create a large enough buzz about any given topic to drive the populous to search further on Google.......which then starts the Google search trend....... I was measuring "gold price" on Google trends when i realized that it was a very hot search in U.S....Moscow...India....Shanghai...Hong Kong....during April of this year.... but not so much in Italy.... hmmm? I sat back in my chair wondering "why doesn't Italy care about the price of gold like all these other countries? I could only come to one conclusion: lack of media coverage... So that begs the next question, which is this: Do all these countries just have better media coverage with more transparency than Italy? (no) or do we see only what the MSM wants us to see........ in other words, the news is only and EXACTLY what they want us to see, read...and react to..... whereas in Italy, this particular issue (of the gold price crash) was not something the PTB wanted or felt needed to be front page news......for whatever reason, the message wasn't necessary in Italy ...Hence the low search rating on Google trends for "gold price"......... And just because the price of gold dropped at a historic rate...does not justify a "breakout" on google trends...... no, breakouts are reserved for "mainstream" events....you know, like Justin Beaber...... so when you see "gold price" breakout on Google trends....it's because they splashed the news across enough front pages and tv crawls to get EVERYONE'S attention....... now why would that be such an important message to get through to everyone? hmmm?......i guess i'll have to think that through.... 

or maybe i'm just rambling.....

kingboo · May 5, 2013 - 11:27pm

oh, and another thing

Happy Sinko de Mayonaise....... it means mayonnaise in the sink....or mayonnaise from the sink.. something like that. I just know you're supposed to drink beer today....

Hagarth · May 5, 2013 - 11:30pm

@kingboo Talk of Austerity/Gold

  • May 2, 2013, 5:58 a.m. ET

WGC: Gold-Backed Bonds an Alternative to Italian Austerity

By Laura Clarke

Gold-backed sovereign debt presents a good opportunity for Italy and other states facing significant financial challenges to regain the confidence of bond markets and lower funding costs, the World Gold Council said Thursday.

Gold-backed bonds are underpinned by gold collateral. This could be bonds partially backed by gold, or a tranche-based structure developed to appeal to different types of investors.

The WGC, which is funded by mining companies, said that unlike monetary interventions which can involve complex chains of causality and potential unintended consequences, using gold as collateral can be simple, direct and transparent.

The WGC added that such a strategy would be a more remedial answer for these nations than outright gold reserve sales, a strategy that has been discussed by Cypriot authorities. Concerns regarding this potential strategy helped send gold prices plummeting to a two-year low mid-April.

Italy received a $2 billion bailout from the German Bundesbank in 1974 when it put up its gold as collateral. Most recently, in 1991 India used its gold as collateral for a loan with the Bank of Japan and others.

https://online.wsj.com/article/BT-CO-20130502-704220.html

-----------------------------------------------------------

Italy needs gold to remain undercover at least until CAUSE or PTB get access to the hoard. Not too sure that the masses are attached to Gold like the Indians. Just a guess.

Sandiaman · May 5, 2013 - 11:31pm
Zoltan · May 5, 2013 - 11:33pm

12 Hours Of Hockey

First to admit I'm a little punchy after watching hockey since the AM (Mrs. Z is ready to snap) but Stay Strong Friends. Our time is near.

Z

Adolf_Hitler · May 5, 2013 - 11:37pm

@Texas Sandman

Standing for delivery on May silver seems profitable business. Just look at the following link

https://www.goldmart.com/1000-oz-silver-bar-999-fine-comex-approved-bran...

1000 oz silver bars are standard Comex/LBMA bars. I guess quite a few industrial users are standing for delivery at the moment. 

kingboo · May 5, 2013 - 11:37pm

@Hagarth.......that's a good guess....

these days everything just seems like a guess....

but one thing is for sure.....the populous only sees what they want us to see....so google trends seems better at measuring "media saturation" and reaction than anything else.... it's just another tool for them to measure our reactions to their experiment......

Hagarth · May 5, 2013 - 11:42pm

World Gold Council - SPDR Sponsor?

Jason Toussaint

Chief Executive Officer, World Gold Trust Services

Jason is Managing Director of the Investment sector and CEO of World Gold Trust Services, a wholly owned subsidiary of the World Gold Council and the Sponsor of the SPDR Gold Trust (GLD). Jason leads the investment and product development activities in the gold ETF market including initiatives focused on expanding the use of gold in modern portfolio construction. He is also responsible for leading the global operations, sales, and marketing of GLD, the world’s largest gold ETF with over $70b in assets under management.

----------------------------------------------------

Anyone want to enlighten me on WHAT "sponsor" implies? Does WGC own/facilitate the GLD or was it WGC that came up with the idea?

I am sure it doesn't really matter.................................

Mr. Fix kingboo · May 5, 2013 - 11:51pm

@ kingboo Google trends:

 I love your analysis of the Google trends, I think you are correct in looking there to see what the rest of the world is thinking.

 I have come to a conclusion that the powers that be want to clear the markets of gold and silver, before the big price reset. According to Jim Willie, the only physical gold left that has not yet been pillaged, is in the "Roman catacombs", which I think is his way of not saying "the Vatican".

 Just thinking out loud, but would it be possible that the powers that be don't want to advertise within the borders of Italy that they are in the process of stealing all their gold?wink

 Just a little tidbit to add to your analysis, keep looking at the Google trends, I think that can tell us a lot.

kingboo · May 5, 2013 - 11:51pm

Thanks Mr Fix...

it seems the financial centers of the world is where the message was driven home.......

i'll keep peeking...

Texas Sandman Adolf_Hitler · May 5, 2013 - 11:56pm

@hitler

I've looked far & wide for those comex deliverable bars. I think Tulving has some NWT 1K oz ones. I can't remember the premium. Haven't been able to spot them anywhere else on the web. Maybe if you actually call a dealer & talk to him/her... They sure aren't advertised.

But it seems to me standing for delivery at the paper price, taking each of those 1K oz bars & smelting it down into 10 of the 100 oz bars with the premiums approaching $2/oz is a pretty easy way to make money. Granted, some will be siphoned off by the wholesaler & the dealer, but if you could keep $1/oz for your troubles, seems like a pretty risk free way to make a buck with demand as it is. Why wouldn't JM, RCM,NW, et all be lining up to do that???

What am I missing? Or maybe they're doing just that...

Karankawa · May 6, 2013 - 12:05am

Katie Rose has new goat kids, but is so busy she is absent ...

In the meantime, we have this, to keep us busy.

https://libertycalling.net/home/categories/foreign-policy/item/281-tsarn...

I'm not saying this isn't important at all. I'm just pointing out how globalization works.

God Bless you Katie, and best wishes for the 5 you have been blessed with. Having had goats that berthed, I understand what you are going through, and understand that you live in reality.

I hope that what you have gone through is the very basic of the foundation of this Board. Or at least the people that frequent it.

Karankawa

AlexCojones · May 6, 2013 - 12:10am

Lot of Firsts This Cinco de Mayo-Strike Syria & Gold Weekend

First time we saw Full Frontal & Backal Nudity on TFMR (Literally No Bikini Atoll).

First Time we saw a full frontal Assault by various trolls on a valued member.

First time we saw that same assault thrown back by a concerted Thin Red Line O Heroes and Hat Tippers.

First Time we saw Israel choose a Mexican holiday for her surprise strike on a neighbor.

Just a few "Firsts" I recall this weekend. 

AC

johnnydow · May 6, 2013 - 12:15am

Crude Oil Headed to $30-50

Possible top in oil. Gold headed to 750 and Silver 10.

End of the commodity bull. Its time to throw some more bums off the train.

Dow 20,000.00

Texas Sandman · May 6, 2013 - 12:26am

johnnydow the troll is back with us

You know the PMs are looking up.

Sorry, johnny. But you have it reversed. Turn your charts so they're right side up, please.

EE screwed the pooch in much the same as the Japanese did attacking Pearl Harbor. They awakened the sleeping tiger also. Now, we drop "the big one".

Stocks won't be interesting until the dow is roughly 0.8 times the price of gold. We'll see that so quickly now, it'll make your head spin. A year or two max. Gold/silver are now rising EXPONENTIALLY, not linearly.

The bottom in precious metals is now behind us.

Occasnltrvlr · May 6, 2013 - 12:27am

Just Stirring a Little

"First Time we saw Israel choose a Mexican holiday for her surprise strike on a neighbor."

Well, there are only 365 days in a year.

AlexCojones · May 6, 2013 - 12:28am

Very Powerful Video - I'd Love To Change The World -

Perfect Video and Song for this weekend, with the Middle East on the cusp of war.

I'd love to change the world Ten Years After
ReachWest · May 6, 2013 - 12:33am

OMG

My sincere apologies - I believe I hat tipped Johnny Dow by mistake.. My wife called my name and I thought that she wanted me to attend to her and my right click finger let loose and OMG I Hat tipped the dow fellow by mistake. My wonderful wife is still awaiting my arrival in the RW boudoir, and my interests are there. Good nite Turdville.

Urban Roman · May 6, 2013 - 12:37am

Another view

Since it's late in the thread and all ... 

https://guymcpherson.com/2013/05/show-time/

See you tomorrow, nite nite. 

Boswell · May 6, 2013 - 12:58am

CCTV Biz Asia America on Gold...

Forward to ~8:30 for the Gold part...

https://english.cntv.cn/program/bizasiaamerica/20130504/102274.shtml

They ran this Friday, clips of the Chinese buying frenzy, some guy talking (Sean Lusk - Ironbeam Precious Metals analyst), and an attractive blonde presenter! ;-)

The Watchman · May 6, 2013 - 1:15am
GS_PHYS · May 6, 2013 - 1:23am

Looks like, Indian Banks

Looks like, Indian Banks (about 36) being asked to reduce Gold import.

https://rbi.org.in/commonman/English/scripts/content.aspx?id=336

Related stories.

https://timesofindia.indiatimes.com/business/india-business/RBI-cautions...

https://www.deccanherald.com/content/330534/039curbing-bank-funds-spike-...

If this happens, Gold smuggling would increase and going to have large difference in spot price and Physical GOld for sure. Presently there is a premium of INR 900-1200 per 10 Grams. THis would shoot up to more than INR 2000/10 Grams.

There you have it Paper/Physical price divergence.

Ciscokid · May 6, 2013 - 1:40am

syria chemicals weapons.

It looks like its the rebels who used chemcal weapons.

https://rt.com/news/un-syria-rebels-chemical-weapons-854/

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