Riding The Line

Mon, Aug 4, 2014 - 12:10pm

As expected, prices have begun the week weak. Remember, that's OK. We are simply "riding the line".

That gold has slipped back below $1290 this morning should come as no surprise. We discussed this late last week and again on Saturday. That silver is falling toward $20 is also no surprise. We've been expecting that, too.

Again, over the course of the next week, gold will be working its way into and through the blue oval on the chart below. What I expect is continued support as it "rides the line". There may even be some intra-day drops below the line, below $1280 and toward $1270. However, as we move into next week and the middle to late stages of this month, I expect price to turn, having used the main trendline -- that had been resistance -- as support, instead.

Bolstering my confidence is the ongoing drop in GOFO which, after being positive in the one month rate for 53 consecutive days going back to May 20, has slipped into negative territory again today. It has fallen quite quickly, as a matter of fact. Just one week ago today it was +0.104%! The two-month and three-month rates are falling fast, too. Again, this is hardly surprising given that August is a Comex delivery month and it clearly means that readily-leasable gold is in short supply again. This will inhibit The Cartel Banks' ability to raid and suppress price and is one of the factors that will cause gold to reverse over the next few days.

Last week, we also discussed how silver, having broken down through $20.60, didn't really have much support until down near $20. So now here we are, at $20.23. As gold rides the line and slides lower this week, expect silver to drop, as well. However, my main support/buy zone is between $19.80 and $20.20. This is what I've been waiting for and I'm going to get it this week. As you can see, though, even a drop to $20 won't take silver down and back below its main, primary 2014 trendline. So, I expect it to reverse with gold, sometime very soon.

And many of you have been watching the HUI and waiting for it to fall far enough to close the gap on the chart from June 19. Well, your wait is almost over! Expect strong support in the black rectangle of the gap and around the 100-day moving average. Watch for the momentum trends to flip and then you can feel confident about another leg UP in the miners. Note that this, too, coincides with gold and silver needing about one more week of churn before turning higher.

The latest Coin Contest concluded last Wednesday. It was a very competitive contest and their were several of you who made outstanding guesses. However, there can only be two winners and they are:

GOLD: Low tick was $1287.50 on 7/24. "Saratogaprepper" guessed $1287.59.

SILVER: Low tick was $20.35 on 7/24 and 7/25. "Blackshook" and "08GoldWing" both guessed $20.33. The winner by virtue of the HUI toebreaker was "Blackshook".

Saratogaprepper and Blackshook, please email me your shipping info at tfmetalsreport at gmail dot com and I will pass it along to the good folks at JMBullion, who provided the prizes for this contest. Again, please be sure to keep them in mind for all your bullion needs! https://www.jmbullion.com

Finally, please let this serve as your first reminder...

Next week, we celebrate our first anniversary of "The Vault". This means that quite a few of you will be up for annual renewals of your subscription. This is set up to occur automatically so, if you do not wish to remain a member or if you wish to switch to monthly, you need to go in and cancel your current subscription before August 14. You can do so by accessing your profile page and clicking the "subscription" tab. I'll try to remind you all of this again later this week.

OK, that's all for today. There won't be a podcast later but, good Lord willing, we will return to a regular and full schedule tomorrow.


About the Author

turd [at] tfmetalsreport [dot] com ()


Aug 4, 2014 - 12:12pm


I win bitches

Aug 4, 2014 - 12:17pm

lol - yes you do

It Is Much Bigger Than You Think

By: Bill Murphy, LemetropoleCafe.com -- Posted Sunday, 3 August 2014

There are two mistakes one can make along the road to truth - not going all the way, and not starting." ... Buddha


The gold price manipulation scheme will go down as the biggest financial market scandal in US history for numerous reasons. They include the destruction of the free market system in the United States. The manipulation of the gold and silver prices eventually led to the manipulation of US interest rates via the Fed, the stock market via the Plunge Protection Team, and to the currency markets. GATA has been on this case for more than a decade, pounding the table about what was going on. Because there is no free financial market press, our views, backed up by as much evidence as any prosecutor would have in a slam dunk murder case, are not allowed to see the light of day. CNBC, on which I was interviewed by Ron Insana in February of 1999, has boycotted us. So has BNN in Canada. Veteran Bloomberg gold reporter Claudia Carpenter, whom I met in the spring of 1999 in New York, told John Embry, Chris Powell and I in London in 2010 that she cannot mention GATA. And she and Bloomberg never have. It is the rarest of times when Reuters will mention GATA, even though we have been in contact with them for 15 years. I could go on and on. But, perhaps the most telling was the email my colleague CP received from the Financial Times that our subject was "too sensitive" to make mention of … as in we are too right!

Actually, GATA has been on this case for 15 ½ years. And guess what has surfaced the past few years? One financial market scandal after another about market manipulation. Can you say Libor? Can you say the trillion dollar scandal about "rigging" in the forex market? And then we have the mounting lawsuits and charges over the London gold and silver Fixes.

And yet with all the evidence GATA has collected about the manipulation of the gold and silver markets, we are still persona non grata with the press, and even the mainstream gold community.

So, what’s the deal?

One of my favorite quotes emanates from CP: "The United States would rather reveal its nuclear secrets than what it is doing in the gold market."

It is THAT big a deal!

My old colleague Frank Veneroso, who wrote the brilliant Gold Book in 1998, told Sprott’s John Embry and I many years ago that the gold price suppression scheme was "much bigger than you think." Frank found out the US Government was taping his phone calls and ever since has shut up about what GATA has to say. Frank was the one who exposed the gold leasing scheme, which is how The Gold Cartel did their thing so many years ago. It is how GATA knows the central banks have well less than half the gold they say they have in their vaults. Frank got his information from a Bank of England source who has since died.

While Frank (known as a Wall Street Whiz Kid in the early 1980’s) made a deliberate decision years ago to quietly disappear from the gold price suppression scheme issue, other widely recognized investment mavericks go ballistic when the subject is brought up…

*Not long after GATA was formed, I saw the very visible Bill Fleckenstein on TV and thought this against the grain maverick would be perfect to enlist into the GATA camp. But he went bonkers about the issue when I spoke to him on the phone. A bit bewildered by the tone of his voice, I searched the internet to get a clue why. The answer came right away. The one sponsor of his new internet site: JP Morgan.

*Which brings us to the widely seen Jim “Mr. Bowtie” Grant. A relative of a Café member here in Dallas did an interview with T. Boone Pickens for his newsletter years ago, which turned out to be the most popular one ever. The interviewer, whom I had met, suggested me (GATA) to be his next one. Grant blew up at the idea. End of story.

*And that takes us to the veteran Doug Casey, who called the gold price suppression scheme people "ridiculous" in a Kitco interview. Not content to leave that alone, he went out of his way recently to blast the GATA camp at a Sprott Global conference … indirectly calling those who see the gold world our way "idiots." Now, this is truly bizarre as Eric Sprott and John Embry of Sprott Asset Management are two of our biggest supporters. What can that guy be thinking of and why does he go out of his way to be so insulting?

Fleckenstein, Grant, and Casey are known for their individualistic thinking outside the box. Yet when it comes to what GATA has to say, they erupt. While they are all individuals, as a group it is about taking on "all the money and power in the word." They like to be known as "edgy" in the establishment world, but not to be known as taking them on. Think of them as wearing the flashy pants at a conservative country club. Yet what they don’t want is to get thrown out of the club for being unacceptable.

Is what GATA has uncovered bigger than what these four iconic people of sorts want to deal with? I think so. Because each year it is becoming more apparent that we don’t have free markets anymore in the U.S.; nor a free financial market press, and the control has escalated to even manipulating the financial market data.

What is evolving here is a massive breakdown of our financial market system and eventual chaos in our economy because of this orchestrated control. The United States has become the avant-garde communists of the day. How ironic that we fought them and their "system" for so long only to end up doing so much of what they did. The tragedy is that it will all blow up down the road and the average American, who is clueless of what is going on, will be devastated.

When it comes to the extent of all this manipulation, GATA is not alone…

Is All of Our Financial Data Manipulated?

Author : David Schectman
Miles Franklin
Published: August 1st, 2014

Sprotts Thoughts published a recap of their recent conference held in Vancouver. I want to comment on a portion of what Henry Bonner wrote:

Andy Schectman, who started the precious metals coin dealer Miles Franklin alongside his father, struck a chord: Is gold being knocked down on purpose? "Who in their right mind sells that much gold all at once?" he asked, referring to the massive dumps of gold futures into the market last year.

Doug Casey would kick up controversy by taking on this issue later on.

Doug categorically denied the notion that precious metals were being controlled in his Friday talk. The powers that be "don’t care" about gold, he said, "they don’t consider it money." And besides, prices are manipulated anyway by market participants, as that is how markets work, but not suppressed by governments and bank cartels.

-Sprott Global.com, July 30, 2014

Within our industry there are a few people who strongly disagree with the premise that the price of gold and silver are manipulated or that there is some kind of government or Fed-led conspiracy to hold prices down. As mentioned above, Doug Casey is in this camp, and so is my friend Trader David R. I have taken heat in the past for presenting David R’s views. My response was that we like to consider both sides of the issue.

We have a strong relationship with the folks at Casey Research and respect what Doug has accomplished along the way. I have no problem with his view that gold and silver are not manipulated – I just don’t happen to agree with him. Our friends Chris Powell and Bill Murphy at LeMetropole Café tend to agree with our view. They are at the forefront of the "manipulation is real" issue. One thing I can say about both Casey and the LeMetropole Café boys – they are all sincere with no hidden agenda. They are still pro-gold, but they build their case without lending credence to manipulation.

Frankly, I am surprised that Doug Casey takes the position that he does. He has been heavily involved in the gold newsletter and investment industry since the 1980s. I spoke at a seminar in Hong Kong with Casey in the mid-80s and he was one of the "gold bugs." But just because people like Casey and Trader David R are convinced that gold is not manipulated (or no more than any other commodity) they are still both very gold-bullish. They just believe that gold and silver are assets worth owning without relying on the "manipulation." So I am not bothered by their views

Andy Hoffman and Bill Holter get hot under the collar when people like Casey and Trader David R express their views. How can they possibly believe that gold and silver are NOT manipulated when there is so much evidence to the contrary? A good point, and I feel the same way – but I don’t let my blood pressure rise when people who understand the importance of owning gold and silver happen to believe that the bull market in both metals will reach extraordinary heights, without using conspiracy or manipulation to build the case upon.

Our readers know all the arguments by now. I present the conspiracy/manipulation view every time I write. I find it hard to believe that any intelligent and logical person can look at the FACTS and come to another conclusion, but since when is there 100% agreement on anything? The real question is "What do YOU think?" We feel that we give you all the information you need to not only own gold and silver, but to feel comfortable that you have made the correct decision, and we are certain that you will reap the rewards of being right, while most Americans will be wrong. Just remember, Casey and Trader David R are on our side and they are bullish too. They are not the bad guys.

Speaking about manipulation – how about yesterday’s media blitz praising the strong economic numbers for the second quarter. Read what Zero Hedge has to say about this in the Featured Articles section. In the past year, over half of U.S. growth is from INVENTORY ACCUMULATION. All of our financial data is manipulated by our "no longer free and objective" press. It’s not just gold and silver, but the government’s data and the news put forth by the media. Even my wife, who is well read and very savvy said to me, "What do you think about the strong economic growth?" after reading about it in the newspaper. I had to explain it to her – and if she was unaware, I assure you, 99.9% of all Americans are unaware of what is happening.


Sounds familiar, eh?

Yes, it is hard to understand how anyone with an open mind, and has taken the time to review all the evidence about all this manipulation, doesn’t agree with the obvious. These days hardly a week/month goes by without a collusion scandal surfacing. It is an epidemic.

GATA is short for The Gold Anti-Trust Action Committee. We were formed to expose how certain bullion banks like Goldman Sachs and JP Morgan were violating anti-trust laws by suppressing the gold price … hence our name. Eventually we realized the scheme was bigger than WE thought and included the Fed, Treasury, BIS and other central banks.

So, look what surfaces a few days ago:

Democrat & Chronicle

Kodak alleges aluminum pricing conspiracy

https://www.gannett-cdn.com/-mm-/841f2ab05b5b9c645b044c97db0638d65fec201a/c=2-3-128-129&r=1024x1024&r=26&c=26x26/local/-/media/Rochester/USATODAY/2014/07/23/1406125852000-matt-daneman.jpgMatthew Daneman, Staff writer 10:16 p.m. EDT July 29, 2014

Eastman Kodak Co. has joined a long line of companies accusing a collection of financial and commodities giants of colluding to artificially pump up the price of aluminum.

Kodak filed a lawsuit in U.S. District Court for the Western District of New York, complaining that such parties as Goldman Sachs Group Inc., JPMorgan Chase & Co. and the London Metal Exchange Ltd. were part of a conspiracy to violate the federal Sherman Antitrust Act and New York's Donnelly Law.

The defendants are facing dozens of similar such suits that were filed around the country before being consolidated in December 2013 to the Southern District of New York and Judge Katherine B. Forrest.

Rochester-based Kodak said its suit is largely based on news releases and media reports about those suits and about federal regulators and lawmakers increasingly looking into the issue. Assistant Attorney General for the Antitrust Division Bill Baer told the House Judiciary committee last November that "this is a matter we are looking at."

The Kodak suit also cites global aluminum production and consumption data to argue that "there is a substantial oversupply of aluminum, especially considering the vast supplies of aluminum held in warehouses."

Kodak alleges the defendants hoarded aluminum in warehouses and periodically swapped their holdings among one another "in order to add to the artificial scarcity and conceal the conspiracy."

A JPMorgan spokesman said Tuesday the company declined to comment. In a statement Tuesday, Goldman Sachs called the Kodak suit "without merit and we intend to vigorously contest it."

Kodak is a big user of aluminum for its lithographic printing plates. While the company says it has had to pay artificially inflated aluminum prices because of the conspiracy, Kodak in its suit did not have an estimated amount of how much it has been harmed. Its suit asks for unspecified damages.

Among the defendants are Metro International Trade Services LLC, Pacorini Metals USA LLC and Henry Bath LLC, which own and operate various London Metal Exchange-certified warehouses; and Glencore Xstrata PLC, a commodities trading and mining company.

In the face of growing criticism from industrial customers about supposed raw material collusion, as well as the Federal Reserve last year saying it would review a years-old decision that lets banks into the physical commodity business, JPMorgan in March agreed to sell its physical commodities business.


Well hello!

A decade and one half later after GATA’s inception the same names keep surfacing when it comes to conspiring and manipulation.

JP Morgan is something else. First of all, it is the Fed’s bank, which directly links them to the gold price suppression scheme. And if there is a financial market scandal, their name almost always pops up. As of August 2013, the Department of Justice had 8 ongoing investigations into JP Morgan. Does Madoff sound familiar? JP Morgan was fined over $2 billion for its role in the Madoff Ponzi scheme, conspiracy scandal. All of this is not new. Price-fixing cases are conspiracies and the U.S. Justice Department said there was an epidemic of them in the late 1990’s when prosecuting Samsung for such doings. Nothing has changed since then.

Now look at this beauty…

CFTC Charges J.P. Morgan Securities LLC with Repeatedly Submitting Inaccurate Large Trader Reports and Imposes a $650,000 Civil Monetary Penalty

July 29, 2014

Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) today issued an Order filing and simultaneously settling charges against J.P. Morgan Securities LLC (JPMS), a wholly-owned subsidiary of JPMorgan Chase & Co. and a CFTC-registered Futures Commission Merchant (FCM), for submitting inaccurate reports to the CFTC relating to the required reporting of positions held by certain large traders whose accounts are carried by JPMS. The reporting violations occurred despite the CFTC notifying JPMS of numerous errors in its reports. The CFTC Order requires JPMS to pay a $650,000 civil monetary penalty to address its unlawful conduct.

The reports are known as the "large trader" reports and are used by the CFTC in order to evaluate potential market risks and monitor compliance with CFTC requirements.

CFTC Director of Enforcement Aitan Goelman commented: "The large trader reports are vital to the CFTC’s role in monitoring market behavior and are important to members of the public, many of whom rely on that information in forming trading strategies. Therefore, submission of accurate and reliable data to the CFTC is essential. The CFTC will be vigilant in enforcing these rules in order to ensure the integrity of the regulatory structure and to maintain transparency in the markets."

The CFTC Order specifically finds that since at least 2012, the CFTC was notifying JPMS about errors in its large trader reports, which increased in frequency throughout the year. CFTC Regulations require FCMs to submit information on a daily basis for certain large traders, such as the number of open futures or options positions; the number of delivery notices issued or stopped; and the number of Exchange For Related Positions (EFRPs). In December 2012, the CFTC notified JPMS that the on-going problems were unacceptable. JPMS, relying on its third-party vendor that generated the reports for JPMS, assured CFTC staff that the problems would be resolved on or before the end of January 2013. However, JPMS continued to submit large trader reports that contained hundreds of errors throughout the period from February 1, 2013 to February 2014.

Accordingly, the CFTC Order finds that JPMS violated Section 4g(a) of the Commodity Exchange Act (CEA), 7 U.S.C. § 6g(a) (2012), and CFTC Regulation 17.00(a)(1), 17 C.F.R. § 17.00(a)(1) (2013), with respect to its large trader reporting of delivery notices and EFRPs in connection with futures positions.

In addition to imposition of the $650,000 civil monetary penalty, the CFTC ordered JPMS to submit a certified statement of compliance within 120 days of the entry of the CFTC Order stating that it has completed enhancements to its systems and procedures related to reporting of delivery notices and EFRPs, and has tested such systems and procedures to ensure that they now comply with the requirements of the CEA and CFTC Regulations.

The CFTC Division of Enforcement staff members responsible for this matter are Allison Baker Shealy, George H. Malas, and Paul G. Hayeck, with assistance from CFTC Office of Data and Technology staff Jorge Herrada, Margaret Sweet, Howard Rosen, Marshall Horn, and Yolonda Herron.

Media Contact
Dennis Holden


So how is anyone supposed to know what is what by looking at the published reports on the gold and silver markets. As veteran Café members know, it has long been my opinion that JP Morgan was trading for The Gold Cartel, including the US Government, by using offshore accounts, which could not be traced. Based on this development, that could easily be the case. What is clear is that this discovery, one which received little to no attention, bolsters GATA’s contention that the gold and silver markets reek of corruption everywhere you turn.

For those of you who want to become more familiar with some of what GATA has put together over the years about the gold/silver price suppression scheme, I strongly suggest you read Chris Powell’s stump speech titled, "Gold price suppression -- why, how, and how long." It was given last fall and early this year in New Orleans, New Zealand, Australia and Suriname. It can be found here:


Yes, it IS bigger than you think and when it all sees the light of day will lead to the biggest financial market scandal in US history. That will include market collapses, force majuere, a panic re unallocated gold accounts, a scandal over a real audit of US gold supply, one investigation after another of how this could have all happened, etc.

But, more importantly, for those who read this, it is also leading to an extraordinary investment opportunity … that being an explosion in the gold and silver markets. Because of The Gold Cartel, their prices have been forced down to artificially low levels. If the price of gold had just kept up with inflation, that price would be at least DOUBLE what it is today. The price of silver reached $50 thirty four years ago, and just about that a little over three years ago. It won’t be too long before that level is taken out with $100 an ounce as the next target.

Fortunes will be made by those onboard.

Bill Murphy
Gold Anti-Trust Action Committee


47 Protons
Aug 4, 2014 - 12:21pm


fourth, but I wish I was Thurd.

Aug 4, 2014 - 12:26pm


As in 2nd amendment. Stack, and do not for get lead.

Oops! Too slow on the draw.

 Go'n to get renewed Concealed Carry Weapon permit today. Yahoo!

Aug 4, 2014 - 12:43pm

Miners seem weaker than AU

I have noticed the miners drop tick for tick with AU today, but do not bounce back as high when AU has its last three bear bounces at 10, 11:30 and 12:30. I got out. Think I'll wait for something closer to 1280 to buy back into the miners. Maybe tomorrow.

Trying to trade with my head, not my emotions. 

Aug 4, 2014 - 12:44pm

I'll go automatically.

Great info and an automatic renewal... What more could you want ?

Aug 4, 2014 - 12:52pm


folks, don't forget to change your credit card if it has changed. Save a lot of e mails and paperwork to revise it ahead of time.

My interest is to keep Turd focused. LOL

4 oz
Aug 4, 2014 - 1:21pm

Draggin' The Line~~~

Video unavailable
Aug 4, 2014 - 1:48pm

Clive Maund July 13

Gold Market Update

By: Clive Maund

-- Posted Sunday, 13 July 2014 | Share this article | 4 Comments

Whilst acknowledging that “this time it could be different” we have no choice but to call gold and silver lower on the basis of their latest extraordinary COT charts, which reveal that the normally wrong Large specs are already “betting the farm” on this rally.

Let’s start by looking at the latest 6-month chart for gold. On this chart we can see that following its big up day in mid-June gold has only managed to creep about $20 higher.

The 1-year chart will enable us to make a direct comparison with the latest COT chart placed right below it, which goes back about a year…

By comparing these 2 charts we can see how the peak and troughs in the gold price have a strong correspondence with the peaks and troughs in Large Spec long positions. They didn’t want to touch gold last December, right before a big rally, but when the rally peaked in March, they were falling over themselves to go long. So what do you think is likely to happen now that they have stampeded in and built their long positions to at least a 1-year record? The picture for silver is even more extreme.

On its 30-month chart it looks like gold has broken out from the downtrend shown, but here we should be careful, because it is clear that if they want to snare the biggest number of traders and then fleece them, the thing to do is to “paint the chart” to make it look like gold has broken out.

Listen, the crux of our argument is this. If this apparent new uptrend has got legs, then COT positions, both Commercial short and Large Spec long positions should build up steadily as the uptrend proceeds towards an eventual peak when the uptrend is mature – not explode to huge levels right at the get-go. There is an argument that “this time it’s different” and that on this occasion the Commercials are wrong, and when they realize that they are, they are going to rush to cover and create a meltup. The chances of this being the case are considered to be low, and you need to be brave, and perhaps stupid to place bets on the basis of it. We should not forget that the Commercials have unlimited ammo to throw at the paper price to make sure that their will prevails.

One supposed fundamental reason for a big rally in gold and silver is the spread of anarchy and chaos in the Mid-East, due in particular to the activities of ISIS, but if that’s the case why has the oil price just taken a hit? On its 6-month chart below we can see how it broke out upside from a Rising Triangle when the ISIS rampage in Iraq was in the spotlight, but then the breakout aborted and it has since slumped back towards its 200-day moving average, so that it is now well below its price before most anyone had even heard of ISIS. The increasingly bearish COT for oil presaged all this and was highlighted in the last Oil Market update. We cannot therefore expect the prices of gold and silver to draw support from this source, at least not in the foreseeable future.

The long-term chart for gold continues to look promising, so one scenario here is that gold now backs off one last time towards its lows, before the expected major new uptrend begins.

We will end by making one important point. The general situation across markets now is very similar to the one we were in 2007 – 2008, except that it is much worse. As we know the problems exposed by the crisis and market crash of 2008 were never addressed or corrected, but simply papered over with printed money in a classic exercise in can kicking. Now we are arriving at the point where the can cannot be kicked further down the road. We are on the verge of another severe global bearmarket which could make the one in 2008 look like a “walk in the park”. There will be a lot of talk about “wealth destruction” in a year or two, but real wealth won’t be destroyed of course, only the intrinsically worthless paper claims that investors have insisted on bidding higher and higher in the face of zero interest rates, such as bonds, debt instruments of all kinds, currencies themselves and derivatives. Real wealth is agricultural land, factories, commodities, and especially gold and silver. To survive financially, and maybe prosper, all you have to do is make sure your capital is invested in real wealth. This is why Big Money investors in gold don’t give a toot about its price in Fiat, and couldn’t care less about the shenanigans at the Comex. They’ve got their gold safely stashed away in secure locations, and when all this fiat rubbish and worthless trash like bonds goes up in flames in one of the biggest bonfires in history, which could be a lot closer at hand than many realize, they will be completely insulated from the chaos and mayhem afflicting the masses, and when the dust starts to settle will be able to move in and buy up many assets at pennies on the dollar. So as this time approaches, make sure you allocate whatever capital you have into “real wealth” and take whatever steps you have to, to secure access to essentials in the event of systemic collapse.

Aug 4, 2014 - 1:49pm

Clive Maund August 3rd

We called the exact top in gold to the day in the last update 3 weeks ago, as it has since reacted back. Now the picture is more messy, with conflicting indications, but let’s see what we can make of it. There was no update for these 3 weeks as we were waiting for this decline to run its course (no point in working for the sake of it).

On the 6-month gold chart we can see how the forecast decline was kicked off by a sharp drop, but as it has proceeded it has diminished in force, and it now looks like the minor downtrend has developed into a bullish Falling Wedge. With this Wedge now closing up a breakout and rally looks imminent, made more likely by a “piercing pattern” appearing on the chart on Friday, and also by the strong dollar having hit a short-term target in a very overbought state on Wednesday and Thursday, which we will look at shortly. It was this strong dollar which forced gold and silver lower in recent weeks. Disappointing for bulls, however, is the fact that the extreme COT readings of a few weeks back have not eased off much.

The 1-year chart for gold is shown below for the purposes of comparing it to the COT chart immediately below it…

Gold’s COT structure has eased on the reaction back of recent weeks, but not enough to provide much cheer for the bullish camp…

The 4-year chart for gold is interesting as it enables us to examine to advantage the potential base pattern forming in gold for over a year. Many analysts have been grappling to define this pattern, which is not a Head-and-Shoulders bottom nor a normal Triangle, but something else. It is now thought that it is probably a “Fish-Head” Triangle, which is a type of Triangle where its boundaries converge at an increasingly rapid rate. As we can see, if it is a true Fish Head Triangle, then breakout is imminent, and as with normal Triangles, breakout can be in either direction.

Given the geopolitical mayhem of recent weeks, with Russia being singled out as the new enemy by the Military - Industrial complex, for reasons set out in Why they are making an enemy of Russia, which is now a freely available article, and Israel running amok in Gaza, gold has been surprisingly weak, even given the negative influence of the strong dollar rally, and the continuing high COT readings do not help the bullish case either. So, although we are expecting a relief rally by gold as the dollar consolidates or reacts back, it is important note that it may not succeed in breaking out upside from the Triangle, at least not yet.

The long-term 15-year chart shows that gold is at a critical juncture, as it is cornered between the falling red downtrend line shown, and its long-term uptrend support line. This is the perfect point for a major new uptrend to start, and seasonals are favorable, but the COTs don’t look positive.

On the 6-month dollar index chart we can see how it arrived at a trendline target in an overbought state last week, and then started to react back on Friday. Further consolidation/reaction looks likely, although the dollar could start a moonshot if the stockmarket crashes soon, and here we should note that Treasuries are unlikely to provide safe haven as they did in 2008. This because, after years of extraordinarily low interest rates, rates are now almost at zero, so the only way for them to go is up, and if that happens bond prices should crash too, along with the stockmarket. This will be the result of the economy growing at a considerably faster clip than expected putting upward pressure on interest rates in an environment of debt saturation and the Fed backing out of asset purchases too late, as usual.

Meanwhile, on the 6-month chart for Light Crude, we can see that it has been surprisingly weak in the recent past, given what has been going in the Mid-East and with Russia, and it is noteworthy that it fell hard on the day that the stockmarket plunged last week. This suggests that when the stockmarket crashes it will tank. In itself it is not a good sign for gold and silver.

Speaking of the general stockmarket, although it plunged on one day last week, it has still not broken down from the giant bearish Rising Wedge shown on the 8-year chart for the S&P500 index below. When that happens, and it looks likely soon given that the Wedge is now closing up, a lot of market players can be expected to jam the exits, all trying to get out at once, and we could see a particularly disorderly situation and a savage decline. It is considered prudent to get your bear ETFs and Puts on board ahead of time. We will be looking at some soon on the site.

End of update.

pbfurn Mickey
Aug 4, 2014 - 1:56pm


You deserve 10 hat tips for this reminder about having a different credit card than the one previously used on this site. 

Now, could you or someone, be kind enough to walk me through the procedure to change my CC information. As usual, I am unable to find the proper tabs.

Many thanks.

Aug 4, 2014 - 2:12pm


Go to your account and click on recurring fees in red. Then update.

Aug 4, 2014 - 2:33pm
Aug 4, 2014 - 2:39pm


lol, I can say with certainty that this witch is commando regardless of what the picture shows...

Someone else can post on Fellen's undergarments or lackthereof...

Late Edit: Turd did call this post "Riding the Line"! lmao

Clarki Stomias
Aug 4, 2014 - 2:40pm

Marketwatch/WSJ Pro-Gold Article

They are getting "oh-so-close" to admitting the truth. Count this as further, if begrudging, awakening.

"If we assume inflationary risks are not transitory in the short term, then that means the Fed may ultimately be behind the curve and be considerably lagging in terms of responding to inflation (which I personally do not believe is a real threat just yet). Gold tends to do well in negative real-rate environments, whereby inflation is higher than interest rates."

The author still can't abstain from bashing though, even in a "gold positive" article (my bold question marks below):

"So while the Golden Age never actually happened (????), the Age of Gold still might for those interested in diversifying away from the honey-badger U.S. stock market, which doesn't seem to care about risk until it actually does."


Aug 4, 2014 - 3:17pm

so stocks go down.... PMs

so stocks go down.... PMs down. and stocks go up... PMs down. all good everyone, nothing to see.

Dr. P. Metals
Aug 4, 2014 - 3:33pm


If you GAVE an AGE to any American/western citizen, they would all INSTANTLY go pawn it for FIAT! They would only think they had value/money after doing so.

Gold will not be valued even one nanosecond, before it is.

Aug 4, 2014 - 4:13pm

Ebola in NY?

Great work on the forums Cris and everyone else! This one is too close to home not to post on main street...


Aug 4, 2014 - 4:19pm

FWIW on open interest

A total collapse in Comex gold open interest. Even worse than the preliminary indication back on Saturday.

On Friday, two days after August contract expiration and with price UP $12.10, total gold OI fell by 9,600 contracts or about 2.5%. As of Friday, the total Comex gold OI stood at just 358,996. This is extraordinary and a new multi-year low. In fact, I simply can't remember a time when it was lower. Maybe 2006 or 2007? This is a complete disaster for the fee-loving CME. Expect another margin cut soon as they desperately try to entice gamblers back to their crooked casino.

Silver OI also fell on Friday while its price fell 4¢. Though it was down 3,100 on Friday, total Comex silver OI is still at the very high level of 157,395.

Aug 4, 2014 - 4:26pm
Clarki Stomias
Aug 4, 2014 - 4:58pm

@ Turd Re: the Silver Fix Get-Out-Of-Jail-Free-Card

I have two immediate sensory reactions to that article and the now "optional" nature of the legacy Silver Fix contracts:

  • Burning, white hot, visceral anger which makes me want to call down old-testament-esque brimstone-induced justice upon that brood of vipers


  • "of course they did" resignation that TPTB have once again changed the rules to allow them to slink away to the shadows to kill again at a later date

Interesting cocktail of competing emotions. If I were a swearing man, I think I would have just typed the "F" word about 100 times and let that stand in as my thoughts on the subject.

Still, this reeks of years and years of lawsuits to come. You can't just "undo" thousands of contracts by edict (Oh wait, this is a government/global trade entity, nevermind...) 

I would love to hear CA Lawyer weigh in on this one.

Aug 4, 2014 - 5:09pm

Hello Turd, good to be back

I had some financial difficulty for a while and temporarily ended my subscription. But as you can see, I'm back!

I missed those podcasts!

Aug 4, 2014 - 5:21pm

The slow death of the CME?

Trading volume down, revenue down. CFTC fines JPM and confirms fraudulent COT data essential for gold and silver trading on the COMEX. COMEX owned by CME Group. 

This self regulating market and company is a grand FARCE, and is on it's way to be irrelevant and the eastern markets trading PHYSICAL metal will take control. 


Second-quarter 2014 average daily volume was 12.6 million contracts, down 12 percent from second-quarter 2013 and impacted by low volatility across all asset classes. Clearing and transaction fee revenues were $609 million, also down 12 percent compared with the strong second-quarter 2013, when market participants reacted to the Federal Reserve chairman's comments about potential tapering of quantitative easing. Second-quarter 2014 total average rate per contract was 74.9 cents, down from 76.7 cents in first-quarter 2014, driven primarily by a higher proportion of total volume coming from interest rate products, which have lower average fees.

Aug 4, 2014 - 5:25pm

Relax - No Need for Panic or Anger at the Silver Fix Price

Hello all.

Just checking in, and saw Clarki's post as well as TF's on the Bix Weir sensationalism. While I appreciate Bix's point of view, I tend to focus on facts, not hyperbole.

I went to the ISDA, downloaded the proposed amendment to the existing agreements, and also downloaded the ISDA explanatory note.

I have NOT downloaded any existing contracts which reference the soon-to-be-former "silver fix" with the new form of the silver fix after the old "silver fix" price is no longer given, as of August 15, 2014.

Here is my $0.02:

In light of the demise of the old silver fix arrangement, and the implementation of a new silver fix price mechanism effective August 15, 2014, whether one believes it was part of a normal business plan, or some scheme, or somewhere in between, the simple fact remains of what to do about EXISTING contracts that reference a silver fixing price that will cease existence as of August 15, 2014.

Lawyers plan for this stuff all the time. That is why a simple agreement, in the hands of lawyers, ends up taking 20 pages. Understand that contract lawyers, transactional types, do this day in and day out. Litigation attorneys are the ones that sue, looking for loopholes in the contracts. If the existing contracts were NOT amended to reflect the change to the silver fix mechanism, then there could be some issues down the road, not that there will be.

Remember, if for some reason, one of the smart lawyers who originally drafted up the original contracts, did not plan on the contingency that somehow, the silver fix would either fail, or not be made, or something like that, I would be SHOCKED beyond belief. That would be like entering into a settlement agreement after a lawsuit, whereby one side was to pay money to the other. Naturally, there exists the possibility that one side will not perform, so the typical settlement agreement plans for this, and has some contract provisions that address this situation. Same thing no doubt exists in the silver futures contracts.

Second, if for some reason, there is a disagreement over the silver fix price, even if the contract is silent, which I cannot fathom would be the case, but for argument sake, even if that is the case, the law provides for a remedy in the event of changed circumstances. The law will imply terms, or use course of conduct, usage of trade, etc., or resort to tried and true principles of contract interpretation like, for example, if vague, contract terms are construed against the drafter, etc.

So, Bix, as much as I like hearing his cheerleading, needs to relax. This is a ROUTINE amendment, specifically to deal with the fact of the old silver fix price is changing to a new silver fix price.

If one wants to read the ISDA explanation, it is quoted below, from here:

"Explanatory Statement – winding down of London Silver Fix

On 14 May 2014, the London Silver Market Fixing Limited announced that it would be winding down the administration of the London Silver Fix on 14 August 2014. Further to a market consultation run by the London Bullion Market Association, an alternative London daily silver price mechanism, the London Silver Price, is expected to be available from 15 August 2014, such price to be administered by CME Group and Thomson Reuters. 

Members of the ISDA Energy, Commodities and Developing Products Committee met by teleconference on 20 May, 18 June, 9 July and 15 July to discuss the implications of these changes for outstanding transactions that reference the London Silver Fix and have a term beyond 14 August 2014 (such transactions, the “Affected Transactions”). In accordance with Sub-Annex A of the 2005 ISDA Commodity Definitions, the Commodity Reference Price “SILVER-FIX” means that the price for a Pricing Date will be that day’s Silver fixing price per 
troy ounce of Silver for delivery in London through a member of the LBMA authorized to effect such delivery, stated in U.S. cents, as calculated by the London Silver Market and displayed on Reuters Screen page “SIFO” that displays prices effective on that Pricing Date. 

ISDA notes that other variations of a London Silver Fix reference price may also be referenced in outstanding OTC derivative and/or physical silver transactions. 
ISDA, in consultation with market participants, is issuing this statement in addition to the Amendment Agreement as a means of assisting market participants in treating Affected Transactions. Parties are not obligated to enter into the Amendment Agreement and may choose to negotiate alternative means of treating Affected Transactions. 

The Amendment Agreement seeks to replace references to “SILVER-FIX” with a reference to a new Commodity Reference Price, which may include a reference to the new London Silver Price. Parties electing to amend the Affected Transactions through the Amendment Agreement may do so with effect from 15 August 2014. 

ISDA encourages member firms to refer their clients (who may not be ISDA members) to this Statement (and the Amendment Agreement) in the interest of informing all market participants of the changes to the administration of the London Silver Fix. ISDA notes that many Affected Transactions may be governed by bilateral agreements that offer other responses to this situation, unless the parties agree otherwise. "

Questions? Let me know.

Texas Sandman
Aug 4, 2014 - 5:32pm

OI collapse meaning

Does that mean the commercials covered short en masse, as the TA based hedge funds sold to them? Is that a reasonable interpretation?

Aug 4, 2014 - 5:37pm

Thanks CALaw

Nice to have a lawyer ( or two or three) around to help us stay calm and hold our stacks tightly.

If I am not mistaken, Madhatter and Sparticus Rex are both attorneys?

Aug 4, 2014 - 5:42pm

No way



I won!!


​ https://youtu.be/C7HDW_vktSw

CC updated - Thanks Murph for that " how to "

Luke 4 oz
Aug 4, 2014 - 5:51pm

Draggin' the line

That is a great song 4 oz, thanks for posting it and for reminding me of it too. I was singing along as it played and I think I can manage all of the vocal parts on it so I might try a multi-track upload to YouTube later on. Can't post here without including a little shameless self promotion of course so all fellow turdites are invited to check out my YT music channel: just type "alertami" on the search line to get to it.

Clarki Stomias
Aug 4, 2014 - 6:05pm

Thanks CA Lawyer

That just seemed too brazen to be real to me. I appreciate the investigation as I only read Bix' article. As I said, you can't just undo historical contracts via a new rule or edict. Muy apreciado. I will cancel previously stated order for brimstone. 

Aug 4, 2014 - 6:22pm

Coin Production at the West Point Mint

Precision, attention to quality and detail, pride in craftsmanship, and careful accountability are qualities that shine through in the coin production activities at the West Point Mint. Under plant manager Ellen McCullom, the facility strikes millions of precious metals coins each year for investors and collectors around the world in addition to its duties safeguarding billions in precious metals assets.

Due to the high security of the facility, it is not open to public tours, but this article will provide an inside look at how coins are produced at the West Point Mint.

Current production responsibilities include striking the American Eagle coins in gold, platinum, and silver, the 24 karat gold American Buffalo coins, and various annual commemorative coins. Recent special issues have included last year’s enhanced uncirculated American Silver Eagle, this year’s immensely popular curved Baseball Hall of Fame Gold Coins, and the upcoming reverse proof silver and 24 karat gold Kennedy Half Dollars issued to mark the 50th anniversary of the series.

400 ounce gold bars

The production process for many gold coins begins with the 400 ounce gold bars which the facility safeguards. Some of the bars are sent to contractors where they will be alloyed and manufactured into planchets. The planchets for silver coins are typically sourced directly from contractors.

optical emission spectrometer

Before any of the planchets are used in production, they must be tested to ensure they meet contract specifications for weight and alloy. Shown above is an optical emission spectrometer used within the assay process.

fire assay method illustration

The fire assay method is used for 22 karat gold. The image above illustrates the steps within the fire assay method, which has been used for thousands of years.


In addition to verifying the weight and alloy, the dimensions, surface roughness, and grain size are also examined. Shown above is a planchet which has been sectioned to examine the internal grain structure.

grain of 24 karat gold cross section

Shown above is a magnified cross section of a gold blank showing the grain structure.

scanning electron microscope

A scanning electron microscope can also be used to detect and more closely examine any processing defects or impurities. Details on any imperfections are relayed back to the suppliers for corrective action.


A blue streak which appeared on a 24 karat gold planchet was found to be silver.

burnishing coin planchets with steel shot

Once determined to be acceptable, the planchets move to the burnishing room where they are burnished against steel shot.

washing planchets

The burnished planchets are washed and then receive an ultra sonic drying. After this point, they are ready to be used in production.

coin die finishing process

The West Point Mint also performs the steps necessary to get unfinished coin dies sent from the Philadelphia Mint ready for use in production. The image above shows the progression of steps necessary to go from a raw die to a finished die for coins which will have an enhanced uncirculated, reverse proof, and traditional proof finish.

polishing coin dies by hand

First, the unfinished dies are polished using hand tools and diamond paste. This serves to remove any imperfections and create a basic finish.

polishing coin dies with machine

Additional polishing is performed with a machine first using brushes and then felt heads to further improve the finish.

laser frosting coin dies

Once the polishing process has been completed, the dies are laser frosted in the machine shown above.


The screens show the overall frosting to be applied to a reverse proof Kennedy Half Dollar and a close up of the laser pattern to be applied. Coins carrying a reverse proof finish will display mirrored design elements and inscriptions against frosted fields.

coin dies ultrasonic cleaning

After the laser frosting process is complete, the dies receive an ultrasonic cleaning. From here, the dies move to a clean room where a final inspection is performed and a PVD coating is applied. PVD, or physical vapor deposition, applies a thin chrome coating which serves to increase die life.

striking American Silver Eagle bullion coins

With the planchets and dies prepared, the coin production process can begin. The machine above is shown striking the popular American Silver Eagle bullion coins.

Just minted 2014 American Silver Eagle bullion coin

Here’s one hot off the press! The West Point Mint strikes roughly three-quarters of the Silver Eagle bullion coins sold by the United States Mint. In 2013, total sales exceeded 40 million coins, establishing a new annual record.

quality inspection coins

Quality control takes place right on the production floor. Here, one of the reverse proof silver Kennedy Half Dollars is being examined.

first and last struck coins

The first and last strikes from each die receive close examination.

automated process for packaging silver bullion coins

The packaging process for certain high production coins is automated. Here, trays containing American Silver Eagle bullion coins are being fed into a machine which will automatically place the coins in tubes and package the tubes into boxes.


Here, the tubes are being automatically filled with 20 one ounce coins each.

filling up silver eagle monster box

Once the tubes have been filled, they are capped and placed into a green monster box. Each box will contain 25 of the 20-coin rolls, for a total of 500 ounces of silver. The rolls and box are weighed at each step to ensure accuracy.

pallet of American Silver Eagle monster boxes

A pallet of West Point Silver Eagle monster boxes ready to go!

automated packaging of Proof Silver Eagles

In addition to the automated packaging for the bullion coins, the packaging process for the Proof American Silver Eagles is also automated. The coins are automatically encapsulated and placed in boxes with the accompanying certificate of authenticity.

Proof Silver Eagle

Last year, the United States Mint sold more than 850,000 of the 2013-W Proof Silver Eagles, making it the highest selling numismatic product of the year based on unit volume.

striking gold half dollars

The production process for the 24 karat gold Kennedy Half Dollars is less automated than the higher production Silver Eagle coins. The gold blanks are manually fed into the machine where they will be struck three times under 90-95 metric tons of pressure.

packaging gold half dollars

The packaging process for the 50th Anniversary Kennedy Half Dollar Gold Proof Coin is also performed manually.

2014-W 24 Karat Gold Proof Half Dollar

Here is a closer look at the final coin, which contains 3/4 of a troy ounce of 24 karat gold and carries the same diameter and thickness as a standard half dollar. The obverse design features the restored 1964 portrait design created by Gilroy Roberts and the dual date of “1964-2014″. The reverse carries the heraldic eagle design by Frank Gasparro based on the Presidential Seal with an added inscription of the precious metal weight and purity and the “W” mint mark.

2014-W Gold Proof Kennedy Half Dollar in packaging

The coins are encapsulated and packaged in a single, custom-designed brown mahogany hardwood case with removable coin well and certificate of authenticity. Sales will begin on the US Mint’s website, by phone, and at retail locations on August 5, 2014 at 12:00 Noon ET. The initial production level is 40,000 units, but demand may very well prove higher. The Mint will evaluate sales activity during the first week of sales and adjust production plans accordingly.


Become a gold member and subscribe to Turd's Vault


Donate  Shop

Get Your Subscriber Benefits

Exclusive discount for silver purchases, and a private iTunes feed for TF Metals Report podcasts!

Key Economic Events Week of 1/14

1/15 8:30 am ET Producer Price Index
1/15 8:30 am ET Empire State Mfg. Index
1/16 8:30 am ET Retail Sales
1/16 8:30 am ET Import Price Index
1/17 8:30 am ET Housing Starts
1/17 8:30 am ET Philly Fed
1/18 9:15 am ET Capacity Utilization and Ind. Prod.

Key Economic Events Week of 1/7

1/7 10:00 ET ISM Services Index
1/7 10:00 ET Factory Orders
1/9 2:00 ET December FOMC minutes 
1/10 Speeches from CGP, Goons Bullard and Evans
1/11 8:30 ET CPI

Key Economic Events Week of 12/31

1/2 9:45 am ET Markit Manu PMI
1/3 10:00 am ET ISM Manu Index
1/4 8:30 am ET BLSBS
1/4 9:45 am ET Markit Serv PMI