A Pattern Emerges

229
Wed, Jul 10, 2013 - 12:14pm

Because I'm still adjusting to the time change coming off of my vacation, I found myself tossing and turning last night when I suddenly came to this realization. Though not on the level of Dr. Emmett Brown after hitting his head on his bathroom sink, I think you'll find this interesting, nonetheless.

As you know, The Bullion Banks have engaged in a relentless campaign to lessen their exposure and potential liability in paper precious metal. Since the announcement of QE∞ last September, price has counter-intuitively fallen by over a third from near $1800 to below $1200. All the while, The Bullion Banks have decreased their total net short position in paper gold from 737 metric tonnes to less than 70 metric tonnes (from the CoT survey of 7/2/13). From a chart perspective, it looks like this:

Now, look closely. See anything? No? Look again, even closer. Do you see anything now? Do you see any type of pattern?? I must admit that, prior to last evening, I hadn't seen it, either. But it's there, waiting for you to discover it.

OK. What if now I gave you this? Take a look at the chart below with some notes made upon it. Now what do you think?

Hmmm. Well that's interesting, isn't it? Yes, price is down by over 30% from last September. However, almost all of the decline has taken place during the five calendar months of October, December, February, April and June. In fact, as you'll see below, the vast majority of the decline has occurred during the middle of those months. Hmmm. That's interesting, too.

Now before we dig further, what if I gave you these two charts?

So, now, let's go back to the current decline. What is so special about the months of October, December, February, April and June? I'll give you a few moments to think about that before we continue...

.....

.....

If you guessed, "They're Comex delivery months, Turd!", then you win today's prize! Yes! Those months are, in fact, "delivery" months for The Comex. Recall that the active futures contract is always the front month for delivery. Currently, this is the August13 contract. As of Monday, it had a total open interest of 206,000 contracts and it will stop trading and have it's First Notice Day on July 31. Anyone holding a contract after that date must show their intent for delivery by providing 100% margin in their account. Deliveries to eligible contract holders will then take place through the month of August.

Still with me? Good.

This same process occurred back in September for the October12 contract. First Notice Day was at the end of September and deliveries took place through October. The price of gold peaked at $1796 on October 5 but managed to hang in there for another week or so. But then look what happened and note the exact date:

DATE PRICE GLD TONNAGE

10/12/12 $1773 1,340.52

10/24/12 $1699 1,336.90

10/30/12 1,336.30

So, what do we see here? Near the middle of the delivery month, price began to drop rather steeply and a little bit of gold was shaken out of the GLD "inventory". Then, after a decent rally in November, price began to decline again once we flipped the calendar to the delivery month of December. Look what happened and, again, note the date:

DATE PRICE GLD TONNAGE

12/12/12 $1723 1,351.42

12/20/12 $1635 1,350.52

12/28/12 1,350.82

And now you're thinking, "OK, Turd. What's the deal?". Well, let's continue, shall we? Again, please note the date:

DATE PRICE GLD TONNAGE

2/11/13 $1669 1,326.89

2/21/13 $1555 1,290.31

2/25/13 1,272.85

Well, that's interesting. This time, the mid-delivery-month decline shook out over 50 tonnes of gold from the GLD. "Hmmmm. I wonder what would happen if we tried that again?"

DATE PRICE GLD TONNAGE

4/12/13 $1564 1,158.56

4/16/13 $1321 1,145.92

4/29/13 1,080.64

"Wow. This is awesome!", the Evil Ones said. "We hit price in February and shook out 50 tonnes. Then, even while price was stable from 2/21 - 4/12, we were able to grab 114 more. Finally, by breaking price down through the floor at $1525, we got 75 tonnes in April! What a deal!!"

Once again, price was relatively stable mid-April to mid-June, while no Comex deliveries were taking place. Then look what happened, again paying special attention to the date:

DATE PRICE GLD TONNAGE

6/12/13 $1394 1,009.85

6/28/13 $1181 969.50

7/9/13 939.75

So, what is the lesson here?

  • The Bullion Banks have utilized the manufactured price drop to lessen their exposure and potential liability in paper gold by over 90%.
  • This resulting "discount" in paper price has led to a surge in global physical demand. For example, see here: https://www.mineweb.com/mineweb/content/en/mineweb-gold-news?oid=197040&sn=Detail
  • However, Registered and Eligible Comex inventories are dangerously low. As of yesterday, The Comex showed 224 tonnes of Eligible and just 35 tonnes of Registered (ready for delivery).

What to do, what to do? The plan is clear! Raid price during the delivery month!! Create the selling and panic necessary to shake loose tonnage from the GLD. Use this gold to settle delivery obligations, not only in New York but London, too. Once the current delivery "crisis" has passed, leave gold alone to wallow and flounder, only acting to cap price whenever necessary to keep the downtrend in place. Once the next delivery month arrives: Wash, rinse and repeat.

Going forward, this likely means that we're "safe" for about another month. Besides, it's summer and we're in the middle of vacation season. Aside from the occasional short squeeze or price plunge, the pattern suggests that gold will be stable between $1250 and $1350 until early August. But then....watch out!

Forewarned is forearmed.

TF

About the Author

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

  229 Comments

JackPutter
Jul 10, 2013 - 3:40pm

@dgstage

That article was translated from spanish so it's a bit tough to read. The gold basis gets a bit of discussion on a Max Keiser show @ 12:22 here;

https://www.silverdoctors.com/max-keiser-antal-fekete-on-the-elimination...

I'm rewatching, and have to really concentrate to get a clue. The more often I reread and watch this stuff, the more sticks.

argent rampant
Jul 10, 2013 - 3:49pm

@SRSrocco

What's your take on SVM, Steve? They supposedly have a negative cost of production.

AGAU daveyboy
Jul 10, 2013 - 3:56pm

Er ! I think you spelled

Er ! I think you spelled Debka wrong

its spelled --- CNBS

Whoops CNBC ! (dang Glen Fiddick brain adjuster went wrong hic !)

argent rampant
Jul 10, 2013 - 3:56pm

When will there be enough people

saying "Enough!" to start to roll back the police state?

_________________________

From buzzfeed, the site Michael Hastings worked for. 6/7/2013:

https://www.buzzfeed.com/mhastings/why-democrats-love-to-spy-on-americans

"Transparency supporters, whistleblowers, and investigative reporters, especially those writers who have aggressively pursued the connections between the corporate defense industry and federal and local authorities involved in domestic surveillance, have been viciously attacked by the Obama administration and its allies in the FBI and DOJ.

Jacob Appplebaum, a transparency activist and computer savant, has been repeatedly harassed at American borders, having his laptop seized. Barrett Brown, another investigative journalist who has written for Vanity Fair, among others publications, exposed the connections between the private contracting firm HB Gary (a government contracting firm that, incidentally, proposed a plan to spy on and ruin the reputation of the Guardian’s Greenwald) and who is currently sitting in a Texas prison on trumped up FBI charges regarding his legitimate reportorial inquiry into the political collective known sometimes as Anonymous.

That’s not to mention former NSA official Thomas Drake (the Feds tried to destroy his life because he blew the whistle ); Fox News reporter James Rosen (named a “co-conspirator” by Holder’s DOJ); John Kirakou, formerly in the CIA, who raised concerns about the agency’s torture program, is also in prison for leaking “harmful” (read: embarrassing) classified info; and of course Wikileaks (under U.S. financial embargo); WikiLeaks founder Julian Assange (locked up in Ecuador’s London embassy) and, of course, Bradley Manning, the young, idealistic, soldier who provided the public with perhaps the most critical trove of government documents ever released.

The attitude the Obama administration has toward Manning is revealing. What do they think of him? “Fuck Bradley Manning,” as one White House official put it to me last year during the campaign."

robov
Jul 10, 2013 - 3:58pm

So My Question Is....

And I'm glad you picked up on this Turd. Because I keep reading Harvey's daily and what appears to be a rather serious 98K shortage in JPM'S vault For June delivery. Does this have any legs? Of course the other thing that Harvey keeps saying is that the gig is up when the GLD vaults are empty. It's become pretty clear that this just a source of gold for these criminal banksters and the fools purchasing the shares are the source of the dollars they use to stock it. What a perfect scam. Get a bunch of schmucks that think they are getting exposure to gold to invest their money into the ETF, use their money to purchase the gold for the ETF and then when you need a source or gold to deliver smash price shake out the schmucks and their dollars to raid the fund.

Gold Dog
Jul 10, 2013 - 4:02pm

robov

This came up in Santa's presentation. He says that the CME, et.al., won't let their exchanges collapse....too much money to be made. They will change the delivery requirements. It may be that cash settlement becomes a mandatory acceptable closure of the contract.

As info.

YF,

D

Save_America1st
Jul 10, 2013 - 4:05pm
AGAU
Jul 10, 2013 - 4:13pm

grandkids

Playing word games with a smart grand kid - making up a sentence with "big" words

the word was definitely (ok big words for a four year old !)

He goes " granpa do farts come out in lumps?"

I say "no of course not"

He goes

" well I have definitely shit myself "

har !!

monkry argent rampant
Jul 10, 2013 - 4:13pm

Roll back police state?

Are you kidding me? The whole damn city of Boston was applauding and spewing "USA!" to the jack-booted thugs that shut down an entire major US city, and entered houses at gunpoint FFS.

Fucking applauded them.


Jul 10, 2013 - 4:19pm

Jul 10, 2013 - 4:26pm
ancientmoney AGAU
Jul 10, 2013 - 4:40pm

@AGAU re: mines stockpiling . . .

"Any more hints of "stockpiling " by you mining chappies and I will send in the EPA and shut ya'll asses down

Jamie D

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

That would be one of the very best things that could happen for the price of gold and silver, though pretty bad for the mines themselves--though at these prices, it may be better than selling product.

Juggernaut Nihilism
Jul 10, 2013 - 4:45pm

LOL

Back from your vacation paid for with the donations from all suckers here who have been following your terrible advice? This has been sad to watch.

SilverTree
Jul 10, 2013 - 4:46pm
ancientmoney Juggernaut Nihilism
Jul 10, 2013 - 4:46pm

@Jughead . . .

Why do you watch, then?

ABQBear
Jul 10, 2013 - 4:48pm

Seeking Alpha

Worth re-reading their GOFO article released October 20th 2008 as well... the bottom would be in 4 short days later.

https://seekingalpha.com/article/100677-misinterpretation-of-gold-lease-rates-and-why-gold-could-rise

Past. Prologue. History. Rhyming. Etc.

ancientmoney monkry
Jul 10, 2013 - 4:49pm

@monkry re: police state . . .

Agreed--they even created a slogan: "Boston Strong."

The T-shirts were probably printed before the first tea kettle exploded.

SE treefrog
Jul 10, 2013 - 4:55pm

@ Treefrog

Regarding First Majestic - do you have a link that shows this? I went to https://www.store.firstmajestic.com/ - their sales software appears to be working, and they have silver priced at $23. Please confirm for me so that I can write them an appropriate suggestion for breaking from the paper metal charts.

tyberious
Jul 10, 2013 - 4:57pm

  Bernanke May Want to

Tyler Durden's picture

Bernanke May Want to Hint At July Tapering Move Now: Scotiabank

Submitted by Tyler Durden on 07/10/2013 - 15:32

Bernanke gives a speech today in Boston beginning at 4:10 PM entitled “The First 100 Years of the Federal Reserve: The Policy Record, Lessons Learned, and Prospects for the Future”. There will be a post-speech ‘Question & Answer’ period. This is an ideal time for him to fine-tune the Fed’s complicated message to markets. He can use this opportunity to send up a trial balloon for next week’s semi-annual report to Congress. We suspect Bernanke could even have his staffers leak questions to ask to those in the audience in order to frame and direct the conversation. We believe the Fed has drifted toward acceptance of tapering because of concerns about: 1) financial instability, 2) asset bubbles and 3) amassing difficulties for its exit strategies, not because economic nirvana has been reached. Therefore, we believe the decision to taper at one of the next two meeting is almost a certainty.

ancientmoney
Jul 10, 2013 - 5:01pm

GOFO negative . . . entails gold going toward infinity . . .

Negative GOFO indicates someone wants gold more than they want dollars. As this idea gets legs beyond the "smart money" it will likely end with gold "not for sale" at any fiat price close to current. This was explained by Another, and expounded on by FOFOA. Dollars now bid for gold, but will gold bid for dollars? At some point, no. We are approaching that point, as phyzz drains away.

ABQBear
Jul 10, 2013 - 5:06pm

Breakout attempt 6.

In progress...

Katie Rose
Jul 10, 2013 - 5:06pm

Farm/ Goat Update

Turd, Thank You! for the wonderful post. I am so glad I found this community. There are so many brilliant minds here that add to my knowledge and to my life…

Here’s the latest.

First off, I am freaking out. There are no bees here. Our greenhouses are filled with blooming plants and there are no bees to pollinate them. We have squash and melons and beans and so much more blooming right now. It is nearly impossible to walk around in them the plants are so happy. Yesterday there was one single bumble bee working away all by his lonesome. Today there are no bees at all. One bee is not enough to pollinate two 12 x 24 foot greenhouses!

We have a large orchard planted with rows of special orchard clover between the trees. This clover is specifically bred to attract bees. We have no fruit. Our 12 cherries, that’s right just 12 little cherries, have been eaten by the birds. Last year we made pints and pints of crabapple jelly (yum!!!!!), this year we have one single crabapple. That’s all, just one little crabapple. Our apple trees are devoid of fruit. In the fall we usually have a group of people over to make apple cider. It’s fun and everyone goes home with fresh, organic cider. This year we have no apples. 

The mason bees we grow for emergencies like we are having now were all eaten by woodpeckers. I thought they were protected, but the woodpeckers learned how to get their beaks through our wire cages whose purpose it was to keep them out. Woodpeckers love mason bee larvae. And they ate them all.

I just spoke with a friend. Her orchard is doing fine. But the majority of reports I am hearing is this year between freak frosts and no bees, fruit is mighty scarce in local orchards. And there are lots of organic orchards along the Columbia River providing fruit for the big cities to the west.

I am also weaning the baby goats today. They are so loud I am sure they can be heard a half mile away. They are screaming!!!! WOW! They have buckets and buckets of water to drink, but are not interested. They want water from the baby bottles. My idea of slowly weaning them was a big flop. It was just a lot of extra work.

So I am trying to outsmart them. I put half of their water buckets on the other side of the fence in with the bigger goats. And sure enough, five little heads poked/ strained through the fence trying to see what was in the buckets. The big girls came over and butted them back through the fence to their side, and so the war for water has begun. And it is a noisy war! The babies have plenty of water on their side of the fence, but are totally disinterested in it.

So we have Wild, Wild West Water Wars in full swing on our little farm....

I’m hoping they don’t tip over the buckets of water, as it is over 95 degrees outside, and they need that water. However, goats are like people. They are always ready for a good head butting. And the baby’s heads are every bit as hard as the bigger girl’s heads. So it is a very noisy water war on the farm right now….

The Watchman
Jul 10, 2013 - 5:07pm

GLD Continues to be DRAINED-0.68 TONNES GONE

Tonnes939.07

Ounces30,192,195.27

Value US$37,913,885,843.09

The Watchman
Jul 10, 2013 - 5:16pm
ancientmoney
Jul 10, 2013 - 5:21pm
agNau
Jul 10, 2013 - 5:24pm

The people of Zimbabwe, Argentina, Venezuella, Cyprus, and......

the next dominoes....... would have been quite happy to send Turd on vacation. had they held their assets in real currency. this system is no different. it will end as all others prior. perhaps you should explain to them how "smart" they were holding to their currency.....better yet explain to us how smart that move was.

benque
Jul 10, 2013 - 5:32pm

I watched the Susan Lindauer video....

Will Dick Cheney now invite me to go duck hunting with him?

SRSrocco
Jul 10, 2013 - 5:35pm

REPLY @ SILVER CORP METALS - SVM

There is still a big misunderstanding about what it costs to mine silver or gold for that matter. If you have not yet read my article on this subject, please check it out below:

SILVER MINING COSTS EXPOSED: Cash Cost Fallacy

argent rampant... again, even if a mining company states that they have a negative cash cost to mine silver, doesn't mean they mine silver for free. All CASH COST accounting means is that you take your by-product credits and deduct them from your production costs.

So, the higher the amount of by-product credits the lower the Cash Cost. Now Silver Corp for example, they used to have a negative cash cost, but it is now positive:

Q1 2013 Cash Cost SVM = $0.48

Now, this low cash cost was when the average price of gold was $1,620 and Silver $29-30... and lead and zinc were much higher. Furthermore, SVM has 32% of its revenue by-product credits:

Q1 2013 Break-down YEAR-END SVM (for whole year)

Silver = $117 million

By-product = $54 million

SilverCorp is actually in my top 4 primary silver miners in profitability, but ever since it had that run-in with the Chicken-little short, their stock price has not yet recovered.


Jul 10, 2013 - 5:39pm

@gold dog

Thank you for taking the time to share what happened at the Sinclair meeting. You used your business resources, time and money to share with others. Once again, you have demonstrated that you give as much or more than you take. Thinking of others is a sign of a true gentleman and a distinguished man of enlightenment. 

The guys with the dockers and t-shirts realize that their entire wealth is on the line. They come early, stay late and ask the hard questions. the guys in the tie's were just taking lunch break from the COMEX.

Jimymac SRSrocco
Jul 10, 2013 - 5:41pm

One is telling the truth and

the other is bald face lying. To much evidence suggesting Shanghai is delivering. Comex on the other hand cannot be trusted. Ask Kyle Bass https://www.youtube.com/watch?v=CjAeriVttw0 . If you can't trust that they have the physical, then you can't trust the numbers. Any analysis using the COT is flawed.

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