Physical Demand and Fear

Tue, Nov 1, 2016 - 10:47am

These two factors are clearly in play today as the metals move higher in a surge we've been expecting since late last week. However, these gains might just as quickly be reversed so there are a few indicators you'd better be watching.

As mentioned in the title of this post, both physical demand and fear seem to be driving price today. How can we measure physical demand? Sometimes it shows up as a lack of overnight "London Monkey" trading. As prices were firming last week, we noticed this phenomena occurring again: And now look at the action overnight (earlier today) in London:

Don't ask me to quantify this because I can't. This is pure conjecture based upon learned experience. As I've followed this stuff daily for nearly seven years now, I've noticed a clear correlation between London demand and the London Monkey daily price smash. And this clearly correlates with price trend. So, when The London Monkeys stand they have more than half the time the past two weeks...this tells me that demand for physical is strong on London and, consequently, you can expect price to rise in New York, too.

Also affecting things today is fear. This is the fear that Donald Trump is going to be the next president of The United States...I guess. Why this is such a "fear", I don't know. Perhaps, instead, a better word is "uncertainty". The gold price is anticipating the uncertainty that a Trump victory would bring. Either way, when you get a 14-point turnaround in a major national poll just one week before the election, the effect is rather startling.

And it's not just the metals. We've been tracking the impending breakout and surge in Bitcoin, too, and it's up 3% today and back through $700. Since the previous breakouts on this weekly chart added 40% or so to the Bitcoin price, I'd say your next target is likely near $1000.

Turning to the metals...Just yesterday, we discussed the likelihood of a surge higher. Prices had found support at/near the respective 200-day MAs and, with copper surging higher, we thought that a move like we're seeing today was coming.

And while this is all very nice, well and good, we really haven't accomplished anything significant until prices move back above the 50-day moving averages. Yes, silver never closed below its 200-day and gold is now more than 1% back above its own 200-day...BUT...if you want to reverse the recent downtrend and get the hot, momo-chasing Spec HFT algo money to come charging back into the synthetic paper gold derivative, then you need this move to extend up, to and through the 50-day.

For the sake of clarity, the charts below show nothing but the location of the 50-day MA for both the Dec16 gold and Dec16 silver. THESE ARE THE KEY LEVELS TO WATCH. A move through and close above these levels should excite the algos and drive price even higher. So, watch them both very closely and be sure to note the sharp down angle of both, too. This makes the pressure to jump to and through even greater.

Two other key indicators we're going to be sure to keep watching are copper and the HUI. Copper is up another 1% as I type. This is the 7th consecutive up day and I have a last of $2.222. The HUI is also higher but not as much as you might hope/expect. I've got it at 218 and up about 5.5 points. What should you be watching? Let's get copper to continue higher and move up and out of this pennant AND let's get the HUI back above 220. Both of these would help spur the metals even higher, too.

There's a lot more going on but I think I'll stop here so that we can get this posted for everyone. I'll try to add more info in the comments section.


About the Author

turd [at] tfmetalsreport [dot] com ()


Nov 1, 2016 - 10:49am


My #1

Nov 1, 2016 - 10:50am


For the Silver

Nov 1, 2016 - 11:01am

BTC AG AU go team!

ok Marchas, now post your message!

Comex is gaining on SGE - reduced arbitrage advantage, from around $0.80 -0.90 last week to around $0.50-0.60 today

Nov 1, 2016 - 11:01am

This news must be good for

This news must be good for Gold and Silver!

Breaking – Hillary Just Got Politically Assassinated: Wikileaks Just Released Her Full Isis Donor List With Names!

Makes me think of the Lucky TV parody and that prison is not far away for Hillary.

Hilarious! Genius! Hillary Clinton arrested? Watch her kicking and screaming! LuckyTV

Keep Stacking!

Nov 1, 2016 - 11:01am


.loving the price action.

Nov 1, 2016 - 11:03am


It Was A Matter Of Time. The PM's Are Heading Up and Hitlery is Heading Down.Keep Stacking

Nov 1, 2016 - 11:04am


...years hard time for Hillary

Nov 1, 2016 - 11:08am

Channeling Clif?

Bitcoin price, I'd say your next target is likely near $1000.

I do think he would ge a great guest for A2A.


Nov 1, 2016 - 11:12am

Is this THE HAMMER ---LOOKS LIKE IT!! ] Wikileaks – Hillary Clinton’s emails the world needs to read OCT 23 Posted by cairnsnews . Worse than Treason:

Nov 1, 2016 - 11:13am



Nov 1, 2016 - 11:19am


Hope so, but I just cashed out on my JNUG and UVXY, and feel good about that.

Nov 1, 2016 - 11:22am

I find the pessimism around this rally to be very bullish

Markets love to climb a wall of worry. Could we have a day soon where Silver is up over a dollar? I think so! HiHo Silver... Away!!!

GLTA - Yukon

Nov 1, 2016 - 11:29am


One thing that has received virtually no press is the one belt / one road initiative. Imagine infrastructure being developed in Eurasia over the next 20 years akin to the infrastructure development in China over the past 20!,_One_Road

(you'll have to copy and paste that entire URL to get to the right page )

Donate to wikipedia!

Nov 1, 2016 - 11:30am

Kiddie porn tied to Hillary warrant


Nov 1, 2016 - 11:31am

S&P 2120

Someone had asked about this in the podcast thread.

Yes, S&P 2120 is a level that we have watched very closely for nearly two years now. As resistance, it finally gave way during this current rally but now it is barely holding on as support. Watch VERY closely.

Nov 1, 2016 - 11:32am

Are we seeing the begining of Global Growth?

China printed October PMI at 51.2 (exp. 50.4). Flat in Sept.

India's October CPI was 54.4 from 52 in Sept.

Early signs of inflation rising.

Bond yield rising.

Global Growth I mean ...Asian Growth.

lund175 canary
Nov 1, 2016 - 11:55am

Global growth by means of fiat expansion?

The only growth is most likely by the multiple of fiat expansion.

Nov 1, 2016 - 11:57am

More from Reuters on that pipeline explosion

Looks to be out of service for at least a week. If you live in SE US, be aware.

Nov 1, 2016 - 12:04pm

Amazing. Just like yesterday.

With all that's going on in the world...Since the Comex open, barely a $4 range in the "gold price"...and it would only be $2 if not for the $4 hammer at the London PX fix of 9:00 CT

Nov 1, 2016 - 12:09pm

Re: S&P 2120

Okay, 2120 broken and unsuccessfully retested, so bought back into UVXY with tight stop loss. Whew, what a day!

Nov 1, 2016 - 12:14pm


Good to see you around. I don't recall you being bullish very often in the past--and you have usually been right.

Infometron, I cashed out of JNUG a few minutes ago also with a small profit. Might get back in if we see a profit-taking dip before today's end. AU seems to be capped at 1290ish...

Nov 1, 2016 - 12:19pm

@Dr J

With revelations coming in fast and furious, there is no telling where this will go one moment to the next. I'm leaning toward UVXY now, as I wonder if there is a big sell off in stocks, that maybe JDST might be the ticket to help hedge my mining stocks.

I can see Au going up with the mining stocks going down, at least in the short term.

JNUG scares the shite out of me, so I'm always happy to cash out with a profit.

I'm waiting for the bwanksters to evoke another V recovery in the S&P.

Hence my tight stop loss on UVXY.

Nov 1, 2016 - 12:30pm

HUI back above 220 and well above the 200-day MA


IF IT DOES, it will be VERY interesting to see if some momo money comes rushing back into the shares.

Nov 1, 2016 - 12:30pm

Lying propagandist government, as shown linked by Denver Dave...

"The attack on Iraq, the attack on Libya, the attack on Syria happened because the leader in each of these countries was not a puppet of the West. The human rights record of a Saddam or a Gaddafi was irrelevant. They did not obey orders and surrender control of their country.

The same fate awaited Slobodan Milosevic once he had refused to sign an “agreement” that demanded the occupation of Serbia and its conversion to a market economy. His people were bombed, and he was prosecuted in The Hague. Independence of this kind is intolerable.

As WikLeaks has revealed, it was only when the Syrian leader Bashar al-Assad in 2009 rejected an oil pipeline, running through his country from Qatar to Europe, that he was attacked.

From that moment, the CIA planned to destroy the government of Syria with jihadist fanatics – the same fanatics currently holding the people of Mosul and eastern Aleppo hostage.

Why is this not news? The former British Foreign Office official Carne Ross, who was responsible for operating sanctions against Iraq, told me: “We would feed journalists factoids of sanitised intelligence, or we would freeze them out. That is how it worked.”

Nov 1, 2016 - 12:32pm

silver has hit

all important $18.50

Go hecla!!!

Nov 1, 2016 - 12:39pm

Nov 1, 2016 - 12:40pm

Adding to the brew

The USDJPY is falling sharply today. Might it fall back below 104? If so, expect gold to surge toward $1300.

Nov 1, 2016 - 12:42pm
Nov 1, 2016 - 12:42pm

@Turd Re: Mo' momo!

That's what I want to see!!

Looks like the world is going 'risk off' between now and the election...

Any speculations as to what the central bwanksters are thinking right now?

Nov 1, 2016 - 12:45pm

That's an interesting question...

We still need to get through tomorrow's Fedlines. I'd say there's about a 25% chance that Mother hikes just to show that she's "not politically motivated".

But...IF there's no hike tomorrow...and IF the BLSBS is soft...and IF Trump wins...and IF the stock market heads south...THEN there's a very real possibility that there will be NO rate hike in December, either.


Donate Shop

Get Your Subscriber Benefits

Exclusive discount for silver purchases, and a private iTunes feed for TF Metals Report podcasts!

Key Economic Events Week of 4/22

4/22 10:00 ET Existing Home Sales
4/23 10:00 ET New Home Sales
4/25 8:30 ET Durable Goods
4/26 8:30 ET Q1 GDP first guess

Key Economic Events Week of 4/15

4/16 9:15 ET Cap Util and Ind Prod
4/17 8:30 ET Trade Deficit (Feb)
4/17 10:00 ET Wholesale Inventories
4/18 8:30 ET Retail Sales (March)
4/18 8:30 ET Philly Fed
4/18 10:00 ET Business Inventories (Feb)
4/19 8:30 ET Housing Starts and Building Permits

Key Economic Events Week of 4/1

4/1 8:30 ET Retail Sales (Feb)
4/1 9:45 ET Markit & ISM Manu PMIs
4/1 10:00 ET Construction Spending (Feb)
4/1 10:00 ET Business Inventories (Jan)
4/2 8:30 ET Durable Goods (Feb)
4/3 9:45 ET Markit & ISM Services PMIs
4/5 8:30 ET BLSBS

Recent Comments

by lakedweller2, 3 min 38 sec ago
by AngryCitizen, 1 hour 26 min ago
by mgilbert, 2 hours 15 min ago
by Marchas45, 2 hours 29 min ago