Christmas in July

307
Fri, Jul 29, 2016 - 9:47am

Well, we've spent the last two weeks making some bold predictions about the price of gold, the Bank of Japan and interest rates. Now here we are at the end of the month and things have unfolded almost precisely as we'd hoped. Won't it be fun to see what gifts August brings?

Time is short this morning such just a recap...

The BoJ did, indeed, "disappoint" overnight in the classic buy-the-rumor-sell-the-news style that we expected. The only oddity of it all was the almost NON-reaction in every other market. While the USDJPY fell over two points, S&P futures hardly budged, interest rates actually rose and the metals fell. HUH??

But all of that changed when the Q2 GDP numbers were announced earlier today and the "growth" shown was enough to even make Mr. Donut blush. Once again, all of the 8-figure WallSt dbs were off by an order of magnitude after predicting +2.4-2.6% and seeing the actual number come in at just a paltry +1.2%. The final level for Q1 was also cut back to just +0.8%. SOME ROBUST ECONOMY!

This finally sparked the metals as there is now hardly anyone left on Planet Earth who thinks that The Fed will raise rates again in 2016. All of this sets the stage for a return of Spec money and open interest to gold in August and, just as we've been forecasting, new 2016 highs.

And ponder this numbers as you go through the day...How many worthless blog posts and articles did you read in July that detailed how "the metals were overbought", "topping", "due for a pullback" and "ready to make new lows"? While 3-5% drops are never fun (yet part of the process), how about some month-end perspective:

Gold June 30: $1327 Gold now: $1351 Total change: +$24 or +1.8%

Silver June 30: $18.62 Silver now: $20.29 Total change: +$1.67 or +8.9%

Hmmm. Boy, that sucks. Just brutal. Those damn metals and all the charlatans that pump them. Gimme a break...

For the rest of the day, there's no sense in getting too worked up over the tick-by-tick stuff. Just let the day play out. The week will end and, more importantly, the month will end with green candles across the board and all of this sets us up for what should/will be a very interesting month of August. We've got another BLSBS next Friday and then that's about it. No FOMC till September. The BoJ is now done for a while. All that's left should be random datapoints and announcements that only serve to enforce the current environment of even lower rates and NIRP, strong metal demand and higher prices.

If you want something to pull for, keep an eye on gold. A monthly close north of $1350 would be nice. Perhaps more important is the Long Bond where a green candle and a monthly close above 173 would be cool. It closed June at 172-11.

Lastly, here are two bits of audio you might enjoy:

Have a great day!

TF

About the Author

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turd [at] tfmetalsreport [dot] com ()

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tyberious
Aug 1, 2016 - 8:08pm

20 Tonnes Of Gold So

20 Tonnes Of Gold So Far

Today is the Shadow of Truth’s 100th show. We cover our favorite topics: Ponzi scheme U.S.A., gold market manipulation and the fraud underlying the stock market. In addition, we discuss a development that Rory has uncovered concerning the IMF’s SDR and the gradual removal of the dollar as the world’s reserve currency. You read Rory’s analysis here: Global De-Dollarization and here: SDR vs the Dollar. In the meantime, we hope you enjoy this “anniversary” episode of the Shadow of Truth:

https://investmentresearchdynamics.com/20-tonnes-of-gold-so-far/

infometron
Aug 1, 2016 - 4:56pm

Too confident?

I was feeling too confident, and that was making me feel a wee bit uncomfortable being 'all in', so I just took 20% of my mining portfolio off the table prior to the close by selling some JNUG and SILJ, at a nice little profit, definitely enough to safely remain a life long member of Turdistan! Feel much better now...

Why? Because of this:

Whereby the current tension between the record longs and shorts reminds me of this:

Heat Shootout Scene [High Quality]

Who knows how it will turn out (short term), but it sure feels pretty violent.

Medium to long term, of course, there ain't no doubt... the bad guys lose!

In the meantime, it seems prudent to duck, at least just a little!

AvgAmericanAlexP23
Aug 1, 2016 - 12:51pm

Ed Steer

Feel the same way, and is why I am a subscriber of Ed's site. From what I understand Stansberry kicked Ed to the curb when they acquired Casey newsletter assets. Ed does great work.

ChaCha Mars
Aug 1, 2016 - 11:03am

Thank you, ChaCha

Looking at the date...I'm not sure if that's anything new. However, SGE has always been touted as physical-only so the "facilitate development of China's derivative market" is interesting.

I'll see if I can send it to Andy for his opinion.

Thanks for the links!

donnojackshit
Aug 1, 2016 - 11:02am

Nucking Futs - skydiving into net

I did my first jump in 1983, and amassed over 15000 jumps to date, and there is no fucking way I'd jump without gear. I have lost 40 plus friends jumping over the years, and seen a few bounces, and not sure what those spectators were hoping to see if he had missed the net! I must be getting old! Some humans are astounding. My wife often says I don't seem to have any skydiving heroes, and she is correct, but this guy is now someone I admire. I admire the soccer legend Messi, and a host of motorbike TT riders too. Simply amazing!

AGAU
Aug 1, 2016 - 10:41am

from Zero hedge "Twitter is

from Zero hedge

"Twitter is provably censoring Donald Trump in order to prevent him raising money for his presidential campaign."

"A Twitter insider admitted to Breitbart back in February that Twitter had indeed begun shadow banning politically incorrect users, a claim verified by a senior editor at a major digital publisher"

I hope Trump is taking names here !

I am even more convinced now that Twitter face book Google etc were only allowed to grow to ridiculous valuations etc as long as they toe the line and follow their handlers instructions and promote their propaganda. Same for the cowardly "journalists" and mouth pieces of the MSM

They would be wise to remember, that in politics, --- revenge is swift and sweet !!!

AlexP23hindsight101
Aug 1, 2016 - 10:35am

@hindsight101 - Ed Steer

Actually, I believe Doug Casey kicked Ed to the curb along with many other highly respected people when he sold out to some other company (sorry forgot the exact details), so I think Ed had no choice but to set up his own paid site in order to carry on his great work. I feel very aggrieved by the terrible way that Ed was treated in this regard, so out of principal signed up for his paid site to offer him my ongoing support.

Dirt_Reynolds
Aug 1, 2016 - 9:55am

All these tropical locations.

If I moved south, I would consider Wyoming.

Visit the FAQ page to learn how to track your last read comment, add images, embed videos, tweets, and animated gifs, and more.

FireMedic76
Aug 1, 2016 - 9:52am

AG AUG 19 2016 18.00 C

Turd,

You made a great "call" on this position!

THANK YOU!

silver10sguy
Aug 1, 2016 - 9:11am

Price of Oil for Chiron

Chiron,

I am no expert but here are my thoughts on the price of oil. We all read so much and many sources give us insights. SRRocco has written extensively on the relationship to oil and its connection to metals, real wealth, paper assets, and the future challenges to the US economy.

Let's look at the EROI (Energy Return on Investment) first. A 100 years ago the energy from one barrel of oil would allow for 100 barrels of oil to be produced. This was the so called easy oil with the traditional drilling downward into the earth. By the 1970's the Energy Return on Investment was around 30 barrels produced from one barrel of oil. In the last decade it has fallen to around 5 barrels produced from one barrel of energy.

We all know about the fracking revolution in the last 10 - 15 years. Fracking is so expensive and the wells if I recall correctly lose over 50% of their production within a year or two. The oil companies have to spend millions more to drill a new well again.

It sure makes sense that around 2003 the price of oil started to go much higher. The energy return on investment is now so low and costs are so high for fracking that the relative stability of the price of oil was lost forever.

Steve St. Angelo from SRSrocco is frequently making the case that oil production in America will go into permanent decline now. Please note that the debts of the oil companies have been rising very fast over the last decade. There are already many bankruptcies and this will continue. The rise in oil company debt is very interesting as oil prices were above $100 a barrel till around late 2014 I think. Even with these high oil prices they can not make any money! Steve keeps saying that it was only easy money at zero interest rates that has allowed fracking at all. Now, however, the banks are losing money from loaning to the oil companies. Those loans are drying up and future production will go into permanent decline. Steve's articles show a topping in oil production around late 2014 or sometime in 2015 for oil companies within the USA.

We know the global markets and economies are in serious trouble. Now oil storage facilities are filling up, tankers full of oil are floating at sea, and oil demand is very weak. Steve paints a very big problem for America with no easy money for future fracking when the dollar tanks. We won't be able to import oil either as dollars and treasuries are not real stores of value.

I recall reading that decades ago America got about $3 of GDP growth for $1 of debt. Now we are getting about $3 of debt for $1 of GDP growth. I think Steve made the point any nation needs a viable energy source to allow growth at all without debt. Steve's website showed the recent earnings by some of the big oil companies in America. THEY are doing TERRIBLE though I forget the numbers.

Anyway, hope I made some sense and gave a credible view of Steve's thoughts. Good luck to you Chiron.

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Key Economic Events Week of 7/13

7/13 11:30 ET Goon Williams speech
7/13 1:00 ET Goon Kaplan speech
7/14 8:30 ET CPI for June
7/14 2:30 ET Goon Bullard speech
7/15 8:30 ET Empire State and Import Price Idx
7/15 9:15 ET Cap Ute and Ind Prod
7/16 8:30 ET Retail Sales and Philly Fed
7/16 11:00 ET Goon Williams again
7/17 8:30 ET Housing Starts and Permits

Key Economic Events Week of 7/6

7/6 9:45 ET Markit Service PMI
7/6 10:00 ET ISM Service PMI
7/7 10:00 ET Job openings
7/9 8:30 ET Initial jobless claims
7/9 10:00 ET Wholesale inventories
7/10 8:30 ET PPI for June

Key Economic Events Week of 6/29

6/30 9:00 ET Case-Shiller home prices
6/30 9:45 ET Chicago PMI
6/30 10:00 ET Consumer Confidence
6/30 12:30 ET CGP and SSHW to Capitol Hill
7/1 8:15 ET ADP Employment
7/1 9:45 ET Markit Manu PMI
7/1 10:00 ET ISM Manu PMI
7/1 2:00 ET June FOMC minutes
7/2 8:30 ET BLSBS
7/2 10:00 ET Factory Orders

Key Economic Events Week of 6/22

6/22 8:30 ET Chicago Fed
6/22 10:00 ET Existing home sales
6/23 9:45 ET Markit flash PMIs for June
6/23 10:00 ET New home sales
6/25 8:30 ET Q1 GDP final guess
6/25 8:30 ET Durable Goods
6/26 8:30 ET Pers Inc and Spending
6/26 8:30 ET Core inflation

Key Economic Events Week of 6/15

6/16 8:30 ET Retail Sales
6/16 8:30 ET Cap Ute and Ind Prod
6/16 10:00 ET Chief Goon Powell US Senate
6/16 4:00 pm ET Goon Chlamydia speech
6/17 8:30 ET Housing Starts
6/17 12:00 ET Chief Goon Powell US House
6/18 8:30 ET Initial Jobless Claims
6/18 8:30 ET Philly Fed
6/19 8:30 ET Current Account Deficit
6/19 1:00 pm ET CGP and Mester conference

Key Economic Events Week of 6/8

6/9 10:00 ET Job openings
6/9 10:00 ET Wholesale inventories
6/10 8:30 ET CPI for May
6/10 2:00 ET FOMC Fedlines
6/10 2:30 ET CGP presser
6/11 8:30 ET Initial jobless claims
6/11 8:30 ET PPI for May
6/12 8:30 ET Import price index
6/12 10:00 ET Consumer sentiment

Key Economic Events Week of 5/25

5/26 8:30 ET Chicago Fed
5/26 10:00 ET Consumer Confidence
5/27 2:00 ET Fed Beige Book
5/28 8:30 ET Q2 GDP 2nd guess
5/28 8:30 ET Durable Goods
5/29 8:30 ET Pers Inc and Cons Spend
5/29 8:30 ET Core Inflation
5/29 9:45 ET Chicago PMI

Key Economic Events Week of 5/18

5/18 2:00 ET Goon Bostic speech
5/19 8:30 ET Housing starts
5/19 10:00 ET CGP and Mnuchin US Senate
5/20 10:00 ET Goon Bullard speech
5/20 2:00 ET April FOMC minutes
5/21 8:30 ET Philly Fed
5/21 9:45 ET Markit flash PMIs for May
5/21 10:00 ET Goon Williams speech
5/21 1:00 ET Goon Chlamydia speech
5/21 2:30 ET Chief Goon Powell speech

Key Economic Events Week of 5/11

5/11 12:00 ET Goon Bostic speech
5/11 12:30 ET Goon Evans speech
5/12 8:30 ET CPI
5/12 9:00 ET Goon Kashnkari speech
5/12 10:00 ET Goon Quarles speech
5/12 10:00 ET Goon Harker speech
5/12 5:00 ET Goon Mester speech
5/13 8:30 ET PPI
5/13 9:00 ET Chief Goon Powell speech
5/14 8:30 ET Initial jobless claims and import prices
5/14 1:00 ET Another Goon Kashnkari speech
5/14 6:00 ET Goon Kaplan speech
5/15 8:30 ET Retail Sales and Empire State index
5/15 9:15 ET Cap Ute and Ind Prod
5/15 10:00 ET Business Inventories

Key Economic Events Week of 5/4

5/4 10:00 ET Factory Orders
5/5 8:30 ET US Trade Deficit
5/5 9:45 ET Markit Service PMI
5/5 10:00 ET ISM Sevrice PMI
5/6 8:15 ET ADP jobs report
5/7 8:30 ET Productivity
5/8 8:30 ET BLSBS
5/8 10:00 ET Wholesale Inventories

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