Pre-Bernank Post

130
Wed, May 22, 2013 - 10:05am

Just a quick post as The Bernank is due before Congress at 10:00 a.m. EDT.

Five things...in no particular order...

First, the Yen is rolling over again. In case you missed it, here's a reprint of a chart I posted as a comment back on Sunday. I went searching for something historical. One, to put the decline into context and, two, to look for a potential bottom level. Well, I think I found a bottom and it looks to still be a ways away. Maybe 85/115?

The open interest levels as we approach FND for the June13 gold are getting more interesting. The latest number is as of Monday. This leaves us with 8 trading days to go (including yesterday, for which we get the numbers today). As of Monday, the total OI in Comex gold had grown to 453,048. Interestingly, this is the highest OI level since March 13th. Additionally, with 8 days to go until FND, the June13 OI still stands at 186,952. Now don't go getting too excited just yet...but...with 8 days to go before FND for the April13, OI stood at 176,921 and with 8 days to go before Feb13 FND, the Feb13 OI was 187,059. Could we get 12,00-15,000 contracts standing on FND? Maybe. Why is this important? As of last evening, the total Comex registered inventory stood at just under 52 mts. Some quick back-of-the-envelope math reveals that this is only enough gold to settle 16,680 contracts. Hmmmm...

And this is fun. The GLD shed another 8.42 tonnes of "inventory" yesterday, dropping the alleged total "inventory" back to 1023.08 metric tonnes. How long before the total tonnage drops back into he triple digits? At this rate, not very. And chew on this little nugget I was sent yesterday: Back in the day, the GLD added about 230 mts in a little over a month. From 1/16/09 to 2/18/09, the "fund" went from 795.5 mts to 1024.09. Again, hmmmm. We are now back to that level. Will we now see 200 tonnes exit the "fund" in rapid succession???

Jim Quinn has written another excellent article. Please read this today: https://www.theburningplatform.com/?p=54125

And, finally, please check out the growing list of prizes for the Riff-Raffle. We've added several new items, most prominently, a one ounce Gold Philharmonic coin. This brings the total gold coins to be given away up to two!! The deadline for buying tickets has been extended to Friday so please consider purchasing a few and taking your chances. The current pool is about 450 tickets so you still have a decent shot at winning!

Have a fun day and enjoy the pleasant mutterings of The Bernank!

TF

About the Author

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turd [at] tfmetalsreport [dot] com ()

  130 Comments

Wizard
May 22, 2013 - 12:30pm

So let me understand...

The entire "Tapering Down of QE" came from one article and one writer at the Wall Street Journal and not from any official at the Federal Reserve???

I seriously need an answer to this if someone would be so kind.

When I began reading about the Tapering Down I thought it was from an official agency rep.

dropout
May 22, 2013 - 12:35pm

Never Before Seen

The gold miners bullish percent index. BP GDM

Mid - November 2010 @ 92.5%

Today @ 0.00% !!!

"I haven't seen this in 60 years of writing."

- Richard Russell (The 'Dean' of financial news letter writers)

He also went on to say; "I think the gold miners will fly once gold gets over 1500. This crunch job on gold is the crudest manipulation job I've ever seen."

Motley Fool
May 22, 2013 - 12:36pm

Wizard

He is known to have advance knowledge of FED intentions amd is regularly leaked info. Think of it like testing the public reaction. They did not like the reaction so they changed the message. Management of public perception and all that jazz.

NonoverlappingMagicCereal
May 22, 2013 - 12:37pm

Can someone explain to me

why an indication that QE will continue has brought metals back down? What were metals investors expecting?

Wizard
May 22, 2013 - 12:40pm

@SilverBullet

Yes we are definitely in the Twilight Zone when we step away from our keyboards and log off from Turdville. I have felt that way for a long time. It is a weird feeling walking through a Walmart, Meijer Store or at a public social event. Wondering how many of the people in here have absolutely no clue what so ever is coming their way. And wondering what is going to become of them. It is Heart Breaking at times

W

Wizard Motley Fool
May 22, 2013 - 12:43pm

@Motley Fool

Thank You,

Hunt brother
May 22, 2013 - 12:50pm

May 1, 2011 Silver measured 90...

On the weekly RSI. A reading of 90 or higher is very rare and indicates extremely overboughtt. The NKY, Japanese stock index fund, is currently 91.08! Something is going to blow.

Motley Fool
May 22, 2013 - 12:52pm

Nonoverlapping..the best I can do is guess

QE was already priced in (LOL!)

Stopping QE would have brought structural risks to the forefront, and made gold a safehaven for times of crisis.

Continuation of QE negates that risk(LOL!)

...

I don't think it make senses to want to the market to make sense in these fantasy times.

NonoverlappingMagicCereal
May 22, 2013 - 12:57pm

@Motley

Although you obviously think two of those are nonsensical, your explanation is about as good as anything I can muster.

Given the size of the swings and the fact that they seem at odds with the actual news, I wonder if that indicates that the recent price action is being driven primarily by speculators.

Motley Fool
May 22, 2013 - 12:59pm

Nonoverlapping

It's true enough in the mind of those big money managers....that alone makes it functionally true on short time frames. My laughter is reserved for their misunderstanding of tail risk.

NonoverlappingMagicCereal
May 22, 2013 - 1:05pm

@Motley

In that case, what would have validated the earlier rise in metals? Bernanke literally pulling out a stack of benjamin's and making it rain?

Cry Me A River
May 22, 2013 - 1:06pm

Ten Year Note Break Point Reached

A Few Weeks Ago, I Posted A Chart Of The Ten Year Note Yield Along With It's 3-Year MA. The reason for this was that the last time the ten year yield jumped above it's 3-year MA, (when the rate was at 3.24% on 12-08-2010), the silver prices rallied. This condition was just reached today, where the rate is now 2%:

I believe this to be significant, as it signals that although the ten year yield has been lowered by a full percentage point, nothing has changed except that we have added almost exactly $3 trillion to our national debt. As a result, any rise in interest rates will kill this fake recovery and require the Ben Bernank to resume QE even if he fakes at winding it down. Thus, we may be at an inflection point where yields rise and the stock market stalls. I just don't believe any of this "Exit Strategy" BS we're hearing today from this criminal who should be lead out of the congressional building in chains.

Here's a blow up of the inflection point:

Motley Fool
May 22, 2013 - 1:19pm

Nonoverlapping

I am not sure of the exact timing, but I suspect this :

At the start of his speech it was not clear that he was going to refute the position of tapering, and as such a spike occured on speculator thoughts shifting to systemic risk...later into his speech it became clear that QE was not ending...hence back to 'normal'.

....

Edit :

Having quickly looked at the ZH headlines, it seems the reverse is true...which makes more sense. BQE promised MOAR to begin with...and so it spiked, and later expressed concern about frothiness etc and hinted at perhaps reducing QE later, and so it dropped.

Fact is, god knows what is going on in the minds of those people, they can justify pretty much anything.

The Watchman
May 22, 2013 - 1:19pm

Chinese Love Gold

Wednesday, May 22nd 12:47 PM IST

China's Zijin acquires yet another Aussie Gold mine

Full ore production in the mine is expected in November 2013, when gold will be produced at an average rate of 110,000 ounces per annum.

PERTH(BullionStreet): Closing in on Barrick Gold's Yilgarn South group of mines, the 89 percent Zijin-owned Norton Gold Fields, Ltd. opened its latest open cut gold mine, Enterprise in Western Australia's Pilbarra.

Norton Gold Fields is also looking to acquire gold assets and this could include assets put up for sale by Barrick Gold Corp in Western Australia.

Analysts said this is a triumph of the symbiotic partnership between the Fujian-based Zijin and its Australian partner Norton, as shared knowledge and expertise literally prove their worth in gold.

The move suggests that forward looking Chinese operations with low cost capital and high technological capacities are stepping up activity in the global gold sector, just as many of the bigger Western operations are reining in spending in the wake of a 13 percent drop in gold prices since December 2012.

Full ore production in the mine is expected in November 2013, when gold will be produced at an average rate of 110,000 ounces per annum.

With rich synergies and complimentary ambitions, Zijin took control of Norton Gold Fields following a 229 million AU dollar bid, using the Perth-based company as a foothold in the Pilbarra to further acquisitions and joint venture opportunities.

The latest mine to feed Norton's Paddington mill fulfills Zijin's commitment to boost production, reduce unit costs and increase stakeholders' value.

Previously, Norton forecast gold output of 154,000 ounces to 162,000 ounces this calendar year from its Paddington mine in Western Australia.

In standing with the company's strategy to increase production and gold resources at the same time as trimming operating costs, the Australian unit of China's biggest gold producer, has indicated strong interest in three Barrick Gold Corp mines, reflecting strong confidence in the gold's prospects despite a recent drop in prices.

Rising demand for gold bullion and jewellery peaked in China as gold prices slid last month.The interest in Australian gold assets has investors running a ruler through other ASX listed gold companies.

China produced around 410 metric tons of gold in 2012, but consumed nearly 800 tons. The Asian economy is the world's biggest producer of the precious metal, ahead of Australia.

billwilson
May 22, 2013 - 1:20pm

Divergences

Miners still up 2%, silver up 15 cents .. gold ...down

Overall amrket looking shaky. The huge blow off on the Bernank's speech looked well .. like a blow off. Not sure how much more candy they can keep giving to the Street. At some point they need a break ... and volumes for a change are up today. Just have this spidy feeling that something is about to blow. Usually it is not good ... but went short the broader market ... masochist that I am.

dgstage
May 22, 2013 - 1:21pm

I think everyone should read this

The Guerrilla In The Midst-WHAT THE METAL'S MANIPULATORS HAVE PLANNED-V-

It has been well documented by me that there was going to be a Precious Metals beatdown within the range of $1200 -$1400 per once of Gold and $20-$24 per ounce of Silver. Now the latest forecast from deep behind enemy lines was so earth shaking at first that I myself could not believe it. In fact I am still taking this with a grain of salt. From the inner recesses of International Banking, the Money Masters are deciding on a plan so daunting I do not even know if they can pull it off. That plan folks is to Smash Gold down to $800 to $1000 per ounce!!!! Silver between $16-$18 per ounce. Believe me they will market this as the much needed correction, they will trumpet it as the bull market run being over, thousands will dump what little they have in the open jaws of the Jackal Multinational Banks and the Central Banks that front for them.

I want you to be VERY VERY aware. This strategy while a last ditch effort to save the COMEX, FED and Bullion Banks will also have another driving benefit. It will drive out for good the speculators who have used the instrument of paper manipulation to dictate and affect the physical market for decades. The blowback of all of this is once again ever dwindling supplies of Physical PM's and acquisition premiums going through the roof. Folks what I am saying is if Silver goes to $16 an ounce...do you think anyone will sell it in an environment in which there are dwindling supplies? NO! Of course NOT! This is going to be the beginning of the permanent dislocation of the Physical market from the Paper Market. I can see it now, ETF $16oz , Physical $40oz that looks like where we will be heading in the short term before the collapse finally arrives and PM's shoot to the moon.

Case in point. The Royal Canadian Mint just released a 1oz Buffalo Silver Commemorative coin at $100 face value, the darn thing is 96% sold out! Whats the big deal about that you say? Well last year the same Canuk mint released a $20 stamped Polar Bear Coin that never moved like this one. In fact SIlverCoinsToday.com stated "Royal Canadian Mint appears to be at or approaching a sell out with buyers getting a perceived bargain by paying face value." Did you get that? Buyers getting a perceived value. So what's really driving the blowout sale of 250,000 coins 96% sold out in days? Simple...The thirst for physical silver all over the world has dried up inventories everywhere, thus causing people to spend up to $100 an ounce and thinking it is a value!!! Why pray tell would the Royal Canadian Mint stamp a $100 face value on a one ounce Silver coin? Are they forecasting something? I think so. I sure do.



Folks watch the movement of oil...Remember this is one of the big indicators and on a future alert/ radio show I will correlate the relationship of Gold and Oil. The two major commodities of any sane nation looking to trade. If Oil continues it's rise there are fund managers in the Too PIG to Fails that are licking their chops to offset some of the worthless US treasuries that they are holding. What is a poor central banker to do? Print to Oblivion I guess. Hoover town here we come.

Be Ready-V-

--

May 22, 2013

https://www.stevequayle.com/index.php?s=33&d=383
Mickey
May 22, 2013 - 1:23pm

let's face it

I know our economy is headed into the tank along with all the ancillary issues.

I still believe that PM will provide a leg up to get to the other side. I think PM will be the last men standing. However, if housing and commercial real estate and fiat and stocks and bonds crap out, will gold even at a lower price be the best thing going?

I think we need the stock market to sell off to get momo players away from there and back into PM. With the size of PM sector do not need much.

dropout
May 22, 2013 - 1:25pm

It's a Big Club and You Ain't In It!

George Carlin said it best; "a system that threw them overboard 30 fucking years ago."

To go along with Jim's new piece in the 'Burning Platform' that Turd has linked to. Excellent. Read it.

☆ THE GAME IS RIGGED
Basil
May 22, 2013 - 1:36pm

Everything sliding pre FOMC minutes ???

Looks like everything is losing ground just now, not just the metals but stocks too (just for once). I think everything will be hit quite hard to the downside when the minutes are released in 25 mins.

Could well be the Gold retest of 1330 that many on this board have been expecting

pforth
May 22, 2013 - 1:44pm

Today was a message....

The message says we are still in control and we will not let the price go up. It doesn't matter what bullish news occurs, we are going to kill the PMs.

We can announce QE will never stop - and smash the PMs

We can announce QE will increase - and smash the PMs

We can announce QE will decrease - and smash the PMs

We can announce higher unemployment - and smash the PMs

We can announce lower unemployment - and smash the PMs

We can go to war with just about anyone - and smash the PMs

If there is a terrorist strike - we'll smash the PMs

We can do bail ins - and smash the PMs

We can do bail outs - and smash the PMs

We can steal people's brokerage accounts - and smash the PMs

We can default on any nation's debts - and smash the PMs

We can have our commercials appear to be net long - and smash the PMs

Dear small investor. There is no way for you to win until the entire f*cking system breaks... and we are going to pull every dirty trick in the book to keep that from happening so don't hold your breath.

2nd Dan Fred pforth
May 22, 2013 - 1:48pm

Deep Regret

Pforth, I can only say that it is with deep regret that I must agree with you. It breaks my heart.

SilverSurfers
May 22, 2013 - 1:48pm

Photo

finish, but nontheless, higher highs and higher lows, so back in heterodyne bullish mode, needing seven days of +2 scores for the shuttle lift off, but close is not a good sign, but bull puckey is in play. Just bear fighting in Mexico City, so, hasta la vista baby, and chill out, dick wads. Just being cool fools, with, at ease disease, theres fungus among us.

T2 Hasta La Vista, Baby
Silverivalist
May 22, 2013 - 1:54pm

HR 807 stalled in Senate

There is a chance we may soon have a new law passed that requires all US debt to be paid regardless whether or not the debt ceiling is increased. HR 807 went through the house on 5-9-2013, but has stalled in Senate. I will be watching to see what becomes of this bill.

https://mcclintock.house.gov/2013/05/full-faith-and-credit-act-hr-807-approved-by-house.shtml

Gramp
May 22, 2013 - 1:56pm

Holy Ballz!

Those Slave Queen Rounds are going for $14.99 over spot!! on the Doc's site!

Well I was up late on the 'Bay...

Managed to click my way to a lonely, poured 10 oz. of silver!

LCS is $8 over spot on Maples and ASEs

I am calling it good on purchases even though these are ' reduced' prices for the Metals. My gut tells me that if they languish around at these levels , things will ripen for another down draft... and it seems it would be a significant move. That would be when I get interested again

¤
May 22, 2013 - 2:15pm

Utilitarian

If you go to the "Recent Comments" widget in the side bar and click "more" at the bottom it'll open up to another page that's a lot different then the Google search at the top of the page.

Search any posters name in that Recent Comments page and you'll have better luck. You can also be forum specific to help narrow things down.

Besides these main threads most of my comments are in the Frivolity Forum.

Good luck trying to sift through and find any of my specific comments over the past 2 years (almost) Needle in the haystack :-)

Here's the comment from last night....there's another follow up comment on the next page.

https://www.tfmetalsreport.com/comment/200681#comment-200681

Keep an open mind. None of the things going on are normal by any stretch and as we can see...they have many levers and means at their disposal... plus a plan in mind.

Howard Roark
May 22, 2013 - 2:17pm

In the UK

"Man beheaded in suspected terrorist attack outside army barracks in London"

And Cameron returned from EU meeting.

On RT (online).

Willy
May 22, 2013 - 2:18pm

So f'd up

So.....the market and gold gets hit because the Fed may taper their bond purchases. Well WTF has been happening since September 2012 then Bart Chilton? Why wasn't gold rallying with stock markets when the Fed increased their bond purchases to $85B a month? Therefore if gold has traded down since September 2012 when the Fed announced the $85B/month bond purchases, shoulnd't the gold market be lifting off today if the Fed may scale back these purchases? Just like a previous poster said the paper price is being capped and beaten down. This can't continue forever. You wonder why the average investor left the builing a long time ago. The markets are completely FUBAR.

The Watchman
May 22, 2013 - 2:19pm
Willy
May 22, 2013 - 2:25pm

Miners

BUT, the gold miners are holding up relatively well today (so far, 1 1/2 hours to go) compared to gold which is a ray of light in another bonkers day.

Cry Me A River
May 22, 2013 - 2:32pm

Response To Turd About GLD Depletion Rates

Last Night, After I Crashed At Elwood's, Turd Wrote: https://www.tfmetalsreport.com/comment/200654#comment-200654

"Hey, Jake

Submitted by Turd Ferguson on May 21, 2013 - 8:36pm. MODERATOR Hat Tip! 9

Did I typo earlier? I haven't gone back to check. OOPS. I meant triple digits in tonnes. For a little extra fun, I just got this very interesting email from a contact I have who pays very close attention to things. Read this: another 8.42tons shed today.........now at 1023.08 tick tock tick tock towards 1000 tons we march

why is 1000 tons imp?

It has nothing to do with the round number psychology.if you plot the tonnage from Nov 04, you will see that the tonnage increased very rapidly from 795.5 on 16th Jan 2009 to1024.09 on 18th Feb 2009 This was right before QE was announced on 16th March 2009. I am expecting a sudden 200 ton drop very soon." So I Thought I'd Extend The Chart And See What It Might Look Like: Since My Chart Is Calibrated In Oz., 200 tonnes = 6,430,000 oz. The Current GLD Inventory = 32,892,960 oz. Turd's Target is 26,462,960 oz. So---Let's see when this might occur on my chart: If my original depletion rate were used, it would show that we'll get there in about 5 months by 10-23-2013 using a 30-day MA to generate the data. However, the recent depletion rates have dropped the inventory 490,208 oz. below the estimated drop rate line. Thus, in order to reach the daily drop rate indicated by recent data, we'd either have to project the estimated inventory ahead to 5-31-2013, or apply the average daily depletion rate as of 5-31-2013. This requires a 9-day MA which is increases the daily depletion rate to -144,774 oz. This would occur on 7-5-2013---AMAZING! Here's The Chart:

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