Gold Is Going To $800

184
Thu, May 30, 2013 - 11:28am

(The reverse psychology test from yesterday is working so well, I thought I'd better keep it going!)

Well, isn't this nice? A genuine, bona fide rally! What's the deal? I imagine that much of this is being driven by new long interest in gold...well, not that new. As we approach June13 contract expiration, we have seen a bunch of contract holders sell but not immediately roll into August. In fact, total open interest in gold fell by 24,000 contracts on Tuesday alone as June contracts were sold and/or covered.

So today, with price rallying, those longs who sold Tuesday or late last week and didn't immediately roll because they had hoped for lower prices before getting back in, are suddenly rushing back in and we're up over $20 as I type. Hey, whatever...we'll take it. So now, what?

Take a look at these charts. On the daily chart, notice the undeniably pretty double bottom at $1350. All along, Andy has been reporting very heavy buying interest and huge pending orders at and below $1350. Well, it certainly looks like he was accurate because every time the paper bears tried to break price down below that level, price almost immediately reversed and moved higher, no doubt on the back of bullion bank buying which hoped to keep those orders from filling. Now, not only does the daily chart look compelling, look at the shorter 4-hour chart, too. We had that spike high of $1413.30 last Wednesday as The Bernank's prepared remarks were released. You'll recall that price then collapsed amidst all the nonsense talk of "tapering". Well, lookyhere. We are right up against that level as I type. A move through and close above would be very bullish and would set the table for a move back toward the early-May highs just below $1500.

To bring all of this in line with yesterday's post...Part of the move today can be traced back to some lousy jobless claims and other data released earlier today. Yesterday's post carried the theme that the data was about to turn worse and all the talk of tapering was going to fade away. What I postulated yesterday was the possibility that price could be shaken out one more time before the BLSBS next Friday. It could still happen but, obviously, today's action makes it less likely.

Turning to silver, it too is rallying today, though not as aggressively as gold. This is also likely due to expiration as silver didn't/doesn't have as much "dry powder" on the sidelines at this moment. Regardless, look at these charts. First, note that $22 silver is very much like $1350 gold...a very solid floor. Outside of the nonsense shenanigans of two Sundays ago, $22 has held very well. Now, can it get up and go to the upside? Well, like gold, let's watch the spike high from last Wednesday for clues. IF silver can move decisively through the $23.30 area, fresh shorts will begin to cover more aggressively and we'll see a quick move toward $24. From there, the next target is the $24.84 high of 4/26.

Getting back to the open interest numbers, tomorrow's CoT is going to be a doozy. Tuesday was CoT survey day but it was also option expiration for the June13 which goes off the board on tomorrow. As mentioned above, almost all of the paper traders are currently liquidating June positions and rolling them into August and beyond. So, for the reporting week, though the price of gold was up a whopping $1.30, the total Comex open interest fell by almost 8% or 35,000 contracts. That's a lot. I'm very much looking forward to seeing who was buying/covering and who was selling. The silver CoT will be fun, too, as price fell by 25¢ but total OI also fell by about 3,500. Again, who was selling/covering/buying? We'll see. Only have to wait another 28 hours. Grrrr...

Finally, LOTS of interesting stuff emanating from the MENA again today. Just a few days ago, Russia pledged to send S-300 anti-aircraft missiles to Syria and, from the looks of things, they're already there: https://www.zerohedge.com/news/2013-05-30/first-shipment-russian-s-300-rockets-arrives-syria but debka claims that they're not: https://www.debka.com/article/23002/Israeli-intelligence-denies-first-Russian-S-300s-arrive-in-Syria---contrary-to-Assad’s-claim-. Either way, this entire situation is getting stickier by the hour. Now, you may ask what this has to do with a PM-related website but I can assure you, if things get out of control in the MENA, there ain't gonna be any imminent QE tapering, that's for sure. So we're going to continue to watch this closely. One "tell" will be the price of crude. It has magically stayed below the trendline drawn on this chart since the QE∞ announcement last September. If/when is busts through, you'll know something is up, whether or not Syria is "fixed".

And all this talk about World War III has me thinking this morning about a book I read six or seven years ago. It's one of those novels that try to intertwine current events into a fictional format. This one dealt with war in the MENA and looked at it through the prism of The Old Testament prophecies of Ezekiel. Look, it's not for everybody and I certainly don't mean to turn this thread into a religious debate...but I get asked for book recommendations all the time and this is a fun and timely read. You should pick it up before heading out for vacation or to the beach.

OK, that's all for now. As I close I see that the metals are still hanging in there at $1415 and $23. Keep your fingers crossed.

TF

About the Author

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turd [at] tfmetalsreport [dot] com ()

  184 Comments

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That_1_Guy
May 30, 2013 - 7:39pm

Hello Everybody....seems like i missed some great fun?

Hello All,

So Whitney hiking was aborted due to a dog. This dog. An adopted stray.....

https://en.wikipedia.org/wiki/Tibetan_Spaniel

Back from the mountains. Was going to hike Whitney, but someone (mother in laws) dog went missing the night before we were going to hike. Needless to say, spent from 11 pm till 5 in the morning looking for this Tibetan spaniel. Hes a cute little guy and I think i personally walked at least 5 miles with flashlight in hand looking for the little guy... so i wasn't about to hike out in the morning with all the crying, uncertainty and tired hiking party...etc. All i know is that dog can run. The cabin backs up to BLM land. After calling it a wrap...bears, cougars, coyotes and bobcats all in the immediate area, I go back to the cabin and go to bed.

About an hour after I finally fall asleep, i hear a whimpering and scratching at the door. It was our adopted buddy...full of briars...limping, but visually unharmed. Happy Day! Everyone's happy.

I spent the rest of the time up there trout fishing from a kayak, shooting at the local private range, feeding goats and bbqing by the river....silver bullet in hand. I was a little disappointed that we missed Whitney, but I have done it before and will do it again..and everyone else was content with the alternative plan...so no harm, no foul.

Im thinking of making some custom silver 1 ounce rounds. Im looking at starting with 1000. Looking for ideas of what to put on them. Was thinking some graphics from the movie Heavy Metal on one side and Fiat Fighter on the other? Any other ideas welcome.

Seems like theres not much of an issue with that penasquitos mine dispute...sorry for the distraction. Keeping you all on your toes. ;)

Happy Thursday!

GUY

PS. On religion... i dont pick or choose sides...but someone was watching over that dog. :)

argent rampant
May 30, 2013 - 7:37pm

@DPH

My latest moniker expresses where I believe we're headed, so I will stick with it, too!

May 30, 2013 - 7:35pm

Would It Make Sense For The Fed To NOT Manipulate The Gold Price

Conspiracy Theory Conspiracy Fact
The TBTF banks are committing fraud in the RMBS market. Turns out they were. Linda Green was quite busy. Potentially millions of Americans were evicted from their homes by the banks knowingly submitting falsified documents. Fines were paid and settlements made but not a single banker goes to jail. Fact.
The TBTF banks are manipulating LIBOR. True again. Case is ongoing but manipulating LIBOR had apparently become old hat for many years. Mid-level executives and traders will be sacrificed but unlikely any CEO or central banker is indicted although they all had to know and approve.
The TBTF banks are facilitating global money laundering activity for Mexican drug cartels. True. HSBC. Again, fines paid and settlements made but not a single person indicted. DOJ is scared prosecuting anyone at the TBTF might upset the economy. This position, in my humble opinion, is beyond ridiculous.
The IRS is targeting the President’s political rivals. True. Heaven help you (and your wallet) if you decided to exercise your constitutional rights to form a Tea Party or Patriot-type political group.
The Justice Department is wiretapping reporters whose views contradict the storyline the White House wants in the public. True. Heaven help you (and your wallet) if you decided to exercise your constitutional rights to form a Tea Party or Patriot-type political group.
The White House lied to the public about what happened in Benghazi. The uprising was caused by an anti-Islamic video that was circulating on Youtube. That’s all. Uhhh, you sure? This had nothing to do with the very same shady rebels we had been funding?
The Fed, in coordination with other Western central banks is suppressing the price of gold artificially ???

From ZH, of course. Worth a look, though more preaching to the choir for this crew -- perhaps useful if still trying to convince someone close to you.

Also, I took a trip down memory lane and re-read this classic from ZH (March 2012):

“We Are This Far From A Turnkey Totalitarian State" - Big Brother Goes Live September 2013

At leas it's better to be in a state of ultra-cynical apathy than to cry in a corner, curled up in fetal position, right? But what this means is that the whole DOJ/IRS/AP phone-records charade is just that -- a charade. They ALREADY HAVE ALL THE PHONE RECORDS as well as all the recordings of all the conversations. Who gives a flying F that some apparatchik happened to grab a few thousand lines of them?

pbreedالقراع عصفور
May 30, 2013 - 7:35pm

Whats the difference...

The FED has been buying up the long term debt....

If the FED just holds the debt, rolls over as the bills expire and refunds the interest $ to the treasury (as it is doing now) From a practical basis how is this any different in any way than saying debt is forgiven?

I'm not saying the debt will be forgiven for those other than the FED holding debt, only that as the FED owns more and more of the outstanding U.S. debt the practical difference is ZERO.

From a practical standpoint the FED is already doing this...

How would the flow of funds change in ANY way if instead of holding the notes it just said gone...forgiven... it may choose to keep a paper entry saying it holds X Trillions in UST debt so as to not spook the sheeple... but... from a practical standpoint its already forgiving the debt....

SilverSurfers
May 30, 2013 - 7:33pm

More

thought is had, the move convinced I am that turd would rock this world with the suggested pod cast, no bragging intended, just matter of factly. Just Saying. This place would light up. OMG, a youtube relay, Turd goes rock star within 24 hours. wooooo baby ...... heheheeee calm down HI HO SILVER.

Lone Ranger Opening Theme
Video unavailable

Ain't superstitious,
black cat crossed my trail.
I ain't superstitious,
but a black cat crossed my trail.
Bad luck ain't got me so far,
and I won't let it stop me now.
The dogs begin to bark,
all over my neighborhood.
And that ain't all.
Dogs begin to bark,
all over my neighborhood.
Mmm-mmm
This is a mean old world to live in,
And I can't face it all by myself, at all.
And, dogs begin to bark,
all over my neighborhood.
The dogs begin to bark,
all over my neighborhood.
I got a feelin' about the future,
and it ain't too good, I know that.
I know, I know, I know.
Ain't superstitious,
but black cat crossed my trail,
(I said it so many times before)
Ain't superstitious,
a black cat crossed my trail.
Bad luck ain't got me so far,
and you know I ain't gonna let it stop me now.
Come on.

القراع عصفورpbreed
May 30, 2013 - 7:33pm

magic wand

pbreed asked,

"When the FED holds 100% of the outstanding t-bill debt....

Why can't they just wave their magic wand and say poof its gone.

What is the downside?

Why do they have to sell it?

How is saying "poof its gone" ANY different than them just holding it and refunding the interest to the treasury?

Is there ANY practical difference in $ flows, or anything else for ANY market participant?

Its so blindingly obvious that I can't see any other end game?"

first it is doubtful that the FED can ever own all of it because short term gov't debt is a preferred form of liquidity - what is generally called the money market. but besides that, this may in fact be what happens even if it is not formally announced. what you are talking about is the end game. once the illusion that paper is money ends anyway.

i don't think the FED will preemptively forgive this debt because all confidence would be lost in the dollar, as the reserve currency. even domestically this probably would be enough to wake the sheople. i have to believe that there will be no debt jubilee. gotta go - having a pet emergency!

edit: sorry thunder freaks out my cat. hope i made some sense. see y'all later. be kind.

NEKO
May 30, 2013 - 7:32pm

My $0.02 worth

I often come here for a quick update on what's happening to PMs but have to trawl through a lot of irrelevant stuff to find any real info.

Is it possible to reorganize the comments and just put the most relevant first and then all that first, second, third BS (sorry to say) and religious BS at the end.

That way you wont get accused of "censorship" and we can all read what's important without hindrance.

That's my $0.02 worth. Thanks.

Southern Cross
May 30, 2013 - 7:31pm

Wheat - 39,400% Profit Coming

The Bible prophecies approximately 39,400% profit in wheat at todays price.

(Who says the Bible is not a great investment book? "the very mind of Christ" NT)

This will happen. Can not say for sure timing.

The Bible prophecies in Revelation 6:6 near the end of time, which we are fast approaching, a "measure" of wheat, or roughly today one US dry quart of wheat will sell for a days wage. What does this astonishing prophecy work out to in todays dollars? Lets say the person earns $12.00 per hour currently. With 8 hours work the price of a US dry quart of wheat is going to be $96.00 when the end comes . Consider though this estimate may be incorrect. Back in Bible times people worked longer than 8 hours in a day. Today a bushel of wheat is around $8.50 . There are roughly 37 quarts in a bushel. Friends the Bible is saying when things get really bad a bushel of wheat is going to roughly sell for $3552.00 . That's right $3552.00 for a bushel of wheat. No wonder George Soro's has bought up almost all the grain distribution in the US. At $3552.00, in todays dollars, that's a 39,400% increase in price. Just a suggestion, but I would stack some food for your family and some for trading. In the Bible Joseph stacked food for 7 years to eat and trade. He ended up buying in trade for food all the livestock, land, and possessions in Eygpt with his food stores when the 7 year famine hit Eygpt.

Friends canned wheat has a minimum of 30 year shelf life. I believe we are entering the beginning of the "end of the ages" as the Bible calls it. The signs are everywhere. It could be 3 months or 20 years but the time is near. Wheat has been found in good condition entombed with Eygptian kings. Whatever wheat you buy and store will most likely be worth alot more in 30+ years if not used. Does buying a supply of wheat and putting it away for your family or even some as an investment make sense? If all you have to feed your family after 6 months of a severe crisis is gold an silver, your destroyed. If you can find someone to trade food for metals, it's going to cost you everything saved to provide some food for your family. I am not sure those who have food in this situation will want to trade.

The Bible also states barley will sell for 1/3 of wheat or 3 quarts for a days wages. That's still $1184.00 for a bushel of barley. Wow. I call that hyper inflation. Sadly starvation for many.

Just food for thought.

God Bless each of you.

Lumpy
May 30, 2013 - 7:29pm

Posted this a little more than a year ago.

$15,684,790,233,212.04 National Debt as of 5/3/2012 by Lumpy

1 year 3 weeks ago
09/30/2010 13,561,623,030,891.79
09/30/2009 11,909,829,003,511.75
09/30/2008 10,024,724,896,912.49
09/30/2007 9,007,653,372,262.48
09/30/2006 8,506,973,899,215.23
09/30/2005 7,932,709,661,723.50
09/30/2004 7,379,052,696,330.32
09/30/2003 6,783,231,062,743.62
09/30/2002 6,228,235,965,597.16
09/30/2001 5,807,463,412,200.06
09/30/2000 5,674,178,209,886.86

If I were the head of the Dept. of Bullshit (DOB), A.K.A. the SYSTEM/FED. You can bet your butt that I am going to LIE MY ASS OFF every day! I am going to Manipulate ANYTHING that could wake people up to the fact that we are screwed. I WILL DEMAND that the fine people around me do the same.

Problem? What problem?

Manipulation? Where????

Relax people.....We have it all under control. Always have.

You're damn right they're going to manipulate Silver/Gold/POSX/Hillary's Hairdo.......ANYTHING! to keep the illusion alive.

EDIT: Today the national debt is $16.842 Trillion.

An increase of $1.158 Trillion dollars in national debt.

Problem? What problem? Relax people...we have it all under control.......

Sad-descentpbreed
May 30, 2013 - 7:24pm

@pbreed

"When the FED holds 100% of the outstanding t-bill debt"

bills wouldn't need to be sold back because they have maturities of less than a year, so they can just hold till maturity. It is the bonds they are going to have a problem with I think. While the Fed might be purchasing the majority of new issuance there is still a lot of other outstanding treasuries. If they remit their holdings back to the treasury I think rates on new issuance would sky rocket. That would crash the value of outstanding bonds and cause servicing costs of new issuance to go up, which the Fed budget can't absorb.

JMO Sad

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