Not So Happy Tuesday

171
Tue, Jun 4, 2013 - 1:57pm

Lots going on today and I'm off to a late start so let's dive right in.

First, let's talk about the price action today. After the surprising rally yesterday, I asked you to watch the Asia and London trade for clues to the Comex action today. What did we see? After a flat Asian session, the London Monkeys did their usual thing from about 2:00 am EDT on. The London Monkeys have now acted on 14 of the past 17 days. Check this chart from Ranting Andy:

The result was a giveback of more than half of yesterday's gains.

Why did we see this? Hard to say for sure but, with volume light ahead of the BLSBS later this week, I suspect that a lot of this was some Bullion Bank selling that was aimed at lessening some longs ahead of the CoT survey. No doubt the action since last Tuesday is a continuation of the trend of last week's report. Therefore, the banks tried today to lighten a few of the longs they had built up over the course of the week. This also serves the dual purpose of defending the 20-day MA and restoring some confidence to some of the shaky spec shorts. At any rate...we're down a modest $13 as I type. Let's see what tomorrow brings.

Speaking of the CoT, there has been some excellent analysis written in the past few days so I thought I would highlight some here. Again, the positioning of the Commericals vs The Specs has gotten so extreme that it has reached historic levels. Ultimately, how you interpret this depends upon just whom you think is really in charge. Is it The Specs or do The Cartel Banks lead The Specs by the nose into whichever position they would like? Let's start with longtime CoT-watcher Gene Arensberg: https://www.gotgoldreport.com/2013/05/gold-and-silver-disaggregated-cot-report-dcot-for-may-31.html

Next, read this link over at KWN: https://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/6/4_This_Amazing_Chart_Shows_Gold_Set_For_Massive_$1,000_Spike.html. While we might disagree that this chart alone shows that "gold is set for a massive $1000 spike", the interview is helpful and in contains this excellent chart. (Click on it to enlarge.)

Reading that article inspired the Turdite "WildStyleChef" to create the chart below. This shows graphically how Commercial positioning is inversely correlated to price. (Again, click to enlarge.)

OK, moving on. I found this to be interesting. Recall that when the Dutch bullion bank, ABN AMRO, announced their plan to settle in cash a few months back, many of us called it a default. https://www.tfmetalsreport.com/blog/4667/gold-delivery-or-default This article published Friday follows along with that theme. I don't know anything about the author but that's OK. He probably doesn't know anything about me, either. https://www.jcaschipper.nl/2013/05/nationalized-abn-amro-offers-fools-gold/

Still lots of talk out there about Fed QE "tapering". Again, I think is all silly and it may be a non-topic as soon as Friday at 8:31 am. Regardless, as mentioned last week, even if The Bernank was to announce some type of "taper", it would likely come from the $40B/month MBS-purchase side of the QE∞ equation. The Fed could still monetize $45B/month in treasuries directly while cutting the Primary Dealer kickback life support handout welfare bullshit MBS purchases to $20B/month. This would still be $65B/month in QE and silence all the hawks. Not saying that it will happen, just saying that even if it did, it's no big deal! $65B/month is still nearly $800B/year in fresh greenback, created from whole cloth for the purpose of sustaining The Great Ponzi. Read more at ZH: https://www.zerohedge.com/news/2013-06-04/chart-day-feds-taper-perspective And here's how it looks graphically:

Finally, I don't know if you've noticed but lately there sure have been a lot of big mines that have been taken off-line.

So, now, what to make of all this? Well, if you believe that everything is hunky-dory and that there are no supply issues in gold, then this is no big deal. After all, even though The Grasberg mine is the largest in the world, it still only produces about 30 metric tonnes per year or a little over 1% of all global mine production.

If, on the other hand, you think that the Bullion Banks are living hand-to-mouth and frantically trying to keep their Fractional Reserve Bullion Banking system alive, then it is a big deal. A very big deal.

That's a lot of gold...a lot of currently anticipated and expected supply that isn't coming. How much of this production was already sold forward into the market? And if it was already sold forward, what happens when it fails to materialize on schedule? Hmmmm. Could that lead to those contracts being covered? Could it lead to some new long purchasing as a hedge against supply delays, not only from the suppliers but from the end-users, as well? And with the current CoT structure in gold being akin to an overgrown and dried out California ravine just waiting for a spark...

Let's just leave it there for today. I hope that the rest of your Tuesday goes well and I look forward to seeing what tomorrow brings. Again, if I'm right about the cause of today's drop being Cartel CoT-positioning, then we should see a bit of a bounceback on the Globex and overnight.

TF

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philipat
Jun 4, 2013 - 11:10pm

Good question

I usually only have one, primary thread per day. However, when there are days where there are two things I'd like to see discussed, I'll make one a "sticky" (yellow).

ancientmoney
Jun 4, 2013 - 11:07pm

Another snippet from jim Willie . .

"The true safe haven will be Gold. By the time the USTBond global dumping exercise is well along, expect to see the COMEX shut down, to have the Gold price go dark, for the lawsuits to line up. The COMEX has no alternative, since it will be completely and totally empty of gold. No market can continue without inventory, no matter how corrupt, no matter how powerful the bankers are, no matter what military intimidates its detractors, opponents, and enemies. Going dark is a necessary step for the release of the Gold price to truly high honest levels. It must pass through a climax storm."

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Yep, a shitstorm must be endured prior to gold and silver being recognized for its proper value. There will be a dark period during which gold and silver will be unavailable and nobody will know its price/value for some time.

Beastly Stack
Jun 4, 2013 - 11:07pm
philipat
Jun 4, 2013 - 11:03pm

As a relative newcomer to TFMR....

....A Question. I have often wondered if there a rule to determine which is the active thread? Today is a good example:

Is it the top most thread in a yellow box posted at 12:38P? Or is it the next thread down, in white, posted at 1:57P?

Thanks in advance to the older members for the clarification.

ancientmoney
Jun 4, 2013 - 10:56pm

Jim Willie's latest gold reserve estimates . . .

"Very difficult to prove, but the Russians & Chinese are aggressively converting their foreign reserves into Gold bullion. The Russians possess over 20,000 tons of gold. The Chinese possess over 10,000 tons of gold. They maintain their secrets, but the reality is a major story. The US press is nowhere on the reserves story, still locked on the official IMF and WGC phony gold statistics which bear as much truth as the USGovt jobs, economy, and price inflation reports. Almost every single Western economic and financial report is a lie. Neither Russia nor China permits any export of gold mine output. However, both superpower nations have been avidly converting FOREX reserves to gold bullion."

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Wow! Willie says Russia and China own 20,000 and 10,000 tons respectively. The U.S. claims to have some 8500 tons, but most has been frittered away holding down gold prices the last 15 years, as per GATA.

Soon, we will be dancing foreign tunes, and without phyzz gold and silver, those will be quite sad tunes. At these prices, anyone with extra fiat would be foolish not to get some PMs while they still can.

Fred Hayek
Jun 4, 2013 - 10:50pm

For . . informational purposes only?

So, there's an implicit assumption there that one's investing should not be predicated on the use of information.

How revealing.

Apparently, you should follow the herd. Or maybe you should take the mainstream media's counsel on how to invest. But then that would have the further implicit assumption that they don't dispense any information. So, you see, sometimes this works around to a kernel of truth or two.

Jun 4, 2013 - 10:31pm

Even better

At 1407, we are now back above the trendline.

Jun 4, 2013 - 10:29pm

Btw

The price action tonight is very nice, just as hoped for in this post.

We are now back up against the 2+ week trendline on the chart above. Let's see what The Monkeys do at 2:00 am...

ancientmoney
Jun 4, 2013 - 10:27pm

Right on, baby

Good stuff!

ancientmoney
Jun 4, 2013 - 10:15pm

COMEX hooie . . .

From Harvey Organ tonight:

"At the Comex, the open interest in silver fell by 321 contracts to 144,995 contracts with silver's rise in price on Monday by 49 cents. The silver OI is holding firm at elevated levels ."

--------------------------------------------------------------------------------------------------------------------------------

The silver OI is holding at elevated levels now ever since the MFingGlobal theft by JPM of MFG client silver. So, why would any legitimate trader be going long COMEX silver?

They wouldn't. It's as sure a loss as you'll find in bankster-owned arenas. Those longs in silver, which make it appear to be a real market, are offshore JPM entities making it look like there are legitimate traders making a market against the JPM manipulative shorts.

It's a giant sham. As Turd posted the brand-new disclaimer, they now admit it's a sham. There is no COMEX silver. All there is a bunch of paper made to appear as though there is plenty of real silver.

All PM markets are a sham. Buy the phyzz or Sprott's PHYS. All else, is buyer beware.

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