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

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s1lverbullet
May 22, 2013 - 12:29pm

This is just fucking amazing.

Gold and silver rally hard through resistance and then The Bernanke trots his little candy ass out there and talks the metals back down. Of course though, the DOW is still holding onto a 90 point gain today. Sentiment in these metals markets is just so incredibly negative right now that pretty much anything short of dropping pallets of hundreds on the streets right now from helicopters will not get these metals moving higher. The MOPE is just incredible. We are all rats in the biggest market psych conditioning experiment in history. They are literally trying to train common sense and caution out of the human condition. It's working well so far because the public is so damn stupid. Somedays I feel like I am in the twilight zone surrounded by mind numbed robots.

Mickey
May 22, 2013 - 12:27pm

let's face it

we have a broken stock, bond and PM market.

we have a broken economy.

we have broken banks.

When Jack Lew spoke about borrowing from Federal Pensions to defer default, people better understand the gravity of what he said.

He needs to keep printing just to keep govt going-thats aside from qe which is being done to keep the stock and bond markets going.

Things are hanging from a very thin thread.

twippers
May 22, 2013 - 12:19pm

bison

I made a small contribution to the cause yesterday and bought 11 1 oz Bison silver coins to add to the stack.

What a great feeling. A miniscule purchase in the grande scheme of things but it all adds up in the big picture.

May 22, 2013 - 12:14pm
SilverSurfers
May 22, 2013 - 12:12pm

@ Father Time

just look at that smug face, take em down, all of them, its time. Just watching time.

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agNau
May 22, 2013 - 12:02pm

wait for it........

Not convinced...... Not convinced..... Submitted by agNau on May 20, 2013 - 11:39am. Hat Tip! 2 the dollar rally has ended at resistance. The problem with much more dollar strength is the market reaction when that level is bested......as continuation will pressure equity prices.........ALTHOUGH.....a little scrubbing off of price would be in order to return the market to more sustainable trajectory. I would think this dollar rise will continue...... The profits will be taken from the late comers in market..... Then the WHIP SAW will start the rise once again..... Whip saw on both the real money side..... And the paper money side of equation. Use care. *************

The8thHabit
May 22, 2013 - 11:56am

THIS time is REALLY different! Forget the laws of economics!

How Gold Rallied for Years on a 'Misunderstanding'

Investors are just starting to realize that their framework for analysis can't account for what's happening in the world right now. They are gradually learning that the economics they learned from textbooks needs updating.

https://www.cnbc.com/id/100756275

wow

SilverSurfers
May 22, 2013 - 11:49am

Rock

roll on the crimex, eyes wide open, blood shot, turd gots the job for us all, man, on jack crap, blowing cookies, roller coaster child, loving you is really wild. Just holding on for dear life!!!!

Video unavailable

Atta boy Prize Fighter, keep on it, keep on it.

Utilitarian
May 22, 2013 - 11:45am

DrkPurpleHaze - HELP where is it

You posted about certain comments should be placed in -

"Outside the box is where future probabilities lie."

I just attempted to find the forum and missed it. Also did the Turd search engine and Outside the Box gave me podcasts.

Can you give me KISS instructions since I am to stupid to understand the obvious.

The Watchman
May 22, 2013 - 11:45am

Supply/Demand Has To Take Over Someday

Freeport can't say when Indonesia mine to reopen, confirms 28 dead

JAKARTA | Wed May 22, 2013 4:07am EDT

JAKARTA (Reuters) - Freeport McMoRan Copper and Gold Inc said it will not restart production at the world's second-largest copper mine in Indonesia after a tunnel collapse that killed 28 workers until it is convinced of the mine's safety.

Arizona-based Freeport suspended operations at the remote Papua mine on Wednesday last week, at a cost estimated at about $15 million a day in lost production, a day after a training tunnel away from its main operations fell in on 38 workers.

Ten workers were saved, but rescuers on Wednesday gave up hope of finding more survivors and the search for seven workers still listed as missing has turned into an attempt the retrieve their bodies.

"We're not going to let people go back until we're comfortable they're safe and that will be done in cooperation with the union and the rest of the workers," Freeport CEO Richard Adkerson told a news conference at Indonesia's mining ministry in Jakarta.

Freeport said it was too early to say when production would resume.

"We have not decided on when we will start the operation again because we are still focusing on how to solve the problem," Rozik Soetjipto, president director of Freeport Indonesia, said, referring to the cause of the tunnel collapse.

Investors are concerned the accident, one of the country's worst mining disasters, could further strain relations between Freeport and trade unions after a three-month strike in late 2011 and smaller disputes since.

The Grasberg mine, which also holds the world's largest gold reserves, normally produces around 220,000 tons of concentrated ore a day. Around 140,000 tons comes from open pit mining and 80,000 tons from underground operations, the firm said.

Indonesia has ordered an independent investigation into the accident and will also check all other underground mining facilities in the country, said Jero Wacik, Indonesia's energy and mineral resources minister, without elaborating. He did not say when the government may decide on whether to reopen the mine.

Indonesia's mining sector has a poor safety record after a series of previous accidents including an explosion at a coal mine in Sumatra that killed at least 28 people in 2009 and a landslide in 2006 that killed eight.

LIMITED IMPACT

The suspension of operations at Grasberg follows Rio Tinto's decision to suspend work at its Bingham Canyon copper and gold mine near Salt Lake City, Utah, in early April after a land slide.

The impact of the Grasberg closure on global copper supply has so far been limited as the mine complex keeps stockpiles in reserve in case of disruptions, although that would change if the closure drags on.

Benchmark three-month copper on the London Metal Exchange traded at $7,391.50 a ton on Wednesday, down slightly from where it was trading before the mine closure.

The impact on Freeport's stock has also been limited. Freeport shares closed at $31.98 on Tuesday, having held to a fairly tight range in recent days.

Still, analysts are concerned that the mine could face a prolonged closure. Freeport has said it would only reopen with government permission.

Mining industry sources say the tunnel collapse has also raised fears that a planned underground expansion by Freeport may prove more complex than first thought, putting at risk its aggressive production targets over the next few years.

"The tunnel was deep underground. The ore body is deeper still. The collapse suggests actually getting in there could be problematic and that Freeport will have to curtail its production estimates," said a mining industry source in Singapore.

Freeport Indonesia has forecast sales of 1.1 billion pounds of copper and 1.2 million ounces of gold in 2013, up 54 percent and 31 percent over 2012, respectively.

At current prices, the forecast production equates to an expected output of about $10 million of copper and $4.7 million of gold of day, according to Reuters calculations.

The expected rise in sales is due to higher ore grades and a ramp up in production from underground operations.

(Additional reporting by Randy Fabi in Jakarta and Melanie Burton in Singapore; Writing by Randy Fabi; Editing by Richard Pullin)

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