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

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  184 Comments

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Nana
May 30, 2013 - 5:05pm

Dryocopus pileatus

Sending you a hug, I value your opinion as well as every one here.

We all have something to say, contribute and share. We have all been drawn here because we all know this whole fiat debacle is not going to end well.

PS- I didn't know we disagreed, you have always been very kind to me and I thank you for that.

Bugzy
May 30, 2013 - 4:54pm
R man J
May 30, 2013 - 4:49pm

Armstrong Re: Hyperinflation

I have read Armstrong for several years. I find his forecasts to be filled with hedging. Try to pin his words down to a conclusion to gauge any future accuracy. You can't, because by that time he will have changed his forecast again. His esoteria may be impressive to some. But I prefer the straight-forward approach of a John Williams (ShadowStats) who has held to his forecast of a dollar sell-off in late 2013 to be followed by hyperinflation before the end of 2014. If Williams is wrong, we will know it. If Armstrong is wrong, he will have changed his call prior to that so he will not be seen to be wrong. Armstrong's forecasts are unheardable cats.

القراع عصفور
May 30, 2013 - 4:47pm

thanks dumbasses

for making things even worse. why the intolerance? why should religious posts even bother you. Nana, you are right here, and you and i disagree on a lot. so maybe my opinion counts a tiny little bit. but i don't care anyway.

monkry go ahead and post it. we have all seen it by now anyway. at least have the guts to put it on record.

we have a bullying problem at this site. the internet is a great place for cowards and this blog is no exception.

thesandbox
May 30, 2013 - 4:45pm

@ Jake Blues...Thanks for spreading the name of YHWH

Funny how things work out sometimes isn't it?

the iconic “live long and prosper” hand gesture was originally a Jewish sign.

The hand gesture itself is a slight modification of the Hebrew gesture forming the letter “Shin”, which represents the name “Shaddai” meaning “Almighty” (God). This gesture is still used today by orthodox Jews of the Kohanim, which are priests descended from Ahron by the patrilineal line. These Kohanim form a subset of the descendants of the priestly Levite tribe.

The Kohanim use the Shin gesture during a blessing ceremony, the nesiat kapayim or the “Priestly Blessing”, that accompanies the prayer service. The actual Jewish blessing is done with both hands, not just one, extended outward. In this gesture, the arms are then held at a roughly 45 degree angle, level with the shoulders, as opposed to the completely vertical salute fashion in the “live long in prosper” version of the gesture.

This modified gesture used by Star Trek’s Vulcan’s was originally Leonard Nimoy’s idea. Though Nimoy is not an orthodox Jew himself, when he was a child, his grandfather would take him to the synagogue. During his time there, he observed this blessing and subsequent gesture and, according to his autobiography, was very impressed by the ceremony; remembering it later while filming “Amok Time”, which is the first place the now iconic gesture appeared in Star Trek.

In “Amok Time”, Spock was originally supposed to kneel before the Vulcan matriarch, with the matriarch placing her hands on his shoulders in a knighting type gesture. Nimoy didn’t like this as Vulcan’s were touch telepaths. Thus, he felt this original gesture would be an invasion of privacy for a Vulcan. He then drew on his Jewish roots to come up with an alternate gesture.

The hand gesture itself wasn’t the only part that was borrowed from Jewish tradition. The “live long and prosper” and the lesser known Vulcan traditional response of “peace and long life” was based on the Jewish “Shalom Aleichem” (peace be upon you) and the traditional reply of “Aleichem Shalom” (upon you be peace).

Bonus Facts:

  • The Hebrew Priestly Blessing itself can be found in the Bible in Numbers 6:22: “May the Lord bless you and keep you. May the Lord make his face to shine upon you and be gracious to you. May the Lord lift up his countenance upon you and give you peace.”
Kcap
May 30, 2013 - 4:43pm

@southerncross

Excellent.

Just plain excellent. I say, you speak who you are and if "they" don't like it, well, too freakin bad. And if they don't see it in a Godly way, its because they have become "worldly" people. A damn shame....

Kcap

Bollocks
May 30, 2013 - 4:41pm

ohhh ... I can't help myself ...

@Southern Cross ... Jesus sent you this...



monkry
May 30, 2013 - 4:41pm

On 4th thought

NM again.

BohemianCry Me A River
May 30, 2013 - 4:41pm

@JakeBlues...

Oh, man, I am still shaking....

Thank you for telling me what He told you to tell me.

Live Long and Prosper, Jake.

القراع عصفور
May 30, 2013 - 4:38pm

i like NB's advice

i'll just call it living in the moment. it is too easy to caught up in negativity. none of us here like what we are seeing. i often wonder if i were offered a redo, if i would decline the red pill. (probably not!) one thing that helps me is that i believe that the end is really only a cyclical low point. we are at or near a bottom, and i am not talking only metals, or Keynesian economics! but i do agree that these subjects are a substantial part of the big picture. anyway, soon we will be noticing positive change - i believe it has already begun.

as far as religion, they are all right. some of you already understand that, the rest here are well along on that path. no one knows the total truth. all of us can understand and agree on certain principles common to all faiths, and even atheists!

this was just a quick commentary, and i should post it unedited before the thread goes to far from NB's important post.

thank you TF, and ALL who contribute here.

oh shit!, i just hit send.

edit - Jake - can you give a link to your Obama clip. that is too funny!

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