Gobble, Gobble!

Mon, Nov 24, 2014 - 10:55am

An odd week begins with Dec14 option expiry today, Dec14 contract expiry on Wednesday, an American holiday on Thursday, a holiday-shortened trading session on Friday and the Swiss Gold Initiative vote on Sunday. What does this mean? Be ready for all sorts of price volatility.

The good news, though, is that paper gold and silver continue to find buyers. The London GOFO rates continue to deepen as the supply squeeze of readily-deliverable, 400-oz bars continues at these price levels. In fact, GOFO has now been negative each day for the past four weeks and it put it new lows just today! Even the 6-month rate is now significantly negative:

Against this backdrop, Koos reports today that Shanghai delivered another 52 metric tonnes just last week. This brings the YTD total for Shanghai up to 1,761 mts. No dropoff there...just a steady, relentless Chinese demand. Additionally, Koos adds up all Chinese gold imports, mining, official reserves and jewelry base (which hasn't been updated in 19 years) and comes up with a total Chinese gold reserves of 15,496 mts. Hmmm...Something tells me you won't see that number quoted by Reuters or the WGC.

At any rate, Koos concludes this post by stating this:

"I found some interesting things ‘on the ground’ here in Amsterdam regarding the repatriation of Dutch gold from New York by DNB, I think it’s in everybody’s interest I continue writing on that story."

Well, that sounds interesting, doesn't it? I guess we'll stay tuned. Anyway, great work Koos! Read it all here: https://www.bullionstar.com/blog/koos-jansen/total-chinese-gold-reserves...

Further good news is that the yen is back in the toilet today but gold is still not following it down. (So far, recall that it IS option expiration day.) This makes Turd happy and provides another day of reinforcing evidence that we are analyzing this correctly.

If we remove the yen candlesticks from the chart above and focus solely upon gold, we see that the $1204-1206 level continues to act as stout support. Once again last evening, the high was $1204.40. But price is hanging in there with a last of $1200.00 so we should really be quite encouraged. Our main goal now is to keep our weekly winning streak going with another green candle this week. Can we do it? I think so but it's likely not going to be easy.

And lo and behold, silver has not (yet) been smashed today! Count me amongst the stunned. As noted last week, simply by moving sideways here, silver is going to finally break out of the brutal down channel that has contained it since mid-July. This is very encouraging but it ain't over yet. Watch this very closely in the hours ahead.

And there is a major OPEC meeting set to begin on Thursday in Vienna. Therefore, expect a volatile week in crude oil and this could/might have an impact in silver, too. As you can see below, the algo linkage of crude and silver has been fraying recently just as the algo gold--yen linkage has broken. Regardless, I'd expect to see fluctuations in crude continue to have at least a tangental impact on silver...so...watch crude closely this week, too. https://www.zerohedge.com/news/2014-11-24/brent-plunge-60-if-opec-fails-...

Finally, after considering all sorts of positive and negative feedback, I've decided to reopen (for Vault subscribers) the comments pages on all homepage threads. This means:

  1. All Vault subscribers can comment freely on Vault threads.
  2. All Vault subscribers (only) can also comment freely on public threads.
  3. But the renewed use of the forums has been encouraging and exactly what I was hoping for. Please continue to freely share information and discuss TEOTGKE there. The forums offer everyone the opportunity for in-depth and lengthy discussions of the type that simply can't be had on the daily threads.

I'm going to stop now so that I can write up a new public thread which will allow everyone to see how this works. I hope that everyone is pleased with the new arrangement.


About the Author

turd [at] tfmetalsreport [dot] com ()


Nov 24, 2014 - 10:56am


to wish everyone a Happy Thanksgiving

Nov 24, 2014 - 11:00am

Lars and Grant


Grant Williams - The Gold price is not the price of Gold

Also, Turd I'm VERY PLEASED WITH THE NEW ARRANGEMENT! I had made a personal decision to no longer visit main street some time ago due to an apparent pandemic of rabies there. I now like walking down mainstreet :D

Great work!

Nov 24, 2014 - 11:02am


IF the Saudi's are indeed targeting US Shale production then my guess is that they will NOT announce a production cut BWTFDIK :-) ?

gold slut
Nov 24, 2014 - 11:08am

New arrangement

So glad to have the vaulters' comments on public threads! The comments were/are 50% of the draw to TFMR and removing any comment from the main page was like emptying the shop window. When something is as good as TFMR, you want to advertise it to the world baby!

Nov 24, 2014 - 11:29am

Top Ten.....


Nov 24, 2014 - 11:32am

I am pleased--

--pleased that I am not trading SLV options or futures options and have to keep an eye on the screen at all times during weeks like this. Simply holding metal is very comforting and allows restful sleep, regardless of what the Comex price is.

But I must admit... It is very tempting, at these prices for silver, and especially if we get the dreaded smash below 15 that some have been predicting, to purchase an actual silver contract and stand for delivery, loading my trading account with enough fiat to pay in full. I suppose the risk is that they push the price down even further then force me to settle for cash when the contract expires. I couldn't afford the paper loss if that happened. And I really don't want the nail-gun salesmen to visit my office, home or bathtub were I to choose to be vocal about pressure to settle in cash and not metal.

Dr. P. Metals
Nov 24, 2014 - 11:40am

RE: Stunned

Yes, i'm stunned also, if they let Ag go now, it will head towards $22 again...I'm not buying this yet. I've been wrong 999 out of 1000 times prior on buying expecting the channel to break. I'd be curious on today's podcast to update charts in particular:

1. USDJPY (itself)

2. JPYAu

3. Bonds vs Au

4. Any update on JPM vault movements.

5. Update on any "reliable" data out of swiss land?

6. Miners MACD/etc...which has burned us in the you know what last time with a false turn!!


Nov 24, 2014 - 11:42am

Great job Turd

Turd, you continue to make this great site even better. Being a newbie to Turdville, I can say this is the best site by far, along with informative posts from interesting folks around the globe. I can only hope to add positive vibs going forward.

Thank you for you're hard work and dedication to this site.

Nov 24, 2014 - 11:47am

SGI poll

Must be using common core math.

Nov 24, 2014 - 11:49am


A Polish foot disease?

I noticed platinum just took a nose dive....probably because I bought some. At least gold and silver are holding their own so far.

Nov 24, 2014 - 11:51am

Ed Steer on Operation Freedom

Fellow Turdites,

Yesterday I had Ed Steer as a guest on Operation Freedom... we connected the dots on "Ukraine's missing gold", The Dutch Gold Repatriation and The MH-17 "investigation". I know ....." pure conspiracy theory." Take a listen if you have several minutes.



Nov 24, 2014 - 11:53am

Great show Dr. Janda

Listened to it first thing this morning.

Nov 24, 2014 - 12:00pm

Most of my miners are green today

Hmmm, a moon shot will make me even :-(, I need the stars


Nov 24, 2014 - 12:03pm

@ Dr Jerome


Not as liquid as SI but you could easily get in at a decent price on a Comex SI smash

Nov 24, 2014 - 12:07pm

Re: I am pleased--

You could always take delivery of one of the mini silver contracts (1000 OZ)

Nov 24, 2014 - 12:09pm

Weekly MACD Oil

Has been this low only in 1986, late, 2008, and now. Not exactly the time to be prognosticating much lower lows. The HUi had doubled within 6 months then. Everything went up...copper, gold, silver, etc.

Hagel getting the boot?

"Mr President, with all due respect, attacking Iran or Russia is suicidal."

"Thanks, Chuck. It was an honor to serve with you."

Connect the dots.

Nov 24, 2014 - 12:10pm


Hmmm... I was thinking a 5K contract...but 1K is much more easily in my range. Hmmm...

We need more pics of gold around here.

Nov 24, 2014 - 12:20pm

New arrangements

Turd, Great news allowing vaulters to comment on public threads, whilst the public threads had become a village of idiots instead of just one village idiot i really did miss vaulters comments ....and put downs of trolls. Really liked the forum thread for Dr Js post too so hopefully the forum will become more focused as you wish $100/year or $10/month just fantastic value, long may it continue

Nov 24, 2014 - 12:25pm

@ mattheim

Thanks. I am checking out the website. I suppose a couple of monster boxes are perhaps the wiser investment, if you can get them. If one is standing for delivery, liquidity isn't really an issue, provided they can deliver. symbol /YI

Now on sale, only $16,380

Keg: that is funny! ... common core math!

Nov 24, 2014 - 12:34pm

@mattheim, Dr J

I spent a few minutes clicking links on that site, and for the life of me I cannot find anything that talks about the how/when/where of physical settlement. Can you?

Nov 24, 2014 - 12:41pm
Nov 24, 2014 - 12:44pm

@ boomstick

Yikes, I can't either. Monster boxes might be the safer option :-)

Nov 24, 2014 - 12:44pm

slv and gdx options

when we had the dip 2 weeks ago I could not resist buying some low cost Jan otm calls on GDX and SLV. Still otm but green on those. wrote some further otm calls and got most of my investment out--so I have some upside left but little downside.

if we sell a bit I will buy back the short calls.

I try to keep some long otm calls clean just so if we have an event and gold and silver and miners rocket, I get some huge leverage on it.

Nov 24, 2014 - 1:12pm

@Turd - what is different this time?

Definitely a nice bounce off the new lows for this bear market, but in your opinion what is going to prevent the cartel from loading the boats with shorts around the $1225-$1240 area on gold, paint a lower high and wash, rinse and repeat?

I would love to be more optimistic, but the last three years + have taken their toll.

Nov 24, 2014 - 1:26pm

Achilles Heal

Without transactions at artificial prices those prices mean nothing.

Try delivering all the gold China wants to buy at $900 gold

Exhibit A: GOFO rates

Exhibit B: GLD withdrawals

Exhibit C: Lies and media propaganda

Nov 24, 2014 - 1:35pm


awesome, we can now shower non-subscribers with our brilliance.

Nov 24, 2014 - 1:55pm

Open Interest Is Still HIGH! 54,129

OI is currently 54,129.

Only a few days left. Thus far...about 7k contracts were shaken from Friday. Before that it was about 4K.

I guess the average has been 4-7K contracts per day in the past several days.

If this keeps up, COMEX will not be able to deliver the metal..correct?

7K x 3 days= 21K contracts..subtract from 54K....and we are left with 34K contracts..or over 150,000,000 ozs of silver.

Its way more than doubled what Comex has.


Chuck Diesel BigGamble
Nov 24, 2014 - 1:59pm

re: Silver OI

There are rules limiting how much physical silver an entity can stand for. I don't remember what that limit is, but the takeaway is that it would require a lot of individual buyers to stand for delivery all at once to really drain inventory. If it's just a couple large entities that are standing, then they will hit their contractual limit and settle the balance in cash. David Morgan talked about this a couple A2As ago

BigGamble Chuck Diesel
Nov 24, 2014 - 2:04pm

Thanks for the info

Not sure exactly what the rules are...Ive heard something about a certain limit that the amount of metal each entitiy could take (if it is the large entity). Also heard that if they demand metal but its for investment reason, that Comex doesnt have to oblige to that rule?

Not sure what the technicalaties or details are....still new to this.

Nov 24, 2014 - 2:13pm

RE: Silver OI

If I recall correctly, it's 1500 contracts maximum to stand for delivery. 5k ounces per contract.


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