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

  Refresh
Hunt brother
May 30, 2013 - 6:58pm

Repost from May 19....

Andy Maguire's comment on KWN... by Hunt brother

1 week 4 days ago

Regarding the COMEX shorts is interesting.

He thinks the shorts have been pyramiding profits into an inceasingly larger short

position rather than taking profits. This leaves them extremely exposed to margin

call when the market reverses.

"Bulls make money, Bears make money, Pigs get slaughtered".

Update may 30, I think the short fuel runs gold to the 1600's soon.

The shorts got greedy, they will burn.

pbreedtyberious
May 30, 2013 - 6:48pm

The FED's magic wand

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?

¤
May 30, 2013 - 6:48pm

I hear ya DPH

Freaking kills me.

I ask...TWICE...to avoid all the religious stuff. And what do I get? Religious stuff!!

As this thread continues, anyone who posts or discredits religious stuff is going on moderation until Monday.

I am dictator, judge and jury. Don't like it? Move on. Period.

Hook
May 30, 2013 - 6:47pm

SoCal LCS report

I went in around lunchtime today and was the only customer in the store, which was strange. Last time I went there (a few weeks ago) it was wall to wall people buying, and a few people selling trinkets.

They had all the silver you wanted. Bars were 2 over, new Sunshine rounds were 2.25 over. I picked some up because I hate going to the lake and not having any silver with me.

Saw some gold odds and ends but I didn't ask about the inventory.

Bugzy
May 30, 2013 - 6:47pm

I am done

See you guys in about a week. Non over, have fun without me. Ps. whatever you do, not not think about food, when driving over those Golden arches while clowning around in the mactruck or playing with juicy toys. Cos I am loving it! Anyone thinking of a smoothie right now? Non over MO ; watch him, he is sneaky. Bugzy out.

SilverSurfers
May 30, 2013 - 6:35pm

ok

that does it. This was on the back page, but figure with the market closed. LOL

Unfair Damn it, That last post was just totally unfair to the anxiously waiting bugs, rather plain vanila type, and on the back page, of all things, damn it, so, lets rock, atta-boy, first things first, did the almighty leave the back page, just checking, his excellency pops in and out, ok, he gone, yeap, so lets rock, coast is clear, so on with the show, first dist the episcopols when the hot dogs were served, then dist the catholics when priests became rubgy coaches, then dist the methodist when taxes were collectivized in the voting booth, then dist the lutherians when homeroom prayer was prohibited, then dist the batists when drinking fountains were removed, then dist the evangelolists when panhandling was prohibited, the dist the adventists when door knocking was prohibited, then dist the presbyterians when head started ringing, then dist orthodoxes when bipolar was prohibited, then dist the pentecostal when the pentogon was hit, currently forming the dilectics because freedom is sought, all by myself, all six of us. :O Here ye, Here ye!!! Spirit In The Sky - Norman Greenbaum

THIS IS COMPLETELY A FANTASY JOKE: (heeeelllllloooooo) so the significant other, an ethnic Russian, gets back from the so-called spiritual meet, and the questions posed were, did you sing, nope, did you hold up your hands, nope, did you handle snakes, nope, did you have trouble speaking, nope, did you roll on the floor, nope, and then said, you did no such thing. On the floor! Rolling! ROFLMFAO!!!! Play it again sam: Spirit In The Sky - Norman Greenbaum,

Video unavailable
WhyMeLord
May 30, 2013 - 6:34pm

Just the Golden Rule

That's all it takes.

We were food shopping the other day and I was waiting in the parking lot for the wife. A few aisles over I noticed a woman struggling to collapse a baby carrier. It was starting to rain. I waited a few minutes and then went over to help her.

She had borrowed it and was not familiar with the controls. After a few minutes, as the downpour increased, we figured it out and she was done.

On the way back to my car in the rain, I noticed at least 6 other people sitting there, just staring at the scene.

Houston, I think we have a problem...

¤
May 30, 2013 - 6:32pm

Just checking in....

I'm pretty sure that TF mentioned he did not want to turn the thread into a religious discussion.

Yet here I am scrolling through post after post on the pro's and con's of doing or not doing so and why it should or shouldn't be important etc. Holy crap!

Meanwhile....the POTUS and the highest law enforcement official in the country are on a real hot seat regarding serious constitutional issue's that effect all of us.....the POTUS and Dictator Bloomberg are being sent poison in their mail......the MENA region is starting to smoke like tinder (people are being blown up by the dozens daily in Iraq lately)......the N. Korean peninsula has gone silent while massive naval exercises are still ongoing all around it......Japan has no idea how to proceed one way or another as the entire Yenzooka affair (and the Nikkei) is teetering and the impact of Japan losing control will effect every market in the world.....and parts of the world are extremely concerned about Monsanto/GMO and the worlds food supply going forward.

Yet....the pro's / con's of religion are the topic all the while some are still getting their shots in one way or another.

Someone start a forum OR maybe take TF seriously.

In today's gold and silver markets we had the following...

Have a nice evening.....Haze....out.

SilverSurfers
May 30, 2013 - 6:28pm

stockman

has no clue, he is an ex government hack, trying to sell his book, looking for band aides, and not lasting solutions. Blues clues were sent to Rick Santelli CNBC news, he would get it, if any of them would or even could.

tyberious
May 30, 2013 - 6:23pm

Author : Bill

Author : Bill Holter
Published: May 29th, 2013

Did you ever hear about the guy who bought some stock in some obscure company at $5 per share? The stock went up just a little bit, maybe a 1/8th or a 1/4th (yes I am old and remember the old days) so he decided to buy a little more. Each time he made a purchase the stock seemed to go up so he kept buying and buying. Once it got through $10, he would buy and the thing would move 1/2 a point at a clip so he bought more and more. Then this sucker blew through $20 and this guy was excited! So excited, that he called his broker and put in several market orders at successively higher and higher prices until it hit $50…a TEN BAGGER from his initial purchase, what a “home run he thought.” You know the end to this story, he called his broker and wanted to cash out and reap the rewards…when he told his broker to sell everything, his broker asked, “To whom? You were the only buyer.”

So why bring this old fable up? Because this is exactly what the Fed and Bank of Japan are, were and thought they were doing. The Fed for example has been buying up to 70% of all Treasury issuance for the last couple of years and built a huge balance sheet. They thought that they could “lead” investors into buying their treasury’s bonds by “example.” They thought that investors would think that there is no risk buying the bonds because the central bank is there to keep up demand and keep prices up. They were right…for a while. But now we are seeing rates go higher and bonds being sold off. This only makes sense as I wrote the other day about Japan. Who would lock in 1% rates if the central bank is promising 2% inflation and quite likely MUCH higher?

Another question that I have heard only very sparingly is, “Who is the Fed going to sell their bond inventory to in any exit plan?” And there you have it, the biggest flaw in logic to date because the answer (just as in the fable above), because the central banks in both the U.S. and Japan have gone from “buyer of last resort” to “only buyer of any substance.” Who would be stupid enough to buy Treasury securities if the Fed itself is not only a buyer but turned into a seller. Of course, then you also have the “nuts and bolts” question of who COULD be a buyer? WHO would have the type and size funds necessary to accumulate trillions of dollars of Treasuries? Japan? China? No, they have already been used and abused. There is no one anywhere on the planet that will step up and replace the Fed’s (BOJ’s) buying power. Forget about the “ramifications” of a financial collapse in all markets were the Fed to “exit,” logistically there is no one left able to buy what the Fed doesn’t…much less buy from the Fed’s inventory.

I got some flak for writing yesterday about Larry Edelson being “right” this year for the wrong reasons. I might as well add Martin Armstrong to this list. What I wrote above is exactly WHY you cannot try to time the gold market. No one knows when the “human perception” will get around to understanding that the Fed has no way out. They have no “exit strategy” because there cannot be one. No one knows when this thing will snap and no one knows when psychologically the masses will figure this game out. All I know is that naturally and logically once “reality” hits home, paper currencies will be seen for what they are…worthless. Once it is seen as fact that the “emperor has no clothes,” the biggest financial panic of all time dwarfing all others combined, will result. It is your personal decision whether or not you want to play musical chairs, my advice is to leave the room and don’t play the game for your own safety. The end of this game is obvious on so many levels, if you do not or cannot see that and want to be part of the cheering section, then have at it. I seem to remember just a month back where Bostonians were chanting “USA, USA” while under martial law and having their homes invaded. Some will get what they deserve and others will deserve what they get…one side of the boat is completely loaded; I suggest that you take the other side.

Subscribe or login to read all comments.

Contribute

Donate Shop

Get Your Subscriber Benefits

Private iTunes feed for all TF Metals Report podcasts, and access to Vault member forum discussions!

Key Economic Events Week of 8/10

8/10 10:00 ET Job openings
8/11 8:30 ET Producer Price Idx
8/12 8:30 ET Consumer Price Idx
8/13 8:30 ET Initial jobless claims
8/13 8:30 ET Import Price Idx
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Unit Labor Costs
8/14 8:30 ET Cap Ute and Ind Prod
8/14 10:00 ET Business Inventories

Key Economic Events Week of 8/3

8/3 9:45 ET Markit Manu PMI July
8/3 10:00 ET ISM Manu PMI July
8/3 10:00 ET Construction Spending
8/4 10:00 ET Factory Orders
8/5 8:15 ET ADP employment July
8/5 9:45 ET Markit Service PMI
8/5 10:00 ET ISM Service PMI
8/6 8:30 ET Initial jobless claims
8/7 8:30 ET BLSBS for July
8/7 10:00 ET Wholesale Inventories

Key Economic Events Week of 7/27

7/27 8:30 ET Durable Goods
7/28 9:00 ET Case-Shiller home prices
7/29 8:30 ET Advance trade in goods
7/29 2:00 ET FOMC Fedlines
7/29 2:30 ET CGP presser
7/30 8:30 ET Q2 GDP first guess
7/31 8:30 ET Personal Income and Spending
7/31 8:30 ET Core inflation
7/31 9:45 ET Chicago PMI

Key Economic Events Week of 7/20

7/21 8:30 ET Chicago Fed
7/21 2:00 ET Senate vote on Judy Shelton
7/22 10:00 ET Existing home sales
7/23 8:30 ET Jobless claims
7/23 10:00 ET Leading Economic Indicators
7/24 9:45 ET Markit flash PMIs for July

Key Economic Events Week of 7/13

7/13 11:30 ET Goon Williams speech
7/13 1:00 ET Goon Kaplan speech
7/14 8:30 ET CPI for June
7/14 2:30 ET Goon Bullard speech
7/15 8:30 ET Empire State and Import Price Idx
7/15 9:15 ET Cap Ute and Ind Prod
7/16 8:30 ET Retail Sales and Philly Fed
7/16 11:00 ET Goon Williams again
7/17 8:30 ET Housing Starts and Permits

Key Economic Events Week of 7/6

7/6 9:45 ET Markit Service PMI
7/6 10:00 ET ISM Service PMI
7/7 10:00 ET Job openings
7/9 8:30 ET Initial jobless claims
7/9 10:00 ET Wholesale inventories
7/10 8:30 ET PPI for June

Key Economic Events Week of 6/29

6/30 9:00 ET Case-Shiller home prices
6/30 9:45 ET Chicago PMI
6/30 10:00 ET Consumer Confidence
6/30 12:30 ET CGP and SSHW to Capitol Hill
7/1 8:15 ET ADP Employment
7/1 9:45 ET Markit Manu PMI
7/1 10:00 ET ISM Manu PMI
7/1 2:00 ET June FOMC minutes
7/2 8:30 ET BLSBS
7/2 10:00 ET Factory Orders

Key Economic Events Week of 6/22

6/22 8:30 ET Chicago Fed
6/22 10:00 ET Existing home sales
6/23 9:45 ET Markit flash PMIs for June
6/23 10:00 ET New home sales
6/25 8:30 ET Q1 GDP final guess
6/25 8:30 ET Durable Goods
6/26 8:30 ET Pers Inc and Spending
6/26 8:30 ET Core inflation

Key Economic Events Week of 6/15

6/16 8:30 ET Retail Sales
6/16 8:30 ET Cap Ute and Ind Prod
6/16 10:00 ET Chief Goon Powell US Senate
6/16 4:00 pm ET Goon Chlamydia speech
6/17 8:30 ET Housing Starts
6/17 12:00 ET Chief Goon Powell US House
6/18 8:30 ET Initial Jobless Claims
6/18 8:30 ET Philly Fed
6/19 8:30 ET Current Account Deficit
6/19 1:00 pm ET CGP and Mester conference

Key Economic Events Week of 6/8

6/9 10:00 ET Job openings
6/9 10:00 ET Wholesale inventories
6/10 8:30 ET CPI for May
6/10 2:00 ET FOMC Fedlines
6/10 2:30 ET CGP presser
6/11 8:30 ET Initial jobless claims
6/11 8:30 ET PPI for May
6/12 8:30 ET Import price index
6/12 10:00 ET Consumer sentiment

Forum Discussion

by argentus maximus, Aug 8, 2020 - 2:03pm
by argentus maximus, Aug 8, 2020 - 10:46am
by jack3617, Aug 7, 2020 - 5:51pm
by Titus Andronicus, Aug 7, 2020 - 5:13pm
by jack3617, Aug 7, 2020 - 5:06pm
by Steve S, Aug 7, 2020 - 1:59pm
randomness