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

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turd [at] tfmetalsreport [dot] com ()

  130 Comments

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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 - 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 - 12:52pm

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.

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.

WizardMotley Fool
May 22, 2013 - 12:43pm

@Motley Fool

Thank You,

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

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?

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.

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."

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.

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