Setting The Table

80
Thu, Feb 5, 2015 - 10:41am

We've been watching gold be pressured all week in anticipation of a lower rigging on Friday if the BLSBS "exceeds expecations". The process continues today as gold is down even though every single headline I can find could be construed as gold positive.

Whether it's:

  • The continuing Greece-ECB saga: https://www.zerohedge.com/news/2015-02-05/greece-refuses-back-down-gover...
  • A soaring US trade deficit that will negatively impact GDP: https://www.reuters.com/article/2015/02/05/us-usa-economy-idUSKBN0L91UE2...
  • A plummeting Baltic Dry Index, though Forbes of course says it's nothing to worry about: https://www.forbes.com/sites/timworstall/2015/02/05/why-you-shouldnt-wor...
  • Surging layoffs and jobless claims: https://www.zerohedge.com/news/2015-02-05/layoffs-surge-176-yoy-shale-st...
  • US Secretariat of State Horseface placing all of the blame for Ukraine Crisis on the Russians: https://www.cnn.com/2015/02/05/europe/ukraine-conflict/
  • And yet, gold is off more than 1% from it's overnight highs.

    In case you haven't been able to follow along all week, here's what the deal is...

    As of Tuesday January 27, The Cartel Banks were gross short a whopping 323,486 Comex gold contracts or slightly more than 1000 metric tonnes of paper gold. Roughly the paper equivalent of Switzerland's supposed physical hoard.

    This is up from 206,873 contracts short back in October of last year. This 56% increase in under four months has been entirely caused by a flip of bearish Spec sentiment and a return of Spec long interest. Rather than allow price to rise to find a natural, buy/sell equilibrium, The Banks have simply issued new paper short contracts in the hopes of:

    • containing the rally
    • eventually buying back and covering the shorts at minimal loss or even a profit

    Stated again...From early October to late January, The Gold Cartel Banks added 116,613 naked short Comex gold contracts. If forced to deliver the actual metal, this would equate to 11,661,300 troy ounces. Problem is, the entire Comex registered AND eligible vault only holds 8,109,244 troy ounces.

    Hmmm. Since this is somehow all considered "legal" and "fair", it falls to The Banks to somehow rig prices lower so that they can cover these shorts back up and perpetuate the current scam/charade. This is what they are doing this week.

    Regardless of the headlines. Regardless of the continued stories of extreme Asian physical demand. Regardless of the fiat currency devaluation. Regardless of the looming Euro crisis. Regardless of the potential of nuclear-armed Hot War in Ukraine. Regardless of the moribund US economy. Regardless of negative interest rates around the globe. Regardless of the cost of mine production.

    All that matters is that 8 largest Banks are collusively rigging prices lower in the hope that they can get some of the 60 largest Spec funds to liquidate. The Banks' clear goal has been to breach the 200-day moving average and, as yet, they've been unsuccessful. For the ultimate, headline-grabbing bang for their manipulative buck, they're hoping to use tomorrow's BLSBS to inspire the selling needed to finally break down and close price below this important technical indicator. Let's see if we can write the Yahoo Finance or Marketwatch story right now:

    "Following today's surprisingly strong US jobs report, gold fell over 1% and closed below the technically-important 200-day moving average for the first time in three weeks. Analysts interviewed by (insert media here) noted that today's close likely indicates more selling to come and foreshadows an end to the nacsent rally in the yellow metal that seemed to begin in January."

    See how that works?

    Anyway, this is what The Banks and the sycophant media are hoping will happen. Will it actually come to pass? That is the question.

    Below is a reprint of the chart I've posted several times this week. Since I believe that:

    • Gold found a final, physical bottom back in November and December AND
    • Physical demand is unrelenting AND
    • News flow is supportive to continued buying of paper metal derivatives

    I'm looking instead for a bounce and rally tomorrow or early next week. The area in which I'd like to buy an AGE or perhaps even a call option is designated by the red circle on this chart. Will price get there? Probably.

    So, don't get frustrated by the seemingly nonsensical price action. Understand what's going on and why, and then use this knowledge to your advantage.

    Have a fun day and then let's have even more fun tomorrow.

    TF

    About the Author

    Founder
    turd [at] tfmetalsreport [dot] com ()

      80 Comments

    CPE · Feb 5, 2015 - 10:43am

    that Damn HUI

    is NOT cooperating with the monkeys!

    · Feb 5, 2015 - 10:43am

    Other articles

    This is fun. A full review of the German gold repatriation scheme from Bloomberg of all places.

    I, for one, am proud to be one of the "gold bugs" for whom they have such disdain.

    https://www.bloomberg.com/news/features/2015-02-05/germany-s-gold-repatr...

    · Feb 5, 2015 - 10:44am
    CPE · Feb 5, 2015 - 10:45am

    Yep

    And that's a simple confirmation of the ideas behind this post.

    As discussed in yesterday's podcast, maybe tomorrow or Monday will finally bring the surge needed to break the obvious manipulation of keeping it below its 200-day.

    Verus nemo · Feb 5, 2015 - 10:51am

    Turd/Craig

    'Care to comment on the relevance of Imfometron's post on yesterday's vault thread concerning CME's announcement this morning? I'd like to believe that, coupled with their announcement late last year of "trading collars" being imposed, that they too are "setting the table" for what they imagine might well happen this year.

    · Feb 5, 2015 - 10:53am

    Another dropping shoe

    Recall that we've been following this Danish peg situation closely as it is similar to Switzerland AND the Danes are clearly heading down the same path. 

    It is now only a matter of time...likely just a week or two...before Denmark is "forced" to drop this peg, a peg that has been in effect for nearly 30 years!

    This from two days ago: https://www.bloomberg.com/news/articles/2015-02-03/denmark-sells-record-...

    ​This from today: https://www.zerohedge.com/news/2015-02-05/it-will-now-cost-you-075-save-...

    And this chart of Danish 2-year yields as they desperately try to dissuade krone buying. Again, EXACTLY like Switzerland:

    Verus nemo · Feb 5, 2015 - 10:58am

    sure

    1. It's a sad commentary on the state of the "markets". A nod that humans no longer control them. Nothing but HFT and algos remain.
    2. Without human "interference", it is also much easier to control and manipulate prices.
    usk · Feb 5, 2015 - 11:01am
    Dr. P. Metals · Feb 5, 2015 - 11:13am

    Let's Give Another Crack at that Yahoo Headline

    Putting on my old PR hat, and viola:

    "Following today's widely anticipated and expected very strong and robust US jobs report, gold plummeted immediately approaching 2% on the downside, smashing down once again through the technically-important 200-day moving average after lingering above it for no reason whatsoever. Economists interviewed by (insert media here) warned that today's dramatically lower close bodes as an ominous predictor of the coming accelerated selling frenzy as investors rush to dump the metal in fear of further escalating losses. As predicted, this dump foreshadows an end to the pre-pubescent rally in the yellow metal that seemed to begin without due cause in January. This erroneous rise during January confounded all experts who could find no reason for it. This dumping indicates that the prior rise was a falsely rumored trend change to the overwhelmingly bearish down channel, but the bearish trend now rightly reasserts itself. Equity futures once again resumed their march to the upside, reinforcing the expected strong jobs report."

    and for the short headline teaser version:

    "Gold plummets again after strong jobs, resumes bear market downtrend"

    CPE · Feb 5, 2015 - 11:14am

    RE: Let's Give Another Crack

    The trend of negative comments and doubt regarding better prices continues. Well played Dr. P. Bumpkis

    How about using your mind on something more helpful? Turd left you soooo many choices to comment on above, but you selected the one following your trend to expound upon.

    I will patiently await your explanation that it was all satire

    Well played indeed.

    · Feb 5, 2015 - 11:19am

    Diplomatic Hopes in Ukraine?

    Something’s up on the diplomatic front:

    • US Secretary of State John Kerry was to visit Kiev tomorrow, but has moved his trip up and has already landed in Kiev
    • France's Hollande and Germany’s Merkel are flying to Kiev tonight…and then on to Moscow tomorrow
    • Putin has called an urgent meeting of Russia’s security council to discuss the upcoming meeting with Holland and Merkel
    • Kerry is going to meet with Russian FM Lavrov in Munich on Saturday
    • Rumors are that France and Germany are proposing a “frozen conflict” like what currently exists in the Transnetria region of Moldova

    Other things to consider:

    • Last week, the EU agreed to maintain its economic sanctions on Russia
    • The US has recently upped the rhetoric in suggesting they might supply Kiev with sophisticated military weapons
    • The grivna (Ukraine currency)-to-dollar exchange rate fell today to a new low of 25:1. Before Maidan, it was 8:1
    • NAF continues to strangle the Debaltseve pocket
    • One of Kiev’s most relevant oligarchs, Igor Kolimoiski, has indicated through his #2, that Ukraine should hold a referendum on the status of the Donbass. IE, give the country a chance to decide for more war or to let Donbass go its own way. This is pretty big as Kolimoiski has been a major backer of Ukraine’s private armies
    • On Monday, Ukraine President Poroshenko explicitly stated that there will be “no federalized Ukraine” and that “Ukrainian will be the ONLY official language”
    • Poroshenko also said today that he is fully prepared and willing to declare martial law on the whole country

    So what does it all mean?

    • It appears that whatever is going to be discussed has some significance as Russia’s security council met in preparation for the visit. 
    • If the terms of this agreement involve “undetermined status” for Crimea, it’s dead in the water. Hollande has said the proposal is based on the “territorial integrity of Ukraine”, so not looking real hopeful already
    • Based on the initial statements from Kerry in Kiev today, the good ole U.S. of A. sure seems hell-bent on escalating the conflict (see the article Turd linked above)
    • My take is that the conflict in Ukraine is about to be escalated big time by the US and the EU is being pulled in by that inertia. This sure seems to be a last-ditch effort by Hollande and Merkel to avoid that escalation. But, based on what the US is saying (and NATO’s Secretary General), it’s going to take a miracle by Hollande and Merkel to defuse the situation here
    • We MAY get some type of pause to the conflict here, but barring a miracle, looks like it’s on to the next chapter

    So, stay tuned…

    CPE · Feb 5, 2015 - 11:19am
    Dr. P. Metals · Feb 5, 2015 - 11:19am

    @CPE

    RE: "I will patiently await your explanation that it was all satire"

    and wait patiently you shall for a very very long time, because if you don't get that that was satire, you never will.

    · Feb 5, 2015 - 11:37am

    Further evidence

    The Specs are being choked hard.

    The preliminary OI numbers for yesterday show another drop of over 5,000 contracts in gold to 414,492.

    If confirmed, this is the lowest total gold OI since January 14, when price was $1235. See how this works??

    And, at 414,492, total OI is now down over 36,000 contracts (over 8%) from the peak of January 22 when price was $1302.

    · Feb 5, 2015 - 11:37am

    Ukrainian Gold Reserves fall 14.8% in Jan

    According to the press service of the National Bank of Ukraine, the country's gold reserves fell in the last month.

    Reserves on 1 Jan were $7.53 billion (USD)...for 1 February, reserves are $6.42 billion--a drop of 14.8%.

    The statement said that the fall was "largely due to the implementation of government payments and the National Bank of Ukraine to repay and service public and publicly guaranteed debt in foreign currency (US $624.4 million.), including the International Money Fund." The article also says that $464 million was to support payments "Naftogaz of Ukraine" for imported natural gas.

    https://112.ua/ekonomika/zvr-ukrainy-v-yanvare-sokratilis-do-6-42-mlrd-g...

    CPE Dr. P. Metals · Feb 5, 2015 - 11:41am

    Re: @CPE

    You've apparently missed MY sarcasm, and I'll offer I'm not nearly as well versed in it as you. 

    I'll spell out the point, Turd wrote a LOT in the post and then a LOT MORE in the comments. You took his satire and focused only on that, didn't improve it meaningfully, and continued a trend of unhelpful comments that are negative, doubt casting, proof demanding of basic concepts instead of searching it out yourself, etc, etc.

    That's all I have to say about it.

    Dr. P. Metals · Feb 5, 2015 - 11:43am

    @CPE

    You know, you're totally right! I forgot to use the crayon colored font!! My bad!

    H8Fiat · Feb 5, 2015 - 11:47am

    Fed scared?

    I don't believe they're scared at all. I believe that they just don't want Joe Six Pack (JSP) knowing that there is a man behind the curtain. I would bet most JSP's believe that the FED is actually part of the Gov, no idea that it's owned by private banks. It's publicity and the light of day they fear, they can tie up any proposed law in courts for a long long time. If not, they have the second set of books to show. Then they just pay the auditors a few million to go away.

    Just think of all the damage (sarc) caused by the gov investigations into manipulation probes, Bengazi, IRS audits / emails, Fast and Furious, etc. They also own the press so this will be a nothing burger in the end.

    Then only thing that will matter is when we see their smiling faces on milk cartons or snuggled up next to a 16d nailer

    H8

    · Feb 5, 2015 - 11:48am

    Remarkable! Another perfect bounce from the 200-day!

    This setup is so utterly predictable.

    Just moments ago, gold bounced AGAIN from the 200-day MA. The low in the April15 is $1256.80 and I have the April15 200-day at $1255.50. A quick surge/bounce and I have a last of $1263.10.

    Maybe, just maybe, all of this "strength" portends a rally tomorrow. More likely, as laid out again in this post, by continually bouncing price off of the 200-day this week, The Banks will really frighten the Specs when price crashes through the 200-day tomorrow.

    infometron · Feb 5, 2015 - 11:53am

    for what it's worth...

    waiting for the BLSBS

    Once Upon A Fly
    hjh134 · Feb 5, 2015 - 11:53am
    · Feb 5, 2015 - 11:56am

    Finally

    Some MSM coverage of the outrageous Kiev bombing of Donetsk yesterday:

    usk · Feb 5, 2015 - 11:57am

    RE: Ukraine Gold

    And now you know the origin of the new leased Gold by the cartel in the last months.

    · Feb 5, 2015 - 12:01pm

    re: usk

    I was wondering how much you could move the markets in a month with a billion dollars of gold....

    CPE · Feb 5, 2015 - 1:01pm

    @Infometron

    well said! h/t

    I have no doubt that the Au ended up at the Fed, I'm just unsure if it was sold outright, leased but remains in NY or is sitting in J. Fellen's backyard.

    AIJ · Feb 5, 2015 - 1:04pm

    instead of posting long articles

    why don't we post simply the link instead?

    infometron · Feb 5, 2015 - 1:09pm

    @CPE Re: Uke Gold

    When weaving a web of lies, it is hard to cover all the bases. Just as light can penetrate through the smallest of holes, truth also has a way of shining through in one place or another. Here's evidence of a 30 tonne discrepancy in FED gold tonnage accounting. Perhaps the more relevant question is not 'where did the 30 tonnes go?', but rather, 'where did the 30 tonnes come from?':

    Published on Zero Hedge (https://www.zerohedge.com)

    Did The Federal Reserve Make A Major Math Error When Reporting Its December Gold Withdrawals?

    By Tyler Durden

    Created 01/31/2015 - 13:28

    [snip....]

    Whereas in November, the cumulative total correctly hinted that there was more withdrawals than had been disclosed, the December 2014 total suggests that either the Fed just made an egregious math error, one costing literally about $1.1 billion, when keeping track of its entrusted physical gold, or someone is lying.

    [snip...]

    Translated into actual metal, this means that the Fed reported only 10.3 tons of gold withdrawals in the last month of the year, suggesting that there is a quite substantial hole of 30 tons in publicly withdrawn gold that, at least for the time being, is unaccounted for by the Fed.

     [snip...]

    So what happened: did an intern input the Fed's gold redemptions figures for December, supposedly a different intern than the one who works at the IMF and who caused a stir earlier this week [18]when the IMF, allegedly erroneously, reported that the Dutch - after secretly repatriating 122 tons of gold - had also bought 10 tons of gold in the open market for the first time in nearly a decade.

    Or perhaps some "other" bank, central or commercial, decided to offset the redemptions by the Netherlands and Germany, and inexplicably added 30 tons of gold in December? The question then becomes: "who" deposited said gold, especially when one considers that even the adjoining JPM vault which is allegedly connected to the NY Fed by a tunnel [19], only contains some 740K ounces of gold, or about 23 tonnes [20].

    Or is it simply that when it comes to accurately reporting the flows of physical gold, classical math is incapable of keeping track of the New Normal gold moves, and the Fed has decided that even when dealing with physical gold there is a "settlement" period?

    We will find out the answer for sure next month, when unless the Fed revises its 2014 numbers, or plugs the outstanding repatriation "hole" with a late January withdrawal, then a key question will emerge, namely: how can central banks report 2014 inflows of 207 tons from the NY Fed, while said NY Fed only reports 177 tons of outflows.

    And no, the GAAP vs non-GAAP excuse won't work this time.

    For full article, see:

    https://www.zerohedge.com/news/2015-01-31/did-federal-reserve-make-major...

    brokerk22 · Feb 5, 2015 - 1:09pm

    Dollar getting crushed

    Again! What a sham and a mess!

    Kansascrude · Feb 5, 2015 - 1:10pm

    But But But what about Andys comment

    That all of the Sovereign bids are sitting right at $1250 and were front run last week? So they are still waiting for fills. Is that now a moot observation? The BLSBS is going to trump that because the Banksters want a lower market?

    infometron · Feb 5, 2015 - 1:12pm

    @AUAGforever Re: posting long articles

    Taking your point to heart, I've edited down the article accordingly to preserve salient points, and provided link to full article as well. Cheers, Info.

    Become a gold member and subscribe to Turd's Vault

    Contribute

    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 12/10

    12/11 8:30 ET Producer Price Index
    12/12 8:30 ET Consumer Price Index
    12/13 8:30 ET Import Price Index
    12/14 8:30 ET Retail Sales
    12/14 9:15 ET Industrial Prod. and Cap. Utilization
    12/14 10:00 ET Business Inventories

    Key Economic Events week of 11/26

    11/27 9:00 ET Case-Schiller home prices
    11/27 10:00 ET Consumer Confidence
    11/28 8:30 ET Q3 GDP 2nd guess
    11/28 10:00 ET New home sales
    11/29 8:30 ET Personal Income and Spending
    11/29 10:00 ET Pending home sales
    11/29 2:00 ET November FOMC minutes

    Key Economic Events week of 11/19

    11/20 8:30 ET Housing Starts
    11/21 8:30 ET Durable Goods
    11/21 10:00 ET UMich Sentiment
    11/21 10:00 ET LEIII
    11/21 10:00 ET Existing Home Sales

    randomness