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

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    turd [at] tfmetalsreport [dot] com ()

      80 Comments

    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.

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