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

Founder
turd [at] tfmetalsreport [dot] com ()

  184 Comments

May 30, 2013 - 12:48pm

Agan

I posted the book because I wanted to make it known to those who might be interested.

From here, any posts debating religious issues will be moderated.

billwilson
May 30, 2013 - 12:48pm

this afternoon will be key

We had a similar nice run 3 weeks ago that got killed when the yen went through 100. It will be key to see if we can hold gains, especially in the miners, until the close. Any afternoon reversal could be ugly.

NonoverlappingMagicCereal
May 30, 2013 - 12:48pm

@sad-descent

I find that if I am upset at the price action it tends to be because of opportunity costs that arise from keeping a portion of assets in something that is a store of value rather than what I would consider an investment. I usually calm down pretty quick because there just isn't much in the way of investments price attractively because of the zero interest rate environment.

Good answer. Even as a 'beneficiary' of the recent bull market in equities, I agree that PM holders shouldn't lose sleep over the opportunity cost because it may very well be illusory. I'll be damned if I know what stocks would look like without ZIRP and QE, or what they'll look like after those policies are phased out, but I bet it isn't pretty in the short term.

JackPutter
May 30, 2013 - 12:50pm

If someone posted this...

I must have just missed it.

Former UBS Banker Says He Wasn't Seeking Underage Prostitutes Because He Had Sex With 10 That Were Over 18


Read more: https://www.businessinsider.com/ubs-buergrin-underage-prostitute-trial-2013-3#ixzz2UnMFNiSp Bankers math.
Southern Cross
May 30, 2013 - 12:50pm

@tyberious

Sir, I do speak only for myself.

Your attitude demonstrates the Bibles Truth. Jesus said His words, His people, His teachings, and He would be hated by unbelievers. It's reasonable to disagree with someone and not believe what they state; however, it verifies the Bibles prophetic accuracy to express outrage at Biblical Truth. Such anger is not natural but deep seeded, from the heart, and is anti God. Makes sense. There are only two forces in play. One is God. One is not.

What proof do you offer the Bible is incorrect?

Muslims, Jews, Christians, Budists, Hindus, and known historical books all teach Jesus existed. World history demonstrates the footprint of Bible accuracy. Biblical prophecy if researched and studied is beyond question.

The question for each of us is was Jesus God's Son?

margaritatime
May 30, 2013 - 12:54pm

awesome

this appeared in my pan this morning. surely it is a divine message.
i believe in bacon and my life has meaning. i haven't even had a friday happy hour this week and feels like a sunday. (face palm).

meanwhile, on the metals front..

SV
May 30, 2013 - 12:56pm

And then things will be different...

Even through a picket fence, one can see the other side. And from behind the blinder of economy, we peer through and see what's there: gold, silver and bitcoin.

The pops today in gold and silver were familiar. It was the sort of evening and morning which younger gold and silver bugs used to stay up all night/wake up early for. This pop of last night and today carried an excitement reserved as of late for Bitcoiners.

The inverse story of today is also familiar: one in which the US Dollar has traded down. This is the true root of the rise in the metals on this day. The dollar will trade up again, but over time as minds are released from the play of domination and subjugation, the USD will serve no purpose, and never trade again.

And then, things will be different.

https://goldsilverbitcoin.com

NonoverlappingMagicCereal
May 30, 2013 - 12:56pm

@TF

Look, CerealMan, you're usual path from here is to parse these comments and then ask further questions in the hope of catching me in some king of contradiction. No such luck today. Maybe some else can help you. I'll be busy the rest of the day.

Well, lucky for both of us I don't see any tempting contradictions in there :)

I would also have accepted as an answer that you'd simply like to see reality start re-aligning with your past prognostications.

Bugzy
May 30, 2013 - 12:59pm

Oh man

Overlap: You are so transparent it is laughable.

You attempt to slip subliminal suggestion into every post.

Losing sleep over over opportunity costs = you are getting no return you know - but please do not worry about that.

What will stocks look like after QE ends - and by inference Gold = Stocks and Gold good in QE so better have stocks because of opportunity costs.

I say again. You are NOT an asset to this site. I ask Turd to terminate you forthwith. How about democracy in action.

Hat tip here if you want non over lap gone

Bugzy
May 30, 2013 - 12:59pm

Non overlap

Hat tip here to keep non overlap

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