Mon, Dec 1, 2014 - 10:49am

Tops and Bottoms are often made through wild volatility. While the jury is still out regarding a Bottom, the volatility sure is impressive. In fact, with just a few more ticks to the upside today, both gold and silver will paint TMOAORDs onto their respective charts.

So what was last night? Was the steep selloff just an over-reaction to the SGI rejection? I just don't think so. The decisive 77-23 loss was too great for it to be surprising for anyone in the know...AND...the selloff was too sharp and sudden. It was all during New York Globex hours and it was essentially over 45 minutes into trading. Here's another example of complete BS and misinformation from Kitco:

As noted above, the selloff wasn't in "Asian trading", the "Asian" markets weren't even open yet. The selloff occurred in the first 45 minutes of NEW YORK Globex trading. This leads me to think that it was primarily related to this headline:

Either the Brevan Howard fund itself dumped a bunch of positions OR the steep selloff across ALL commodities was simple fear and front-running ahead of the Brevan Howard liquidations. We'll never know for sure and it really doesn't matter much, given what has happened since.

We first noted the oddity of trading last evening when, suddenly, the gold market went dead quiet. After the steep initial drop, gold then traded in a $2 range for over four hours! See the blue rectangle on the chart below:

It then surged higher, only to appear as if it was simply filling the gap left on the chart from the lower open (blue arrow). Then, just as most folks likely thought the bottom was ready to fall out again, it surged higher still (black arrow).

And now, as I type, gold is 93 and more than off of the lows. Madness.

Of course, what is most encouraging about all of this is the rebound. We've been pinpointing the action around November 5-7 as pivotal and the lows from those days held again last evening. Is the area between 30 and 50 the physical breaking point? Is that the price level at which The Bullion Banks are simply unable to source physical metal for immediate delivery? Have we found the spot where the long-awaited break of the paper--physical connection finally occurs? The action last evening certainly reinforces this opinion.

Take a look at the chart below. Note that, since the GOFO break of 11/6, paper price simply has been unable to stay below the 50 level. Is this due to The Bullion Banks thwarting the Specs by putting down a floor? If so, we would expect to see sharp rebounds from the 50 area and that is exactly what we have seen...especially last night and into today!

And GOFO continues to "worsen". See below and note that the 12-month rate is on the verge of flipping negative for the second time EVER, the only other occurrence being September 29, 1999 at the height of the Washington Agreement panic.

And silver played right along, at one point being down well over 10%, only to rebound sharply as well. I have an overnight low in the March15 silver of .43, just barely overshooting my .65 bottom target and certainly close enough to call it a successful test of that level. Silver is now back to .22 as I type, a full 12+% UP from the lows. WOW! And now it, too, is looking for TMOAORDs.

OK, I'll put you out of your misery...








The intraday highs from Friday were 99.30 and .51. A close above there, after last nights drop, would constitute an Outside Reversal Day.

We'll see, I guess. For now, I'm just glad we're at $1193 and not $1093...

OK, I'd better get this posted but, before you go, please be sure you read these three links. First, this ZH link from Charles Hugh Smith that eloquently states what I was warning you about back on Saturday. Specifically,
"Every sustained action has more than one consequence. Some consequences will appear positive for a time before revealing their destructive nature. Some will be foreseeable, some will not. Some will be controllable, some will not. Those that are unforeseen and uncontrollable will trigger waves of other unforeseen and uncontrollable consequences."

Then there's this. I'm not sure about the guy's math and we certainly have no way of know if Mr. Putin is taking ALL of his oil revenue and plowing it into physical gold. Regardless, this is worth reading:

And, finally, our pal Jim Quinn chimes in with this succinct post that is so simple, even the anti-gold blockheads should be able to understand it:

As I close, I've got $1197 and $16.25. Very nice. Let's see what the rest of the day brings then summarize it all, complete with a CoT recap, with a full podcast review later this afternoon.


About the Author

turd [at] tfmetalsreport [dot] com ()


Dec 1, 2014 - 10:54am


After all the neighing about firsts... for shame, for shame.

Now we can all watch the action, while our fearless leader keeps an eye on the prize! And it is some epic action, no doubt about it- greatest show on earth, and its just getting started.

Dec 1, 2014 - 10:54am

Gold trying to print a "12"

When it does, we may see another very quick jump toward stiff resistance at $1204-1206.

J.P. Cubish
Dec 1, 2014 - 10:54am

Three or four

Interesting day

Dec 1, 2014 - 10:55am

1 and only

I will ever claim.

1st on Epic thread.


I accept all the shit that I will take. I deserve it.

Dec 1, 2014 - 11:06am
Dec 1, 2014 - 11:06am

Am I Turd ?

I mean 3rd.

Edit, I will take 4

Dec 1, 2014 - 11:08am

How Many Times Do We Have to Bounce off $1140-1150

To get a confirmation that gold supply is tight? It looks like the risk levels are decreasing with every bounce and that a trading range might be profitable. I'll take the MOAORD but would rather have the MOASS. Got to build a staircase to somewhere and what we're seeing, if it holds up, may just give us a full year where gold rises. Got a ways to go, but we've got a chance...

Dec 1, 2014 - 11:09am

Got to admit I didn't see this one coming...

The nice thing about my ChartChatter tool is that it keep me honest with myself. I caught the first part of the downdraft right but missed the final spike down and then all of the ride back up:

Not bad, not great, but then again, I don't know anyone anywhere who called our FUBM today. I wouldn't have expected it in a million years last night.

Mads Trauson
Dec 1, 2014 - 11:09am

Brevan Howard

If you read in the press about Brevan Howard liquidating a fund rest assured that the selling will ALWAYS have taken place already.

Dec 1, 2014 - 11:11am

The post SGI beatdown didn't last very long.

perhaps the underlying upward pressure on price is stronger than we thought.

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Key Economic Events Week of 9/3

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Key Economic Events Week of 8/26

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