Breakout or Fakeout?

Thu, Mar 3, 2016 - 11:07am

That's the big question today? There's all sorts of lousy economic news out there, which is weakening the dollar and USDJPY, which in turn is driving the metals higher. So, is this a breakout to new highs or just another fakeout before a massive Gold cartel raid?

And that's the dilemma this morning. For the past two weeks, I've been giving you that chart with the trendline that goes back to New Year's Eve. This line was pressing up against what was clearly a Cartel-painted cap. And now today...the day before the BLSBS...a BLSBS that will be used for the next 10 days to rationalize/justify whatever Mother Fellen announces on March 16...prices break to the UPside. Not only is gold back above $1250, but silver is back above it's 200-day MA, too. See here:

And what I can't get out of my mind is October 28. Back then:

  • Gold had been aggressively capped for two weeks at/near its 200-day MA
  • Silver was also being capped at its 200-day
  • Both Cartels had recently built up massive NET short positions defending these levels
  • That day brought the conclusion of an FOMC meeting with Fedlines at 2:00 pm
  • And both gold and silver rallied. Gold did NOT make new highs but silver did, reaching all the way to $16.38 and seemingly drawing in every last single Spec long
  • Here's the post from that morning:
  • Price was immediately smashed at 2:00. This began just another Wash-and-Rinse cycle and price declined for the next six weeks, all the way to new lows.

I trust that you, my dear reader, can clearly see the obvious parallels.

So, what to do, what to do??

However, there does appear to be a major difference this time...and I'm not talking about sentiment or the HUI or the economy. As present, and as opposed to last October, and it's the all-important USDJPY.

Back in late October, the yen had already fallen sharply while gold was still hanging around its 200-day. Check this chart from the post of October 29. Can you see the relative gap between the two?

Here's a paragraph of text from that Oct 29 post:

"Since this remains the case today, it is incumbent upon us to watch the yen for clues as to the "relative" price of gold and the long-term trend. To that end, check the chart below. This is not the regular USDJPY but the inverted JPYUSD...the same forex pair as shown on the chart above. Note that, over the past two months, the yen is virtually unchanged at present but gold is slightly UP. Therefore, in forecasting how far gold might fall in this current Spec wash cycle, why not look to where gold was the last time the yen was at these levels? Hmmm. Looks to me to be around $1115-1120."

So, is this the case today, March 3? Not so much. The yen continues to rally and it's inverse, the USDJPY, continues to fall due to all of the reasons we routinely discuss here. Below is your current chart:

Therefore, I'm going to try to split the difference. They may try to raid tomorrow and I expect ole Hampton Pearson to cheerfully spout an NFP that mildly "beats expectations". However, even if price IS smashed, I DO NOT expect a full onslaught of least not yet. If anything, price will be driven back down toward the primary trendline, maybe even to the blue secondary trendline. From there we'd have to tread water and rebuild ahead of the March 15-16 FOMC.

However, there's also a possibility that the BLSBS will slightly miss expectations. This would cause a rally in the metals tomorrow and prices would close at new weekly highs for 2016. This would engender even more buying next week.

So, in splitting the difference, I'm trying to adjust the one trading position that I have left. At present, I still own one April gold $1300 call. I bought it three weeks ago and I'm up just a little bit on it. Instead of outright selling it today, I'm attempting to create a spread. This limits my downside but caps my upside...splitting the difference, you might say.

One more thing to watch today are the ass-kicking miners. I have a last in the HUI of 171.40. This is UP 5.52 on the day and is also new highs for 2016. Let's hope this continues, too.

Here are a few fun links for you to review:

And there's still time to register to join us for A2A with Alasdair Macleod at Noon ET today. As usual, we'll record the call and post it this afternoon in lieu of a podcast.

Have a great day!


About the Author

turd [at] tfmetalsreport [dot] com ()


Mar 3, 2016 - 11:09am



TF Metals fan
Mar 3, 2016 - 11:11am

I take a second

Let us have some fun today!

Mar 3, 2016 - 11:12am

either way it looks sweet

either way it looks sweet shows what's coming to the toerag bankers when this collapses

TF Metals fan
Mar 3, 2016 - 11:12am

I take a second

Let us have some fun today!

Danforth Coxwell
Mar 3, 2016 - 11:29am

Top 10?????

Well the liberals have sold Canada's last ounce of gold at $1234.90 on February 29th.. Well done boys (and girls). Just could help but notice that the P.O.G is now $1255.40. Again well done boys (and girls). 

The bottom in the P.O.G has been set.....and only a liberal could find it. We are so fukced in Canada.

Mar 3, 2016 - 11:31am
Mar 3, 2016 - 11:32am

Yamada Turns Bullish on Gold

It's a significant turn of opinion for a technical analyst.

Danforth Coxwell
Mar 3, 2016 - 11:33am

RE: Canada selling all of its' gold…...

For more details go to Zerohedge. I do not know whether to laugh or cry!

Mar 3, 2016 - 11:34am

And The Evil Ones are still

And The Evil Ones are still laying it on thick...Total gold OI up another 6,400 yesterday to 457,000

Mar 3, 2016 - 11:42am

OK, now watch closely

If the USDJPY drops toward and through those lows of yesterday, gold is going to surge higher and take out the highs of Feb 11.

USDJPY last: 113.40

Apr gold last: $1257.60

Mar 3, 2016 - 11:43am


No longer needs to agonize over all those wild swings in the gold price. Now we can boast a nice stable reserve portfolio, no longer ENCUMBERED by barbaric old rocks...stone age monetary policies, if you will. I for one feel much relieved by this. I am sure that we can only now relax and enjoy a nice, steady increase in $CDN, house prices (outside of Van & TO), wages, job creation, and quality of life in general.

In short, hallelujah and welcome to the modern age!!! Time for a new bumper sticker: "Kiss a Banker", or "Hug Your Banker".

sarc to go upchuck

Mar 3, 2016 - 11:45am

March 3, 2016 Bangkok,

Company Logo

March 3, 2016

Bangkok, Thailand

In the middle of a heated battle against my jetlag yesterday, I finally decided to exercise the nuclear option and turn on CNBC in order to stay awake.

I figured someone would say something completely ridiculous, and it would get my blood boiling enough to power through the next couple of hours.

Within minutes I saw a top economist for Moody’s (one of the largest rating agencies in the world) saying that there are absolutely zero signs of recession.

Boom. I was suddenly so wide-awake it was like that adrenaline scene from Pulp Fiction.

I couldn’t believe what I had just heard. Moody’s. No recession. Seriously?

In addition to being criminally complicit in committing widespread fraud that fueled the housing bubble ten years ago, Moody’s takes advantage of every opportunity to show the world that they don’t have a clue when it comes to economic forecasts.

It’s like what Churchill said about democracy-- it’s the worst form of government, except for all the others.

Well, Moody’s is the worst rating agency and economic forecaster… except for all the others.

These are the same guys (along with their colleagues at S&P, Fitch, etc.) who totally missed the boat on the housing market and slapped pristine credit ratings on subprime mortgage bonds.

They also missed the boat on the subsequent banking crisis, giving strong ratings to Lehman Brothers and AIG right up through September 2008.

Lehman, of course, went bust that month. And AIG had to be bailed out by the taxpayer.

Moody’s and the gang also missed the rest of the global financial crisis, the collapse of Iceland, Greece’s bankruptcy, and just about every other significant financial event since… forever.

These guys are so drunk on their own Kool-Aid that in October 2007, Moody’s announced that “the economy is not going to slide away into recession.”

In December 2007, they called the bottom in the housing market, suggesting that prices would not fall any further.

Of course, the following year, the entire world was engulfed in the biggest financial crisis since the Great Depression.

Moody’s didn’t see it coming. Wall Street didn’t see it coming. The Federal Reserve didn’t see it coming. Governments didn’t see it coming.

Everyone assumed that the good times would last forever.

So when the agency that consistently fails to predict recession predicts that there will be no recession, you can pretty much guess what’s going to happen next.

This is what virtually assures negative interest rates in America.

Central banks almost invariably cut interest rates amid economic slowdown.

And over the last seven recessions in the Land of the Free, the Federal Reserve has cut interest rates an average of 5.68%.

The smallest cut was in the 1990 recession when the Fed lowered rates by 2.5%. The greatest was in 1982 when the Fed slashed rates by a massive 9%.

Think about it-- rates right now are just 0.25%. So even with a tiny cut the Fed is almost guaranteed to take interest rates into negative territory in the next recession.

We can see the effects of this in Europe and Japan where negative interest rates already exist.

Negative interest rates destroy banks. They eat into bank profits and force them to hold money losing toxic assets.

Bank balance sheets become riskier, and people start trying to withdraw their money as a result.

In Japan (which just recently made interest rates negative), one of the fastest selling items is home safes, which people are buying in order to hold physical cash.

In Europe (where negative interest rates have existed for a while longer), bank controls have already been put in place to prevent people from withdrawing too much of their own money out of the banking system.

This is a form of capital controls-- a tool that desperate governments use to trap your savings within a failed system and steal your prosperity.

Wherever you see negative interest rates you are bound to see capital controls close behind.

In light of this data there are fundamentally two courses of action.

1) Hope. Pretend that everything is going to be OK until the end of time.

2) Action. Take sensible steps BEFORE any of the metaphor hits the fan.

One of the easiest things you can do is withdraw some physical cash out of the banking system.

Buy a safe and hold 50s and 20s (they might ban the Benjamins, so avoid $100 bills). And don’t take out more than a few thousand dollars at a time.

It’s hard to imagine you’re worse off for keeping a safe full of cash.

Even if nothing bad ever happens in the banking system, you can still use the cash. And all you’re missing out on is 0.01% interest in your checking account. Big deal.

But if the trend continues and capital controls arise, the value of cash (and gold for that matter) will go through the roof. And you’ll wish you had acquired some while you still had the chance.

Until tomorrow, 

Simon Black


Mar 3, 2016 - 11:49am

Hong Kong exchange will

Hong Kong exchange will launch a gold futures contract that’s actually gold / By Eduard Gismatullin / 2016-03-03 13:30

Hong Kong Bourse Revamps Gold Futures Targeting China’s Wealth

By Eduard Gismatullin
Bloomberg News
Thursday, March 3, 2016

Hong Kong Exchanges and Clearing Ltd. plans to revamp its gold futures, targeting Chinese investors after ending the previous contract a year ago.

The new contracts will be for physical delivery denominated in yuan and U.S. dollars, said Romnesh Lamba, the co-head of market development at the bourse. The previous contract, which was started in 2008, was cash-settled and quoted only in U.S. dollars. It was suspended after gold pricing was transferred to an electronic auction on March 15 from a century-old procedure. …


Mar 3, 2016 - 11:52am

Suddenly the USDJPY is 25 pips off lows

Could this be an attempt to paint a double top in gold?

Feb 11 high $1263

Today's high $1261

Mar 3, 2016 - 11:59am

Damn That Was A Long Wait

Waiting for the top 10 to get through needs patience. Hope the PM's climb to get me out of this down mood. Hear that swineflogger? Look what you've done to me, it's no fun not being in the top 10. Keep Stacking

Clarki Stomias
Mar 3, 2016 - 12:04pm

Double Top

 Funny you just posted that, Turd. As I have been thinking that all day. I think they might be. We'll see. Bounce of USD/JPY off mid-113.30's was certainly timely though.

Mar 3, 2016 - 12:23pm

The caps R set!

Gold = 1258

Silver = 15.15

Let's see if the bad guys can make them hold...


Update: 11:23am Caps Holding Strong...

Mar 3, 2016 - 12:30pm

(Canada Gold) think of it this way...

imagine Canada, China, Germany, the U.S., and Azerbaijan all sitting around a table playing Monopoly. Their little paper Monopoly currencies are all different, but they have the same numbers and all spend the same when buying the properties and Railroads and such.

As the Monopoly game plays on, Azerbaijan says that he has a Gold coin in his pocket. "that's great" say the others. Then Canada says, "I used to carry a Gold coin in my pocket but i don't have it anymore". "how fascinating" say the other players, and the game goes on. Because, as you see... whether or not the players have Gold coins in their pockets is just something to talk about. Their little paper monopoly currencies are valued according to the rules of the game and not the content of the player's pockets.

A nation's "gold" holdings... same thing. In and of itself it means nothing. The USD relative value of all currencies is currently set by the system's Fx chart. That's the rules of the game.

The system maintains the perception of gold's association to the currencies to monetarily validate the Monopoly currencies, which then monetarily validates the Monopoly game. that's all.

Mar 3, 2016 - 12:37pm

Christmas show 2015 - Bankruptcy Misconduct Website

Bankruptcy Misconduct presents the Delaware dirty lawyer and their Hedge Fund Friends Christmas Show

There is so much to say about this Christmas work of art. There are many bankruptcy "professionals" depicted in the video who already appear on the pages of

The cartoon character dressed in bird feathers gave a speech about Donald Trump today. 

Be sure to play this video in High DefinitionThere is a selector for two higher resolution versions, up to 720p HD video if your internet connection can handle it.

Angry Chef
Mar 3, 2016 - 12:46pm

Canada's Gold Reserves

OK. So I read the article....

And then I read this article....

Global Central Banks Continue Longest Gold-Buying-Spree Since Vietnam War | Zero Hedge

Somebody is on the wrong side of this trade.

So what assets are we holding ? Hockey sticks, Touques, Maple Syrup ?

I get the feeling Eric Sprott will one day be the Governor of The Bank of Canada. And when the day comes where everybody has to open the komono. Eric and his funds will be "hypothecated " to " save the country ".

In the meantime, I'll keep stacking....and it won't be hockey sticks, touques, and maple syrup ( I love that stuff ).

aomegaa SS121
Mar 3, 2016 - 12:54pm

Life is not a game though

Sure it seems to be right now like the Kardasians, the oscars and all that bullshit. But when life gets as serious as a heart attack those little pieces of paper will be good for wiping your ass!

Mar 3, 2016 - 1:02pm

got to admit....

I did not expect the double top move on the part of the chart painters. So, is there a chance the formation can be nullified, and what would do that?

Mar 3, 2016 - 1:06pm

A lousy or "at expectations" NFP would help

Maybe we can get the USDJPY down into the weekly close tomorrow. This would help push gold even higher, obviously.

Watch, too, the action tomorrow vis a vis the weekly chart. The close on Fri Feb 12 was $1239. Regardless of the daily double top, a new weekly closing high for 2016 would be quite constructive.

Mar 3, 2016 - 1:06pm

Wow! Great A2A!

That Alasdair is something else. Will post in a couple of hours.

JQuest SS121
Mar 3, 2016 - 1:07pm

(Canada Gold) think of it this way... Yes but....

Yes SS121 you're correct in your post to the point in the game monopoly money has believed value, but if you're playing corrupted rules monopoly and all of a sudden there's endless amounts of money in the bank and you can borough endless amounts of money as needed pretty soon everyone knows the value is meaningless and no one will ever win or lose and there is no game.

That's the point there aren't endless amounts of gold to corrupt.


Mar 3, 2016 - 1:07pm

Good News

I just received a call from my retirement plan broker, he was responding to an email from me containing recent charts on gold and the HUI. He told me that gold was worthless because it's valued in US Dollars and if the dollar goes down then gold doesn't hold it's value, and if the dollar goes up then it's better to hold dollars. No, I'm not kidding. I've been saved. Good news. I hope you all can learn something from this and exchange all your gold for those valuable dollars.

Mar 3, 2016 - 1:09pm

What a complete IDIOT

Amazing. And people take "advice" from this guy...

"disillusioned by the fraud known as financial services..."

Mar 3, 2016 - 1:14pm

Mitt Romney is a dick

Former Bain Capital Private Equity dick gets the big payoff from Wall Street to trash Trump so they can run "their" whore into the fight. Disgusting.

Verus nemo
Mar 3, 2016 - 1:18pm

Your retirement plan "broker"

needs to be fired, post haste. He will, in time, truly be "broker" as will all his clients.

Hummm....what subject has now been missing from K-12 education for generations? Could it be maybe be formal logic? Somehow I think that the teaching of washy "critical thinking" skills just hasn't served us well. It's probably just me...

Thanks for sharing that, landplanner. Hilarious!

Angry Chef
Mar 3, 2016 - 1:25pm

I'VE GOT IT !!!!


I was pondering Canada selling it's last oz of Gold and thought what kind of assets are they going to hold ?

Kathleen Wynne's used double headed dildo ? Justin Trudeau's elementary school drama class 101 reader notes ? Wayne Gretzky's old skates ? And then it hit me.

CARBON CREDITS is what they want to use as the new currency ! It's perfect. I've often asked myself why are we the only animals on this planet that have to pay to live here ? Because our owners have created a monetary system that controls us...right ? What better way to control us than force us to use " carbon credits " as the new currency ? Afterall, who doesn't want to " save the planet " ? And if you don't believe in " Global Warming ", too don't get to eat !

And it will be easier to cull the population. Voila ! A Globalists wet dream !!!!


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