Moving Forward With Deliberate Intent

Tue, Dec 1, 2015 - 11:32am

We'll have to wait to see what happens this month but, since the last six weeks have played out almost precisely as forecast back in October, it's time for me to start implementing my plan to capitalize on what comes next.

As we discussed in yesterday's podcast, the CoT from last Tuesday showed the most bullish gold structure in memory. In fact, Uncle Ted confirmed this late yesterday. His quote:

"In COMEX gold futures, the commercials reduced their total net short position by 16,500 contracts (I guessed more than 10,000) to 12,000 contracts; which I believe is the lowest (most bullish) commercial net short position in more than 12 years."

So, having correctly anticipated the downdraft from the extreme capping event of mid-to-late October, why would we now hesitate to position ourselves to take advantage of the inevitable rebound?

To that end, my pal Jim Comiskey secured for me this morning a "buy-in" at The Casino. In a sense, I stepped to the blackjack table and pulled out nine, crispy hundos and laid them on the table. In exchange for the cash, I was given a "chip" that is a call on February gold. It expires on January 26 and it has a strike price right at the critical $1105 level.

And, in what could be an incredibly fortuitous bit of timing, I received some good news last month. A former employer of mine suddenly offered to cash me out of an old defined benefit plan. They asked if I wanted a check NOW instead of a small, monthly stipend when I turn 65. My reply was "F YES!!" The check arrived last Friday and I've decided that, since it's basically "found money", that I'm going to start accumulating some miners.

Again, the timing couldn't be better because...take a look at this chart of the HUI. Not only is 105 holding again, the RSI is trending higher AND the daily MACD lines have bullishly crossed. If the index can fill and break through the gap on the chart near 113, it's going to look like it's set for a year end and early 2016 rally.

I also just bought my first gold Britannia. Yes, I realize that I paid about $90 over spot...but I don't care. I was able to use my PayPal account, which is where I accumulate all of the "donations" you all so generously share with me and, with where gold is eventually going, overpaying today by $20-30 is of little importance. Additionally, I used JMB but I could also have used Provident, or GoldenEagle. It was simply JMB's turn.

So, we'll see. Tomorrow brings ADP and Friday is The Big Kahuna...the BLSBS. I expect a lousy number and downward revisions to the previous two months. If I'm wrong...meh, whatever. I'll just use the continued weakness to accumulate some more. Again, I fully expect a rally after the FOMC in two weeks. Whether or not Mother Fellen raises rates will only affect the ferocity with which the rally begins.

Check out this daily gold chart. Could we be seeing the makings of a false breakdown through $1080 and the formation of a reverse H&S with $1065 as the shoulders and $1050 as the head? Maybe. The key will be in seeing if gold can maintain above the $1065 level that had initially acted as support last month and now serves as the "neckline".

And, as discussed yesterday, I'm holding off on silver...for now. Though the CoT is sufficiently "washed", there's still room for one or two more spin cycles. I will almost certainly, however, have some trading positions on before Dec 16 at 2:00 pm. Let's see what this Friday's CoT reveals before making any decisions...I want to see silver crack back above $14.40, too.

Speaking of Mother Fellen, as we head toward the BLSBS and the FOMC, one thing you MUST keep an eye on is the bond market. Just today, the 10-year is down 4 bps to 2.18% and the 30-year Long Bond is down 5 at 2.94%. Just three weeks ago, those yields were 2.36% and 3.12%. That's a pretty big freaking move that NO ONE is talking about. All the while, the 2-year note has moved up from 0.89% to today's 0.92%.

So, both the 2-10 and 2-30 yield curves have flattened by 21 bps since mid-November and the spread in the 2-10s is only 126 bps or 1.26%. That's the most narrow and "flattest" it has been ALL YEAR. That's not good at all in the traditional, Keynesian sense as a flat yield curve is almost universally believed to be a precursor to recession. Here are a collection of links I found simply by googling "flat yield curve". Some of these date back nearly 10 years:

And this is why I believe that, whatever Mother Fellen decides in two weeks, gold (and silver) is going to go UP. Even if she does raise the Fed Funds rate by a few ticks, all she'll be doing is setting the table for a rate CUT next year...maybe even more QE. The collective "market" will quickly figure that out and begin to anticipate it...and UP will go the metals...particularly into year end and January.

So, relax and be happy, my friend. Things are about to get very interesting AND it's the holiday season so put a smile on your face and be of good cheer.

I need to wrap this now so that I can get to work on that S&P "candle" update. We'll be back later, though, with a full podcast summary and review so don't be a stranger.


About the Author

turd [at] tfmetalsreport [dot] com ()


Dec 1, 2015 - 11:37am
Dec 1, 2015 - 11:43am



silver bullion: Many stacks of old silver dimes face on to camera and illuminated with blue light

Dec 1, 2015 - 11:44am

turd third

weee wipe it up

Dec 1, 2015 - 11:50am


Still trying to understand the pricing of calls. What would you expect your call to be worth if gold was around a $100 higher mid January.

Dec 1, 2015 - 11:56am


So, if by Jan 15, Feb gold is trading at $1170? My $1105 will be $65 in the money plus it will have just a slight premium to it, maybe 70 or so...which would make it worth $7000.

That'd work!

Dec 1, 2015 - 11:58am

nothing really

the imf made the yuan/sdr announcement.

part of the ongoing covert effort to replace their broken usd-silver (and gold) charts (w/ cny-silver and gold charts)

even the climax of this failure won't be a big deal, but it is a known upcoming event (spoiler alerts were posted here over 2 years ago, "hello") leading to the end of privately owned charts controlling the price of physical Silver and Gold transactions, 

someone asked earlier why the global metals pricing mechanism is blah blah blah... etc etc? but that's not the question. the question is- why is there a single global (privately owned) metals pricing mechanism in the first place?

then you'll see what's going on here. and how this system ends.

Dec 1, 2015 - 12:00pm

mr craig...

we get this trading show up and going yet..... just going to sit back and be entertained for now... keep the updates coming mr craig.....

Dec 1, 2015 - 12:02pm


Yes, thanks, but doesn't the call give you the right to buy 100 times that?

ned braden Orange
Dec 1, 2015 - 12:07pm

@ Orange,

That's right!

TF needs to have his very own shiney Crimex 100 oz. Bar for reference when history is written....he simply needs to pony up about a 100K more FRNs.....

Dec 1, 2015 - 12:08pm

Stamford bridge

battle of 1066

Dec 1, 2015 - 12:12pm


wait, just got it. $70 x 100 = $7000

4 oz
Dec 1, 2015 - 12:14pm

Fantastic! A Different Show...

I’m completely captivated by this. Click on below and go full screen.

An adventure in computer technology, miniaturization and imagination!

Update on the German Wonderland.

Dec 1, 2015 - 12:24pm
Dec 1, 2015 - 12:25pm

There you go!

See, not so tough after all.

Dec 1, 2015 - 12:29pm


Does anyone have any insight as to timing for a launch of the Allocated Bullion Exchange (ABX). If I recall correctly, they were originally intending to launch last spring - then delayed for a couple of months - and now as of Dec 2015 they are still at Top Dead Centre.

There was much speculation that the ABX launch would be a 'game-changer' .. oddly we continue to wait. Given the current COMEX situation (inventory, etc), one would surmise that a launch of ABX at this point in time would 'indeed' make the Gold market pretty interesting.

EDIT to ADD: Having said all that - I suppose the ABX could drive down paper price (real gold going the opposite direction) and that might put Turds 'calls' in jeopardy.sad (But what do I know? - pretty much zilch).

Dec 1, 2015 - 12:33pm


Chuck Butler (Daily Pfennig)....About renminbi in SDR basket:

" The Big loser in the deal was the euro...The euro saw the largest decrease in weighting (6.47%)...And the U.S. dollar saw the smallest (0.17%) decrease.....What? What? You don't think that there was a smoky back room negotiations going on whereby the U.S. agreed to allow the renminbi into the "club" as long as their weighting didn't take a big hit do you?

Dec 1, 2015 - 12:37pm

Bully....double post

angry My computer is a bully.

Dec 1, 2015 - 1:00pm

rbc comments fwiw

Gold – Key Catalysts for the Week Ahead – Yellen speaking Weds/Thurs, Non-farm Friday

  • Tuesday 1st December – China Nov NBS Manufacturing PMI/Non Manufacturing PMI –Prior: 49.8, 53.1 – 8:00pm EST (Monday night) – Weaker Chinese data would likely be CNY negative, dollar positive and therefore incrementally negative for gold.
  • Tuesday 1st December – Caixin Manufacturing, Services, Composite PMI –Prior: 48.3, 52, 49.9 – 8:45pm EST (Monday night) – Weaker Chinese data would likely be CNY negative, dollar positive and therefore incrementally negative for gold.
  • Tuesday 1st December – US ISM Manufacturing Index – RBC: 51, Cons: 50.5, Prior: 50.1 – 10:00am ET – A higher than consensus number would likely be negative for gold. 
  • Wednesday 2nd December – Yellen speaks to Economic Club of Washington – 11:00am ET – This is likely the last time we will hear from Yellen ahead of the December 16th FOMC meeting so the speech will take on even greater significance. The general tone within the FOMC suggests there is broad consensus to start liftoff in December and with only a couple of weeks separating this speech and the first rate hike in over a decade there is no room for ambiguity. Look for Yellen to stick to the hawkish leaning script. We expect hawkish comments to put gold under some pressure.
  • Wednesday 2nd December – Fed Beige Book – 2:00pm ET – Positive economic sentiment from the Fed’s Beige Book will likely heighten expectations of a rate hike in December, and subsequently see a weaker reaction by gold.
  • Thursday 3rd December – US Initial Jobless Claims – RBC: 260k, Prior: 260k – 8:30am ET – A lower than before number should be a negative for gold.
  • Thursday 3rd December – Fed Chair Yellen testifies to the Congressional Joint Economic Committee on The Economic Outlook – 10:00am ET – As we note above, hawkish comment from Yellen would likely be negative for gold.
  • Friday 4th December – November US Nonfarm payrolls, unemployment rate – RBC: 230k, 4.9%; Cons: 200k, 5.0%; Prior: 271k, 5.0% – 8:30am ET - Our view remains that the ramp-up in holiday hiring plans will help boost payrolls back above the recent trend over the course of Q4. The October payroll read was a testament to this, with private jobs increasing by a sizeable 268K on the month. We think another north of 200k read is in the offing for November. Accordingly, the unemployment rate is likely to slip to the Fed’s explicit full employment level of 4.9%. More broadly, initial jobless claims (the firing side) continue to trend at all-time lows on a LF-adjusted basis while job openings remain near a robust 5.5 million. The prospects for near-term job growth remain very constructive. A stronger number for the nonfarms or a drop below 5% in the unemployment rate would likely be negative for gold.
Dec 1, 2015 - 1:10pm

I found "F YES!!" money too

Looking for a miner now.

Dec 1, 2015 - 1:12pm


Welcome back! 

bp9291 SS121
Dec 1, 2015 - 1:17pm

how the system ends

and so how do you think that will be? thanks Joe

Dec 1, 2015 - 1:18pm


Is that a futures contract or a call on GLD?

Angry Chef
Dec 1, 2015 - 1:20pm

Watched This Last Night


I watched this last night. It's almost an hour long but it's worth the time. We're not going to defeat these guys holding our dicks carrying a mummy tummy. According to this they've been around since the 6th Century and growing stronger. Apparently they plan things 120 years in advance. And of the 7 World Wars they have planned and executed, the 7th is in the works. It is of course the 700 YEAR OLD BANKING CABAL.....

700 Years Banking Cabal by William Stuart
J Siefert
Dec 1, 2015 - 1:26pm


Without giving investing advise, could you tell us what in your estimation would be the nearest equivalent of a CALL on the ETF GLD? There appear to be two expiry dates near to Jan 26. One is Jan 15th and the other is Feb 19th. The nearest strike price to to $1105 for the GLD would be $110.0.

KeynesianKryptonite J Siefert
Dec 1, 2015 - 1:34pm

@ Turd -- Jim Comiskey's Contact Data


If its available to be made public, could you please post Jim Comiskey's current contact information.

Thanks, and keep up the great work for all of us here!

Basil Geter
Dec 1, 2015 - 1:36pm


Thanks for this.

There are a total 8 bullet points relating to forthcoming announcements and events over the next couple of weeks , and each and every one of them predict a negative impact on Gold !!?

The worrying thing is that it's probably correct !!!

Dec 1, 2015 - 1:54pm

Speaking of flat yield curve and recession

Check out the latest update of the Atlanta Fed GDPnow. Sure looks like a roaring economy to me!!!

Dec 1, 2015 - 1:58pm

Some answers

  1. I bought a call on the Feb16 futures contract
  2. That's looks to be the equivalent of about 105.50 on the GLD
  3. JimC can be reached at 224-210-7365
Dec 1, 2015 - 2:06pm
Dec 1, 2015 - 2:15pm

December 1, 2015 Santiago,

December 1, 2015

Santiago, Chile

They called it a “historic moment in international finance”.

And so with great fanfare, the International Monetary Fund (IMF) announced yesterday that they would be including China’s renminbi in the basket of currencies that comprise their institutional monetary unit, the SDR.

The IMF invented the SDR back in 1969 to be used as a foreign exchange reserve held by governments and central banks.

Now, the SDR is nothing fancy. It’s really only something that economists and central bankers fawn over, with no real impact on anyone else.

Even the IMF considers the SDR’s role in international financial markets to be “insignificant”.

But that’s not all that makes the IMFs decision completely irrelevant.

For starters, just look at how they reconfigured the percentage weights of other currencies in the SDR basket to make room for the renminbi.

The British pound’s weight in the SDR will fall from 11% to 8%, the Japanese Yen from 9% to 8%, the Euro from 37% to 31%.

Conspicuously absent from this list of demotions is the United States dollar, which maintains a rock-solid 42% weighting.

In doing this, the IMF proves itself to be nothing more than a lapdog of the US.

More importantly, who cares about the SDR?

The market has already been rapidly adopting the renminbi for years.

It is today already the fourth most widely used currency in all international payments. And the renminbi ranks second for global issuances in letters of credit.

This means that for international trade, especially in Asia, renminbi use is exploding.

Everyone is on board this train. Everyone except the United States.

The US dollar has been the dominant reserve currency since the end of WWII, on terms that were dictated by the US government practically by gunpoint.

And in the decades since, they have continually and viciously abused this privilege, violating the trust of the rest of the world.

It’s no wonder why there is now so much demand for an alternative.

This has happened so many times throughout history. Dominant reserve currencies come and go.

A thousand years ago, the Byzantine solidus was the dominant reserve currency in the world. But people lost confidence in it after the solidus was continually debased.

So they sought an alternative in the Venetian gold ducat. This has happened again and again.

A reserve currency is like a language. People around the world, from Bali to Bangladesh, learn English, simply because so many other people use it.

At this point in time, English is widely accepted as the common international language.

But that too is not permanent.

Greek at one point was the dominant language. Then Latin. Eventually French. And now English.

Just as it is now becoming more commonplace to learn Chinese, so too is it becoming commonplace for banks, investment funds, governments, and central banks to transact in renminbi.

Multinational corporations are issuing renminbi-denominated bonds. International commodities exchanges are launching renminbi-denominated contracts.

And even the Brits and the Canadians are vying to be major international renminbi clearing centers.

This is absolutely happening, and the dollars days of denominating the global financial system are dwindling.

The fundamentals are clear. There’s too much debt. There’s too much manipulation. The US central bank is nearly insolvent.

It is foolish to believe that the US dollar is going to last indefinitely.

What’s really interesting, though, is that China is also in bad shape.

They have a looming debt problem, credit crisis, and a financial morass that could turn into a major depression.

So while the dollar may be in its twilight, the real change we’ll see is the financial system itself.

Today, unelected bureaucrats and central bankers conjure money out of thin air and manipulate asset prices in their sole discretion.

OK, maybe three centuries years ago when most of the world was illiterate and few people traveled more than ten miles from their homes, this might have been an understandable way to set up a financial system.

But today? Give me a break.

This system is so outdated that the head of the IMF might as well have gone to her press conference by horse and buggy.

All the technology already exists to make the overlords of our financial system totally irrelevant.

And what’s even more exciting is that they know it.

The Bank for International Settlements, which can be thought of as the central bank of central banks, released a report last week saying that cryptocurrencies and emerging financial technologies essentially make them an endangered species.

This system is changing.

Whether you like it or not, whether you realize it or not, and whether you’re prepared or not-- it’s happening.

You can either have a front-row seat to enjoy the show and benefit from these developments, or you can choose to do nothing and become another victim of history.

But make no mistake, it’s happening. And looking back, it’s going to seem obvious.

Until tomorrow, 

Simon Black


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 1/21

1/22 10:00 ET Existing Home Sales
1/24 9:45 ET Markit Manu and Svc PMI
1/24 10:00 ET Leading Econ Indicators
1/25 8:30 ET Durable Goods
1/25 10:00 ET New Home Sales

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

Recent Comments

by Sound Money Minnow, 13 min 42 sec ago
by Marcus, Jan 21, 2019 - 11:48pm
by sierra skier, Jan 21, 2019 - 8:59pm
by NUGTCALL, Jan 21, 2019 - 8:54pm