Turd Makes A Move

Tue, Jun 21, 2011 - 1:05pm

The action in gold has proven to be too much for me to take.

I had a massage appointment this morning. I was supposed to relax. Instead, I found my mind drifting back to Greece, the PIIGS, the euro and the impact on gold. The more I thought about it, the more I was convinced that any eventuality in Greece is gold-positive. When the massage ended, I raced to my car to check the gold price and found that it had once again been thwarted by the EE, at a price just below 1550.

Driving home, I started thinking about the importance and relevance of 1550 to the Fed. Beyond there lies the alltime closing high of 1558.40. Gold making new alltime highs makes additional QE that much more difficult to announce. Let me stress this: Gold at alltime highs does not preclude or make impossible more QE, it simply makes it more challenging from a MOPE standpoint. Remember and never forget that, through the bullion banks, the Federal Reserve manages the perception of future inflation. Keeping the price of gold in check and its upside controlled is one of the tools the allows the Fed to fool investors into believing that inflation is low and, therefore, interest rates can remain low...and... interest rates must remain low for the funding of our entire national debt-deficit-ponzi. That said, the Fed has no choice. QE will continue regardless of whether or not gold is above 1550. Therefore, though that level is being fought, the EE doesn't necessarily have to win.

Take a look at this daily chart. This is what ultimately pushed me over the edge and back into gold a few minutes ago.

I am now the proud owner of some August 1550 calls as well as a spread of the December 1600s vs the December 1700s.

Lastly, you're probably asking yourself, "how does this jibe with Turd's expectation of summer doldrums"? Frankly, it doesn't but I'll try to square it this way:

1) I could be wrong about the doldrums. Turk and Santa are a lot smarter than I am.

2) I still do not expect a big silver rally until inflation expectations heat up again with the appearance of QE3. Therefore, other than the soon-to-be-worthless July $40 calls I own, I am not buying silver...at least for now. So, gold good, silver dull.

With 25 minutes to go, gold is at 1545.20 and thinking about making one more run at 1550 before the close. I would absolutely love to see it close the pit session at about 1548. That way, the Asians and Indians could take a stab at 1550 while the Monkeys sleep. We'll see. More later after the Greek vote. TF

About the Author

turd [at] tfmetalsreport [dot] com ()


Jun 21, 2011 - 1:13pm

Thanks Turd! Hope the massage

Thanks Turd! Hope the massage was good! I think we can breach 1550 in overnight trading!

Captain Silver
Jun 21, 2011 - 1:13pm



Too brave for me my man. But good luck!

Jun 21, 2011 - 1:20pm


okay, third is not bad. I hold both gold and silver.

just another perl hacker
Jun 21, 2011 - 1:22pm


who leaves a massage before the happy ending?

Jun 21, 2011 - 1:22pm

Silver Timing

I like the looks of gold too. Picked up some last Wednesday. I have been ready to hop back in to silver for two months now, but I am having a difficult time getting the timing right. It's hard to imagine a gold rally without at least some positive silver movement, so I'm wondering if now might be the time for silver too. 33 would look a lot better, but there may not be a bottom from here.

Eric Original
Jun 21, 2011 - 1:23pm

One more point of reference:

One more point of reference: record high london fix is 1549.00

Jun 21, 2011 - 1:26pm
Jun 21, 2011 - 1:29pm

Turd Twice Right

Actually Turd could be right on both counts: a new nominal high above $1560, new money coming in with the breakout, big money selling out to the new buyers, then the rollover into the summer downtrend. Could that make sense?

Jun 21, 2011 - 1:33pm

Massage Envy?

Is Turd a card carrying member?

Just an FYI - Clive Maund and Stewart Thomson both came out with articles today and they both feel an explosion in the gold price is imminent. Maund thinks the broader markets, including gold, will move to the upside soon whereas Thomson more specifically discusses a big move by gold.

I personally think the basing activity and support we've seen recently portends for a strong move up. It appears there's limited downside from here given that however the Greece scenario plays out, as Turd states, it's good for gold.

Eric Original
Jun 21, 2011 - 1:33pm

Silver Tree

Cool. Very Cool.

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