The Confidence Game Is Failing

Thu, Feb 11, 2016 - 10:38am

I guess we're beginning to see why gold rallied so sharply last Friday on the afterhours Globex. What we have here are the early stages of a global loss of confidence in the omnipotence of the central bankers planners. As confidence is the only "asset" backing their scheme, a growing loss of confidence is utterly devastating and this begins to lead the world back to the certainty of gold and silver.

Once again, events are moving very quickly so we'll try to sum up as best we can...

The big action overnight was the continued collapse of the USDJPY. It fell rapidly through 113 and 112 before reaching a low of exactly 111.00. This was the maximum pain and embarrassment that the BoJ could bear and they reacted quickly, with an enormous intervention of nearly 2 full points:

But it's not just confidence in the BoJ that is failing, this is a global phenomenon. We have the Swedes moving deeper into NIRP:

European sovereign risk is soaring and DeutscheBank, which just yesterday was "saved", is falling again while its Credit Default Swaps blow out to new highs!

The high yield junk bond market is falling again today, too. As you can see, the proxy for high yield junk...the making new lows and is back to levels not seen since early in 2009.

So, getting back to the USDJPY...we're going to watch this closely. We told you Monday that there was no support until 110 and we told you yesterday that the BoJ would soon intervene. But we also told you that the "half-life" on whatever they did would be very short after the complete calamity of their NIRP announcement two weeks ago. Though the pair is currently 112.34, I still think it's heading to at least 110...if not 106! This means there is still all sorts of equity collapse and gold rally to come.

But now let's get to the fun, silver and the miners!

Not only has gold made a higher high versus October, with today's it has also made a higher high versus May! Not too shabby!!

And look at it on the weekly chart and against The Nemesis Line. IF GOLD CAN CLOSE ABOVE $1242 TOMORROW, I DON'T SEE HOW/WHY IT DOESN'T EXTEND TOWARD THE HIGHS OF LAST JANUARY NEAR $1310.

Which brings us to silver, which gold has "led" since the rally began back in late December (which you'll recall we predicted into heavy levels of doubt). It went something like this:

  • Gold double bottomed and then silver double bottomed.
  • Gold broke back above $1080 and then silver broke back above $14.
  • Gold started to break through its 50-day and 100-day MAs and then silver did the same.
  • Gold broke through its 200-day and then silver rushed to catch up and break its 200-day, as well.

Ah, but here we are. As noted above, not only has gold made new highs versus October, it's also made new highs versus May. And where is silver? It's still below its highs of October! So, will it soon rush to "catch up" again? Why wouldn't it?? IF gold holds and even extends here, why wouldn't silver extend sharply higher? To where? See below:

The HUI has made another new high today as it's currently up 10 points at 159. WOWOWOWOW!! If you want something to pull for today, watch to see it we can close above Monday's highs near 157. The would be a positive sign for the short term.

As I close, I've got $1242, $15.70 and a USDJPY of 112.12. Don't stray too far today. This is getting really interesting!


About the Author

turd [at] tfmetalsreport [dot] com ()


Feb 11, 2016 - 10:41am


Buy MOAR Stack!

Feb 11, 2016 - 10:42am

it's a bad day

For ponzinomics and ponzinomicists everywhere.

Feb 11, 2016 - 10:42am



Feb 11, 2016 - 10:42am


A faster car and you'd be in 4th now.

Feb 11, 2016 - 10:42am



Wow - jackpot!. And on such a crazy day!

Gold in CAD$ is sitting at $1735 (up $68 on the day). It's been a while since we've seen that and I do believe that the last time Gold in CAD was in this range, our Loonie was close to parity with the USD. So .. it would seem that Gold does preserve your wealth through Central Bank currency nonsense.

Feb 11, 2016 - 10:42am

giv me a fifth

of whiskey

Feb 11, 2016 - 10:44am

Ouch way to slow from the hinterlands

submitted far from home. Good day to all

Feb 11, 2016 - 10:45am

Can and wil the Chinese drop

Can and wil the Chinese drop the hammer coming Sunday?

What is different compared to a year ago?

The crashing S&P, Oil, DB bank?

Wil this effect the Chinese dissension to come after Gold sunday night?

And do they have enough ammo?

Feb 11, 2016 - 10:47am

Buyers of size ? Turd refers to

So are we finally seeing the buyers of size show up to the party like in 2011?? Would be nice to end the wash rinse repeat cycle we have endured 

Mr. Fix
Feb 11, 2016 - 10:49am

Fair warning! The gig is up.

The long awaited end of the great Keynesian experiment has arrived.

Although I suspect that the banking cabal still has one last bull trap in store for the paper metal markets, by the time it arrives, the metal will be unavailable.

I will concede, I've been saying all along that there would be no action in the metals until after The economic collapse, but for all intents and purposes, that collapse has now arrived.

The public at large will not be notified until it is way too late to do anything about it. You've probably got between days and weeks left to stock up on preparations for what could be an extended period with absolutely zero commerce, and most probably, extremely high crime, mostly perpetrated by government agents.

There is no use saving any dry powder at this point, it is soon to be virtually worthless.

Just stay out of the way of the carnage as it unfolds.

And keep stacking whatever you're going to need.

Feb 11, 2016 - 10:51am

Craig, are you still looking

for that pullback?

Feb 11, 2016 - 10:55am

Not under these conditions

As we've mentioned...this is all HIGHLY UNUSUAL. Gold, silver and the miners can keep moving up simply because they have been so severely beaten down and the world is just now beginning to wake up to this fact.

Even from the coming CoT and technical extremes, price can continue to rally. There will, of course, be sharp pullback of profit-taking like what we briefly saw yesterday...but I think we all instinctively feel that something significant is happening.

Feb 11, 2016 - 10:56am

Janet Speaks While Gold Sneaks Up from Behind

Don't look now Janet - but GOLD is about to flick the clasp on the back of your bra. (NO Photoshopping of that thought please).

NOW $1245

Feb 11, 2016 - 10:56am

Must....beat....Marchass...10th or thereabouts!

3am in Sydney, and loving the volitility!

my good wife is ignoring me, because I heaped scorn and derision on her announcement the scientists are due to announce gravity wave proofs...

My statement about corrupted scientists chasing establishment handouts didn't go down well.

I stated that every time they run short on funding, they announce that cancer is almost cured. Smoking is not addictive, sugar is not bad for you, wine makes you live longer, a recent study has suggested....blah blah

I have been listening to these imminent cancer cure announcements for 15 years...

I'm still pissed at JP Morguen stiffing Tesla and our whole species.

I better go make nice to her.

Feb 11, 2016 - 10:59am

From Last Thread...

Obama was not born in Kenya, he was born in Manchuria.

Feb 11, 2016 - 11:01am

JP Morgan on CNBC

With the meltdown in stocks sending investors scurrying to safety in gold, JPMorgan Asset Management's Robert Michele said Thursday it's a matter of faith in the metal, or the lack thereof in other assets.

"Gold at $1,200 an ounce, what does that tell you?" he asked rhetorically in a CNBC "Squawk Box" interview. "It tells you that in a flight to quality and a safe haven, people have more confidence in gold than in bank deposits or paper money. I think things have gotten out of control."

Out of control? Maybe out of the bullion banks' control? Maybe about out the central banks control. How appropriate for this morning's missive

Feb 11, 2016 - 11:03am

extraordinary times

I'm inclined to agree. You know when gold is the headline on Drudge, its pretty much the end of the game. I can't ever remember another rally in gold that made headlines, aside from when it was making all time highs in 2011. We are in uncharted waters.

arch stanton
Feb 11, 2016 - 11:04am


It's been 12 hours and I still can't see well. Nightmares last night.

Mr. Fix
Feb 11, 2016 - 11:04am
Feb 11, 2016 - 11:04am
Clarki Stomias
Feb 11, 2016 - 11:04am

MarketWatch Lead: Buy Gold

An actual quote from the article: "Pretty much post-Yellen mayhem out there." Love it.

Feb 11, 2016 - 11:05am

And I failed to mention...

LongBond -8 at 2.45%

10-yr note -10 at 1.60%

2-yr note -7 at 0.62%

2-10 spread now just 98 basis points.

Feb 11, 2016 - 11:07am
Feb 11, 2016 - 11:08am

The scientific method is great...BUT...

Yep, Houston, we have a debate..(raging argument)

I am in trouble now...

Pulled out the big guns...glycophoshphate is so safe you can drink it, GMO perfectly safe, colloidal silver will turn you blue, black salve is black magic...

I will be on the couch pretty soon.

I love pure science, and the quest for knowledge.

I hate weak, pscycophants posing as open minded scientists, adulterating their so called research, so that their snotty oxygen suckers can go to the best schools...

Oh shit, too far, I'm on the couch now!

Feb 11, 2016 - 11:08am
Feb 11, 2016 - 11:11am

Janet and Neg Rates

... AND ... Janet just confirmed that they are seriously studying and considering NIRP - "they are not off the table

Awesome. That statement, in and of itself from a FED Chairman should tell everyone how desperately out of whack things have become.

Feb 11, 2016 - 11:11am
Feb 11, 2016 - 11:12am

She is not a good communicator .....neither am I

Markets demand from her to be more dovish than yesterday....She knows that...Perhaps saying something like "no rate hike in March".....What is she waiting for?....Trying to be a superwoman?

Feb 11, 2016 - 11:14am

Yellen effect

My dog is having a convulsive nightmare while yellen is harping on in the background. The markets aren't fairing much better either. I hope she hasn't ingested a cane toad ( my dog, well dingo actually, Gigi - that is, not Janet). Yellen looks like a cane toad come to think of it. 

Nice impression of her TF. Scary thing is that your impression is more eloquent than she is in reality.

Feb 11, 2016 - 11:15am

American Indexes

One gasp away from new lows. If we do go to new lows today, this afternoon and tomorrow will be an absolute train wreck. Also, if we close the week at new weekly lows (pretty much a certainty unless the S&P can rally to 1880) then things are going to go to hell the next few weeks big time.

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