One Day To Brexit Vote

89
Wed, Jun 22, 2016 - 10:53am

With the Brexit vote coming up tomorrow, today we should take a moment to consider what should happen with gold following the outcome.

The first thing you need to know is that this is NOT a done deal. The assumption since last Thursday is that Brexit will fail...and it likely will. The City of London almost always gets what The City of London wants. To think that the hoi polloi will be allowed to advance an agenda that is NOT in The City's interests is almost unfathomable, sort of like those believing that a new Glass-Steagall will be passed one day in the U.S.. The Financial-Political Complex overpowers everything through bribery, greed and corruption so to think that popular opinion would be allowed to override them?...Well, it's a longshot.

That said, the polls remain close and be sure to check this from ZH. As you know, ole Turd knows a little about bookmaking so, to me, this makes perfect sense. Essentially, the bookmaker simply desires equal amounts of money on each side of the wager. The amount of individual bets tells you something about the supposed "smart money" but it can be misleading. What this ZH post shows is that there is a huge amount of individual bets on Brexit but an equally huge amount of money...in much larger chunks...on Bremain. Now why would that be? Does the "smart money" know something that the "squares" do not? Or is someone attempting to influence opinion by placing big bets in order to drive the odds toward Bremain. This is an interesting question to consider in the remaining hours before the vote. https://www.zerohedge.com/news/2016-06-22/something-strange-emerges-when...

And here's yet another major English newspaper coming out with an endorsement of Brexit: https://www.dailymail.co.uk/debate/article-3653385/Lies-greedy-elites-di...

And don't forget who reads newspapers and which is the most likely demographic to turn out in large numbers...old(er) people. And which group is most likely to reject the EU in favor of British "patriotism"? Old(er) people. Just sayin'.

So, again, this is far from a done deal, regardless of The City's desires. Sit tight and be ready. Tomorrow will be fun!

To that end, let's now talk about gold and the impact of the vote on paper gold "prices". It will be easier to discuss this verbally and we'll attempt to do so in today's podcast which, God willing, I'll be able to post before 8:00 pm EDT.

Here's where ole Turd stands...and this is NOT because "Turd is just a permabull who always says BTFD". Everything and every scenario says gold is going to rally, NOT plummet. Why? Let's list a few of the reasons:

  1. How much "Brexit risk premium" was pumped into gold in the first place? Gold was $1213 and down nearly $100 from its highs before the June BLSBS put an end to the Fed Goon Jawboning Parade. After the BLSBS, it closed June 3 at $1243. It then rallied over the next two weeks, anticipating a dovish FOMC and was $1284 when the Fedlines were released one week ago today. How much of that rally was FOMC-related and how much was Brexit-related? Maybe 80/20? Maybe. In fact, Brexit really only entered as a legitimate possibility early last week. So, considering that gold is now $50 off its peak last Thursday, I think the "Brexit risk premium" is already done, gone and out.
  2. So this actually puts gold DOWN $16 or 1.3% since the extremely dovish and dissentless Fedlines of last week! What? That's crazy!! All this does is once again prove the old adage that, if you want to make money trading the metals, you must always "sell some when everything looks great and buy some when everything looks terrible".
  3. From an HFT-algo perspective, EITHER vote scenario should be gold bullish. Why? A Brexit vote will dump the euro but surge the yen. This would/could/might blow the USDJPY all the way to and through the 101 target we've been discussing. Bond futures will soar worldwide, too, as "investors seek the safe haven of fixed income". These two combined should drive heavy HFT gold futures buying. But what about Bremain? If this occurs, the Euro will rally...at least it should. And the euro is about 60% of the POSX. A 2-3 point rally in the Euro would drive the POSX back toward 92. After an initial shock, the HFTs and smart human money managers everywhere will begin to focus upon the tumbling Pig and Fed dovishness...as they should have been doing every day since last Wednesday...and you'll get a quick bounce and recovery from any selling.
  4. And, in the end, simply look at price and history.

"What does that mean Turd? Please elaborate on point #4." OK, I'll be glad to.

Recall what happened in May. Gold surged toward the critical $1308 point? What did The Cartel Banks do? They desperately capped and capped and then brazenly used all of the Fed Goon jawboning as an excuse to ram prices back down and, MOST IMPORTANTLY, cover over 100,000 naked shorts BEFORE The Fed actually announced that they were powerless and neutered. So, as price rallied on the actual news of June 3 and June 15, The Banks were able to control price and keep it below $1308 by issuing back out the same old paper that they had issued in April. So, what has the past 4 days been about? It's the exact same trick/strategy!

The Cartel Banks have used the Bremain sentiment since the Cox assassination as cover to raid price, drive Specs back out and cover shorts. That way, when price begins to rally again regardless of the outcome, they'll have shorts to issue as they attempt again to keep price below $1308. See how that works? Just yesterday, we saw an overt raid of $20 and an open interest decline of nearly 10,000 contracts...back to 571,000. With prices down a little again today, who knows how many more nervous-nelly Specs are heading to the exits ahead of the vote.

The point is...Just as in May, The Banks KNOW what is going to happen next. The paper price of gold is going to rally in the days and weeks to come, regardless of the outcome of tomorrow's vote. Therefore, just as in May, they are desperately using any and every opportunity to scare out some Specs and cover some shorts. Got it? See what I mean? Again, we'll try to make some sense of all this in today's podcast.

For now, gold is down $5 as I type and, earlier today, came very close to tapping its 50-day MA and the lower band of our channel...which we've been mentioning as a likelihood since Sunday evening. What's my strategy? Sit back, relax and watch the fireworks. If I can remember tonight, I think I'll even order another shiny ounce of gold from JMB or GoldenEagle. I mean, why not? Get it while you can! Again, I absolutely expect the 50-day to hold and that the hand-crafted/painted double top on the chart to fail. My target next remains $1340.

And one more thing...As the world moves on from "All Brexit, All The Time", I though that this little tweet was interesting:

Have a great day but be sure to check back much later for a full podcast.

TF

About the Author

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turd [at] tfmetalsreport [dot] com ()

  89 Comments

JQuest
Jun 22, 2016 - 11:39am

Gold Lower Despite “Panic” Due To “Supply Issues”

"Informed, senior sources at the highest level of the gold bullion industry have told us that there is “panic” in the inter bank or institutional gold market."

https://www.goldcore.com/us/gold-blog/gold-lower-despite-panic-due-to-su...

JQ

Danforth Coxwell
Jun 22, 2016 - 11:51am

Craig….

this is perhaps your best post ever. Please make it public!

JQuestBlythesshrink
Jun 22, 2016 - 11:54am

Re: "The Cartel Banks have used"

As far as Brexit or Bremain who cares the EU is doomed and so is Briton.

I Believe at some point the pension funds are going to have to start getting into the PM's because of very low bond and equity returns.

JQ

Jun 22, 2016 - 11:59am

Binary Outcomes = Elites ALWAYS Win

Historical facts demonstrate the outcome of Brexit.

For example, a recent US Supreme Court case about Obamacare was widely discussed by pundits, constantly, for years, and the decision was monumentally important. At stake were the very underpinnings of the first black President of the USA. His ability to be the leader hinged upon Obamacare being held constitutional, that is, that the government had the constitutional authority to force individuals to actually engage in commerce by buying medical insurance through a government-mandated scheme. In contrast, the elites and their like-minded minions (socialists, statists, collectivists and the rest of the free shit army) naturally agreed that his majesty, Obummer, had plenty of authority to issue health care edicts, even to those subjects who did not wish to buy health insurance. The battle was thus ideological.

Of course, all of us tin-foil wearing conspiracy theorists rightly expressed outrage that there was even a debate at all, because all power rests in the people except for expressly enumerated, limited power given to the government. There was no such power given to the federal government that actually allows for the federal government to force individuals to engage in commerce, so the commerce clause basis for authority was ridiculous.

The debate raged over whether the commerce clause could be interpreted to stretch far enough to allow for the government to force individuals to buy health insurance. I could not imagine a conservative court, such as Rehnquist, would ever hold Obamacare constitutional. However, in this modern era, after Bork was run out on ideological grounds, the political era that was ushered in with such confirmation hearings like for Justice Thomas, well, all bets were off.

On its face, the law exceeded constitutional power granted to the federal government. On its face, to survive, the court had to stretch the law, contort it, and make a new exception. This concept is not new at all, as the jurisprudence on the 2nd and 4th Amendments makes clear. So, the pundits all argued at the margins, about whether Justice Roberts would extend the commerce clause by exception, or issue a beat down to Obummer.

When the decision came down, I remember it distinctly. Yes, the Justice Roberts DID draw the limits to the use of the commerce clause, finally, and for me, that was a relief. If Roberts had made an exception, then the commerce clause could have been used to allow ANY federal government action, on the flimsy logic that any activity arguably affects interstate commerce, and with the Obamacare ruling, the federal government could now force individuals to actually engage in commerce. So, I was partly relieved.

But, as we all know now, Justice Roberts, in a cowardly, weak, bureaucratic maneuver so easily predictable, upheld Obamacare as a TAX. So, no, it was not a government mandate to engage in commerce, it was merely a tax. Nevermind that the bill did not originate in the house, as the constitution requires. But, for Roberts, his dedication to the institution of government, and the dusty volumes of past court decisions, he decided to uphold bureaucracy, not the constitution. He demonstrated his allegiance to statism, over the constitution.

Was Roberts compromised and forced to uphold the law? Did he succumb to pressure from his academic contemporaries? Was he deep down just a statist masquerading as a middle-of-the-road conservative? Who knows.

What IS apparent, readily so, is that the state, in its current form, propped up and enabled by FIAT money conjured up from thin air, is large and in charge, and nothing else matters.

So, is Brexit really something that the elites are going to allow? Really?

Cui Bono?

If we could actually see all the players, their positions, their anticipated gains from Brexit or Bremain, then we could easily predict the outcome.

As it stands now, we operate on assumptions, based on polls, and sentiment, and perception management. None of this is real, or matters. What matters is who counts the vote.

Brexit fails, if the elites want it to fail.

Simply that.

Place your bets accordingly.

Marchas45
Jun 22, 2016 - 12:08pm
Island Teal
Jun 22, 2016 - 12:17pm

MrsF car is ????

just curious.......

Marchas45
Jun 22, 2016 - 12:20pm

Yea! But What If

The Elites want the UK to exit, what then? Who will they place the blame on when the system collapses, not the Elite,NO but the UK. That will be their scapegoat for all the crap they caused. Mmmmmmmmmm By the way, Keep Stacking

Louie
Jun 22, 2016 - 12:20pm

Brexit fails, gold will be slammed

We will know by Friday, but I take an opposite opinion from our fearless leader.

I think when the Brexit fails, stocks and bonds will rally, and all the people who have been buying gold as a safety hedge will then feel free to dump it.

If I was a gambling man, I would position long stocks, short metals, and short VIX.

Of course my thinking might lose you some serious money, but I think there will be bargains in the metals come Thursday night/Friday.

BTW- California Lawyer is right- What the elites want, they will get.

Jun 22, 2016 - 12:27pm

@Louie

I agree as well with your precious metals sentiment.

In fact, I have kept dry powder for two months, anticipating the Bremain. I will be making a substantial purchase on Friday, from my source, so as to dollar-cost average in at a lower number than the past two months.

Maybe I am wrong?

I vote with purchases, and I am holding fast until the vote is tabulated.

Serious bargains, indeed.

bently
Jun 22, 2016 - 12:42pm

Brexit

After falling for days, prediction markets suddenly popped up to 30 cents for Leave.

Boris Johnson is a rock star -- his closing remarks yesterday may well have turned the tide.

If someone can put them up, Turdites would love to see. Can't from where I am...thanks

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