Furious Friday

Fri, Jul 12, 2013 - 12:44pm

Time has really gotten away from me this morning so we'd better get started and move along quickly.

For the third time this week, price was effectively capped when London began trading this morning. Again, with this such a recurring pattern, why anyone buys gold futures at midnight or 1:00 am in NY or afternoon is Asia is beyond me. You're going to get your ass kicked more times than not. It happened again last night and here we are, struggling to regain the dollars clipped by the London Monkeys.

Note how the tone for the day is often set in London. If The Monkeys take the day off, price rallies all day through the Comex session. If The Monkeys intervene, price struggles all day. Today is another struggle day.

Though it's nice that prices have rallied, don't go getting too excited just yet. As mentioned yesterday, gold needs to get back above $1350 at a minimum and silver needs $21+ before the spec shorts will begin to get nervous. And all of this Bernank stuff could get yanked right back out next week...in fact it's likely that it will. The Bernank will be in front of Congressional committees again next Wednesday and Thursday as part of his semi-annual updates. https://www.foxbusiness.com/news/2013/06/13/bernanke-to-deliver-semi-annual-testimony-to-congress-july-17-18/ Would you be at all surprised if he turns around and is all "taper taper taper" next week after the reaction to his speech and comments this week? I wouldn't. And you know that the spec shorts will be eager to pounce if given the chance.

Did you notice the huge addition to the SLV last night? The sham picked up 90 tonnes, almost 3 million ounces of silver yesterday alone. WOW! And total "inventory" now rests at 10,125 metric tonnes. Hmmm. Keep in mind that on 1/2/13, the total SLV "inventory" was 10,085 metric tonnes. Some quick math shows that now the SLV is actually UP 40 tonnes YTD. UP!!! All the while, the price of silver has fallen by over 30% from $30 to $20. That wouldn't be too remarkable I guess if the GLD hadn't shed over 30% of its "inventory" over the same time period as its price fell from $1700 to $1300. Whatever...

With all of the bacon lovers around here, I would be remiss if I didn't bring to your attention the current happenings in the Lean Hogs market. It seems there is a very nasty swimming in the "Sus" pool and it's wiping out nearly an entire crop of baby pigs. If a piglet contracts the virus in the first three weeks of life, the mortality rate is 100%. Yikes! https://www.thestar.com/news/world/2013/07/11/pig_farms_hit_by_devastating_virus.html As you might imagine, this has had a rather dramatic impact on the Lean Hog market. It hasn't yet reached the point of signal failure but you need to watch it closely, if anything because, if it continues, even the canned variety of bacon is going to be getting much more expensive.

And speaking of culling the population, you may have heard me mention to Felix of GoldMoney that I'd recently read and very much enjoyed the new Dan Brown book, "Inferno". (Even though the middle third is long on architecture and short on action.) The plot deals with the mathematics of population growth and I found it metaphorical to the mathematics of debt growth. Anyway, it's a fun summer read and if you're looking for something to take with you on vacation, I give it a hearty thumbs up. My next purchase will be the new Brad Thor book, "Hidden Order". Brad's books are always entertaining and I'm sure this one is no different. If you're interested in picking up either one, click the link below. (Turd gets a little commishkey, too, if you do.)

The GOFO rates that everyone is watching continued negative for an unprecedented fifth straight day today. If you want to follow along next week, you can find the rates here: https://www.lbma.org.uk/pages/index.cfm?page_id=55&show=2013 Again, what this purports to demonstrate is an incredible demand and desire for physical gold, such that it is currently more valuable than holding dollars. Physical holders are unwilling to exchange their gold for a futures contract, even though they are guaranteed a significant short-term return. Why is this? Because physical holders either do not trust the system or there simply isn't enough gold available to close his hole. Either way, the past three occurrences of negative GOFO have led to sharp, short-term rallies so many pundits are watching this closely. We'll see...

And, finally, another CoT is due at 3:30 today. For the reporting week, gold was actually UP $4. I know that's hard to believe given the blasting it took a week ago today...but, seriously, it was. And the total gold OI rose again, this time by another 21,000 contracts with much of that coming on 7/3 and 7/5, while price was getting whacked. We should expect another "improvement" in the CoT structure. Last week, The Gold Cartel was net short just 22,000 contracts or 70 mts of paper gold. Could today's report cut that number in half??? Maybe? Probably. Again, we'll see.

OK, that's all for now. I gotta go cuz I got more stuff to do. Have a great weekend but be sure to check back later today or tomorrow for some instant analysis of the CoT.


About the Author

turd [at] tfmetalsreport [dot] com ()


Jul 12, 2013 - 12:47pm



Fat Willie
Jul 12, 2013 - 12:50pm

Just missed it! Dammit!

Oh well. Back to the beer!

Jul 12, 2013 - 12:50pm
Jul 12, 2013 - 12:51pm


Ahhhhhh Turdville....

Jul 12, 2013 - 12:51pm

I going to sqeem qnd sqeem

I going to sqeem qnd sqeem til im sick cos i missed the first slot!!!!@!

Jul 12, 2013 - 12:51pm



Jul 12, 2013 - 12:58pm

No cheater

I read the post and the pig link first.

Howard Roark
Jul 12, 2013 - 1:02pm

No cheater2

And even hat tip Mr. Turd!

Keep struggling,


Jul 12, 2013 - 1:06pm

Top 10?

Brad Thor has interesting speculation in one (probably more than just one) of his novels on what an organization with unlimited eavesdropping and espionage capability might be able to do -- such as front-run markets, do insider trading, blackmail market-makers/participants... and eventually gather enough funds in off-shore, secret, double-blind shell company structures to emancipate itself from its previous owners -- becoming completely autonomous, accountable to and dependent on noone... From a previous post:

Black List from Brad Thor, which the author seems to call 'faction' [note -- I changed some of the terms used]:

"For years ATS [substitute other alpha-acronym] had been using its technological superiority to conduct massive insider trading. Since the early 1980s, the company had spied on anyone and everyone in the financial world. They listened in on phone calls, intercepted faxes, and evolved right along with the technology, hacking internal computer networks and e-mail accounts. They created mountains of ‘black dollars’ for themselves, which they washed through various programs they were running under secret contract, far from the prying eyes of financial regulators.

“Those black dollars were invested into hard assets around the world, as well as in the stock market, through sham, offshore corporations. They also funneled the money into reams of promising R&D projects, which eventually would be turned around and sold to the Five-Sided-Building or the CentralIA.

“In short, ATS had created its own license to print money and had assured itself a place beyond examination or reproach.”

Speculation on Snowden: pundits are saying Snowden is a 'headache' for Kremlin - if they allow him to stay, it damages relationship with US, if they hand him to US they look like wimps. Could Ed's renewed asylum request be a bargaining chip -- transport him (by Russian sub, military plane, boat, whatever) to Latin American asylum offerers without risk of interdiction by USAF/USN or allied/controlled countries, to avoid the conundrum above?

Jul 12, 2013 - 1:07pm


Is it possible that JPM is acquiring all that physical silver in order to do an offering in SLV, the same way Sprott has to buy 300million in phyzz before he can offer more shares in his fund?

Is it possible that JPM acquiring physical silver is bad for all of us, because that is what I have to believe. That was my initial reaction, and I see no reason to change it?

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