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

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turd [at] tfmetalsreport [dot] com ()

  229 Comments

SilverSurfers
Jul 11, 2013 - 10:25am

Atheists

American Atheists Atheists United Sirs, I am running for the 2016 Presidency, and I am Christian. Please dont throw yourselves on ground, just yet. As a patent lawyer, I comprehend the whole devising new words and meaning for the purpose. As an engineer I seek solutions. As a military commander, I remain flexible for the objective. As a candidate for public office, I seek your support, for many good reasons. Your religion is Nature. Your GOD is Mother Nature. Your faith is a belief in Mother Nature As such, you can join and take your place as the sixth great earthly religion, if you choose do to so. Its just a matter of definition and an attitude adjustment, being flexible in your thinking. When it come down really to it, there is in fact, so little difference in practice and in the eyes of the law. You can then say the pledge the allegiance to the country without a sense of betrayal or shame. You can then be on equal lawful and moral footing with all others of the five great religions. It just a matter of teachings, words, definitions, attitude adjustments, and your choice to do so. Alternatively, you can fight ridiculous fights and bankrupt your treasury on lawyers. You all will get a fair shake from me, but here is deal. All religions, as defined above, including yours, must be tolerant and respectful of others, but expect liberty to believe as you choose with equal protection under the law. It really quite simple, actually. I hope I can have your support, and that you will respond. Notwithstanding, you now know my platform on this issue. Sincerely, Derrick Michael Reid.

My friends,

The 21st century is part of the information age. And though communications methods have changed over the many years, messages remain the same, to touch the heart of the downtrodden and to add strength to the inspired, to build God's kingdom on earth. I invite inspirational words from five faiths, consisting of Christian, Muslim, Hindu, Jewish, Buddhist, to offer any words desired which will be made public under any assumed name.

I kindly ask those of faith to say some kind inspiring words to nation which is now taking notice. Please kindly state your words in four sections, Vows, Scriptures, Prayers, and Wishes. Christian believers use "Father", Jewish believers use "Rabbi", Islam believers use "Imam", Hindu believers use "Mahatma", Buddhist believers use "Lama", Naturalist believers use "Teacher", all as simple references to faith without any disrespect intended. Your words will be publicly posted under any selected pseudo-name or online-handle or real-name you wish.

One, two, three, and preferably four responses from each of the five faiths is desired for offering inspiring words for personal and national inspiration, and these words may be publicly posted in the blog TOTALITARIAN DEMOCRACY. Please send me your words of faith, if you wish, for incorporation therein. Thank You.

Totalitarian Democracy https://totalcontrol.blogtownhall.com/

The Post: Title: USA, One Nation Under God

The Entrance by Derrick Michael Reid: Knock Knock Knock, upon the door and then entry into the House of Our Lord, and before seniors of His House. I, Derrick Michael Reid, come before you all this day, and ask for your intercession with the Almighty, for His Blessings, His Mercy, and His Strength in the Cause Ahead, and for the Challenges to come, and for the Proclamation of Victory, so as to unite the country, as I go into political battle, with a noble cause, before the nation, to seek the 2016 US Presidency, so as to help this nation to a better state. I ask you all kind sirs, upon my humble knees for your vows and promises, scriptures and teachings, prayers and virtures, and well wishes for inspiration to conquer all prospective impediments, to privately and then publicly repeat your tendered words, publicly presented to all, so that all may know that this campaign shall be for and inspired for His Glory, and for the good of the nation and for the good of man kind, if you all would be so gracious to honor me and this cause with your kind words of inspiration.

Father
Vows
Scriptures
Prayers
Wishes
Rabbi
Vows
Scriptures
Prayers
Wishes
Mahatma
Vows
Scriptures
Prayers
Wishes
Imam
Vows
Scriptures
Prayers
Wishes
Lama
Vows
Scriptures
Prayers
Wishes
Nature
Oaths
Teachings
Virtues
Wishes

These words have been solemnly repeated by me and are now made of public record in my personal blog, so that all may know the inspiration behind my campaign for the 2016 US Presidency.
Sincerely, Derrick Michael Reid


(Any person of strong faith and belief, with excellent knowledge of scripture or teachings may be inserted above and may add his own inspiring words. The person must be a real individual, having suitable high moral character, and a believer in GOD, for the pledge of alligiance to the Flag and the Country, where GOD may be be translated simply as Mother Nature, in any of the Six faiths, Christian, Jewish, Hindu, Islam, Buddhist, and Nature.)
===

I have already announce my desire for the job of finding solutions.


Jul 11, 2013 - 10:27am

constant racist barrage

any excuse to air your 'colour' - sick of it, beyond sick of it. I think I will adopt a Round Goby.

DayStar brennan
Jul 11, 2013 - 10:36am

RE: Lindsey Williams

Brennan, thanks much for those links. RE: Lindsey Williams. The last few times I heard Lindsey, he was a lot better at getting to the point, and he didn't do those horrible teasers where he hinted at something big and then went off on a tangent, leaving you hanging and maybe having to listen an hour for 30 seconds of information. I think he has gotten a lot of criticism for his style, and he has cleaned up his act some.

Rui
Jul 11, 2013 - 10:40am

Gold is up 2+%

And that's 5 straight-up days, let's see if EE pulls their 1% rule out in the coming days.

agNau
Jul 11, 2013 - 10:40am
AGAU Zoltan
Jul 11, 2013 - 10:50am

Zoltan

Right on Z

But hey, if us guys went that route the liquor companies would go broke - har

Fizz
Jul 11, 2013 - 11:14am

What's the point

I understand the above post but after reading am scratching my head. Why be in bullion if this happens all the time. When will it stop?

Nick Elway
Jul 11, 2013 - 11:41am

re: gurus Joel Skousen

https://www.worldaffairsbrief.com/

Joel's uncle W. Cleon Skousen wrote "The Naked Capitalist" years after "The Naked Communist" when he realized the communist party took direction from the same people that direct the western governments. Joel sends out an email "brief" once a week to his paid subscribers (inexpensive) and will send you the latest at no charge if you email him.

AGAU Mantis
Jul 11, 2013 - 11:53am

"gobies"

Har more like a coupla one eyed flounders 

oops sorry darlin I thought you were outside hic!

achmachat
Jul 11, 2013 - 12:09pm
ancientmoney
Jul 11, 2013 - 12:18pm

Bernanke put his "tapering" finger too close to the flame . . .

From Kitco last night:

"in the last 10 minutes of the electronic open Gold spiked to new highs following comments from Bernanke saying that "Highly accommodative monetary policy for the foreseeable future is what's needed in the US economy".

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

Just a short few weeks ago, the economy was all better. Jobs were flying off the shelf, business was booming, the recovery in full swing. Soon, we would be back to 2006 again. Benjie announced all was so swimmingly that he could taper down QE.

Mission accomplished, as he got gold and silver to tumble. However, he also caused the bond market to wake up, and realize they were at or very close to the tippy-top of bond valuation, and it's a long slide down the other side.

So, he now admits there is no tapering to come. Likely bigger bond purchases will soon arrive at an auction near you. Yes sir, its liquidity we need, not tightening.

About, face! March! About, face! March! About, face! March! ad infinitum.

agNau
Jul 11, 2013 - 12:19pm

currency"safe haven" bs.....

still acting as road block potentially... hoping it is the gap still needing a fill.....

DirkDirkler
Jul 11, 2013 - 12:29pm

LBMA Backwardation

Just checked, there really was no backwardation in gold in any of the data going all the way back to the 90ies. Not even in 00/01 or 08/09 when prize was way to low.

So: good catch Mr. Turk, it surely is important news, and let's see how this plays out.

I suspect, no, I know there's backwardation in silver also, since that's the reason they stopped publishing it, because most of the time we'd actually be in backwardation. Which is not very favorable data for the current financial system and its operators.

ancientmoney
Jul 11, 2013 - 12:31pm

Snippet of Skoyles article on SGE . . .

"Questions over the legitimacy and transparency of COMEX and the London Gold markets are now becoming louder, especially as increasing numbers of institutions are keen to know what actually backs those contracts. ‘Paper gold’ is on everyone’s lips.

When it comes to the SGE, there seems to be little concern over the presence of physical gold, given the increasing volumes of activity in the three largest contracts, two of which are available for immediate delivery. Delivery ratios are significantly higher than those on COMEX, showing the far higher of physical participation in this market.

Whilst the gold price is unlikely to be powered by the SGE, as long as the vast volumes of paper gold exist on both COMEX and London, we do believe that the SGE could end up driving the wedge between the paper gold and physical gold market, and therefore disparities in price between what market participants would deem two different products.

Physical gold demand in the most populated country on earth does not seem to be subsiding, yet neither do COMEX and futures volumes generally.

We believe that as increasing numbers of Westerners look to take delivery of their gold from Western exchanges, there will be more pressure on the physical market. China’s primary physical exchange, as we see from delivery data, is the liquidity hub with the best reputation for such demand.

In this brief look at the China gold market, we have not presented either wholesale or retail premiums.

However anecdotal and media reports show that this is an ongoing phenomenon. Unlike investors in the West, Chinese housewives just want physical gold regardless of the price. This is clearly evident in the delivery data on the SGE, unlike in the West where we see gold as an investment which we hope will climb in price, the Chinese see gold as a way to free up devalued cash and place it into a real store of value.

We are watching a fascinating battle play out between this army of Chinese retail buyers and the specs in the West. The future of the gold price is there for the taking."

https://www.kitco.com/ind/Skoyles/2013-07-11-Inside-The-White-Hot-Chinese-Gold-Market.html

Bollocks
Jul 11, 2013 - 12:45pm

The revolving door of corruption.

Jailed Journalist Barrett Brown Faces 105 Years For Reporting on Hacked Private Intelligence Firms

Michael Hastings is mentioned right at the end of the interview. Maybe he did have had some info that he was about to spill.

https://www.democracynow.org/2013/7/11/jailed_journalist_barrett_brown_f...

(listen from 50.50 if you don't have 20mins free)

The Vet
Jul 11, 2013 - 1:16pm

Short Interest % of float... GLD vs the majors

ABX = 2.1%

NEM = 3.6%

GG = 0.97%

GLD = 9.5%

Shortsqueeze.com doesn't show the % short for ETFs as the number of issued shares varies with redemptions, but you can get the total shares issued from the GLD site (312,400,000) and divide it into the short interest (29,587,400).

This percentage short for GLD looks to be the highest I've ever seen but I can't find any site that graphs it over a period.

https://shortsqueeze.com/?symbol=GLD&submit=Short+Quote%99

https://www.spdrgoldshares.com/usa/financial-information/

Quick note: Those shorted GLD shares are equivalent to 89 tonnes of gold (real metal) short which either has to be covered in the market as shares or bought and delivered by the APs to bring the shares being traded back to being fully backed by the gold in the vault.

SilverSurfers
Jul 11, 2013 - 2:28pm

So

Do we root for the FED to trash paper money, and hence, create the greatest transfer of wealth to real money, and the reset, or do we complain about ZIRP QE as damn foolish, while stacking like crazy for the best sure-play long term profit game around?

Or is rooting and complaining, really exactly the same thing, -180 = +180 but being more honest with yourself about it all. :o

Gino Vanelli - Black Cars 1985
Boswell
Jul 11, 2013 - 4:20pm

More Bees...

A friend of mine belongs to this group...

https://www.backwardsbeekeepers.com/

"We're a group of organic, treatment-free beekeepers in Los Angeles, with branches now forming in other cities.

We're "Backwards" because we rely on observation and natural practices to keep our bees thriving rather than pesticides, chemicals, or treatments of any kind.
Want to know more? Look in the "key posts" section just below."

NonoverlappingMagicCereal
Jul 11, 2013 - 5:13pm

I can see why folks find Sinclair so compelling

His predictions have so many details, which makes them sounds so much more convincing, like he really has a handle on how all the dominos fall. What a bunch of baloney. I hope his acolytes print out those predictions and look at them 1 year hence (or hell, look at predictions from a year ago today).

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