Friday Fun

Fri, Aug 19, 2011 - 10:25am

Looks like closing above $1818 was as significant as I suggested it would be but I doubt you're here for a history lesson. You're likely looking for insight as to where we go from here. As you might expect, I have a few thoughts. Let's get started.

I was telling Mr Hyde late last night that I didn't think Santa's next "angel" was going to offer much resistance. Anymore, the levels aren't that far apart on a percentage basis and there seems to be some history that shows every other level to be challenging. With $1849 behind us (Dec gold hit 1881 earlier today), let's wait for the next one, instead. Given that I'm expecting a short-term peak next week, probably somewhere between 1936 and 2000, the 1936 angel seems to be worthy of watching. Here's why:

Take a look at this first chart. It's a 4-hour gold. Note that the angles of ascent are steepening. This can only continue for a little while longer as, eventually, the trendline goes straight up and that's as far as it can go. It's not parabolic yet, however, and I don't expect a significant peak today...not ahead of what will be a very interesting weekend. Early next week, though, we could get our peak. It is critical to understand this, though: I'm only talking about a short-term peak, similar to nine days ago. If a dip develops, it will simply offer you an opportunity to buy. Just like last week's pullback stopped right on schedule at 1725, the next dip will do the same. IF I'm right, you'll have a choice to make:

1) Enforce some sell discipline on yourself to lock in some profits and look to buy the pullback.

2) Look the other way and wait for the market to rebound.

Reinforcing this opinion is the whole "orderly vs disorderly" idea I postulated last evening. The move from the lows of last week had been orderly and calm. This type of advance is sustainable. Last night into this morning has been disorderly, like early last week. Volatility extends markets into short-term overbought or oversold territory and this is where we are headed by early next week. You can see the onset of the disorderly action on this 15-minute chart.

In short, absent a margin hike or The Second Coming, I expect gold to be firm all day. There will be dips but dips will be bought. Ask yourself: Would you like to be long gold or out of gold over the weekend? Exactly. Using charts to predict headlines is challenging to say the least but these charts suggest to me that early next week will see another $50-100 advance in the price of gold. From there, maybe another 3-5% dip? We'll see. The key is to assess these eventualities so that, when they occur, you can act with discipline and not emotion.

Silver looks great, doesn't it? As background, I suggest you pause for a moment and read this from Trader Dan:

As Dan says, the first key closing level today is about 41.50. A close above there will draw the 10-day moving average through the 20-day. This is a bullish crossover and would portend higher prices next week. The next number to watch is 42.30, which is the intra-day high from earlier this month. A close above there today would be bring a response Monday that is similar to today's reaction to yesterday's close. All in all, my $44 by Labor Day pick is looking pretty solid right about now. It may even be a tad conservative. Watch today's close very closely. It will be your clue for next week.

Lastly, both silver and gold have moved into significant backwardation this morning. This is an extremely significant development and, if it continues, is indicative of very tight, short-term supplies. A few loyal Turdites questioned the significance of the "Venezuelan Decision" when I posted the news Wednesday evening. Let me set this straight. It is extremely significant. Why?

1) The Venezuelan gold is on deposit at the Bank of England.

2) The Bank of England supplies the gold for the GLD.

3) I believe the GLD to be an empty, fraudulent shell game of fractional bullion banking.

4) It has been speculated that there might be only 1 ounce of gold for every 100 ounces of paper gold.

5) The withdrawal of 8% of GLD's gold from the BoE would cause a massive supply squeeze.

6) This massive supply squeeze would reveal itself by backwardation in the gold market.

7) See the paragraph above.

8) IF I'm right and GLD is exposed as the scam I believe it to be....well, let's just say that gold is going a little bit higher from here.

9) Money flows out of GLD and back into the rightful place...the miners.

That's it for now. Equities are rallying and the PMs are falling as I type. This is not a surprise nor is it unexpected. The prices as of 10:20 a.m. are of no consequence. Let's see where we are at 1:30 and 4:00.


About the Author

turd [at] tfmetalsreport [dot] com ()


Dr Durden
Aug 19, 2011 - 3:25pm

Silver just about to break

Silver just about to break from it's long term trend channel.

Benflation speaks next week.

One more dippidy doo and then blast off-a-rooney?

Aug 19, 2011 - 3:26pm
Aug 19, 2011 - 3:27pm

Diamonds? Really???

"CNBS is now promoting diamonds over gold."

I will agree that diamonds have 1 advantage over gold. Say you need to smuggle your life savings through an airport? Keester a condom full of diamonds right through the metal detector!

Maybe that's the angle CNBS was thinking of?

TheGreatKD Dr Durden
Aug 19, 2011 - 3:29pm

You are correct sir !!!

I was on Liberty Safe's site today. They proudly display "Made in USA" all over their website and in their ads.

Take a wild friggen guess where the safe I was looking at is made.....


Fucking assholes.

I live in San Diego , CA been to the physical location a few times, your assessment of them is right on. Visit many dealers and i won't do business with them as I found them very pushy & rude. KD

Aug 19, 2011 - 3:29pm

oh yeah

Turd you really scared me with the mention of gold backwardation. Not that such an event is unprecedented, it is after all a real physical commodity subject to supply shortages, and Hugo may cause a little backwardation hopefully for a very short duration. Silver backwardation is great and is what drew me to futures in the very beginning, but as I've said before, backwardation in gold is a totally different animal that represents a total collapse in faith in world fiat currencies.

When gold backwardation happens and it is not a result of a physical supply hiccup, the market is essentially saying "I don't give a sh1+ how much money you offer me to wait or what currency you offer me payment in, I want my real physical gold and I want it now!"

When no amount of fiat paper is worth waiting to get your physical, that means the end is truly nigh. If gold backwardation ever lasts more then say, 48 hours I will take it as a sign to unwind all paper assets, close all my trading accounts and buy physical/tangible goods.

Not that we have reached that point yet, but Turd, you had me worried there for a sec!

Sorry if I sound panicky, I'm not, I just want to draw attention to the difference between backwardation in gold and silver.

Still LOVE that silver backwardation though!

Aug 19, 2011 - 3:30pm

What's Changed??? NOTHING.......

Just a couple of comments on the latest happenings. As you are aware, and, as we have discussed in the past, things have not gone well for the financial aspects of our country. The latest political theater of debt reduction should convince you that we really are not serious about doing Jack shit about getting our financial house in order. Even when faced with the S&P down grade, they did nothing. Consequently, when S&P finally made good and downgraded the USA, we got all kinds of indignation and gold skyrocketed to 1800.00 an ounce. Silver has been kind of laggard, however, know this, any divergence you are seeing at this point will be made up. As a matter of fact, on the pullback, I stacked some more silver in my personal account. I know the last time we spoke you were thinking about pulling the trigger on a purchase. If you had bought in the 33.00 To 35.00 range you are in the money. Even if you bought at 40.00, I do not think this is going to matter.

I got a call from my Lawyer buddy John yesterday as we are booking flights for our annual hunting trip to Wyoming. He says, you know Ron,…… I been watching gold and silver, and I am kind of kicking myself in the ass for not buying when you and I spoke about this last year. At the time I just said to him, John …..I don’t give a shit where the price is today because I will guarantee you,….. it will be worth more next year at this time. I told him to remember the two prices, 21.00 Silver and 1319.00 gold. (These were the prices on or around October 1st of 2010) I said, Remember these prices, write them down. I also said to him, I do not know what the future will bring but this much I do know, if the government continues to print money they do not have, this is the fricking trade of the century and furthermore, do not expect the MSM to confirm what I am saying. When the MSM (Lame Street Media) finally gets it, it will be too late as this thing will have run away and left you at the station wondering what the hell happened. You have to be comfortable going your own way……Making your own decision when most will not agree with you. Who cares if they agree with you.

Well……….he says I was going to buy but I thought it was topping….BLA… BLA.. BLA…..I think you get the point. The key words here were, I was going to Buy But didn’t.

So…Where are we? Well ……the US of A gets the down grade, and Bernanke comes out and states interest rates will be kept at 0% for the next two years. If you think this is going to be positive for anything or anyone you had best get a brain scan. While I take no delight in this, the fact is, all of this bullshit is going to light an even bigger fire under the metals. We are going to go much Higher…..and it’s not going to matter what you buy at today, as I think we will look back at the price and say …Wow this was kind of cheap…

Okay…… My advice is, sit up straight.... brush the crumbs off you lap and get ready. Things are going to get very interesting. If you got some time on your hands check out the Shannon Yachts (Shannon 43) and get your interior picked out. We going to be listening to BOB Marley as we sailing down to the Bahamas, we takin us a long overdue…… vacation at that point……..Just remember and ask yourself this question. What has Changed?

I think you know the answer…..NOT A FRICKING THING…If anything it’s getting worse.

Oh…and one last thing…I am hearing rumblings of a possible QE-3…. No…. that ain’t a dam boat, its more money printing. If they do this….It will be terrible for our country and for our economy. However it will be very good for our type of investment.

Hold the line and keep stacking the Shiny.

PS: Can you believe this doofus Dennis Gartman: What a great counter indicator. He bails on Gold just before the 1800.00 shot. Word to the wise When Dennis opens his mouth, do the exact opposite and you should be in good shape. The problem is, these clowns never seem to pay a price for being consistently wrong......


Aug 19, 2011 - 3:44pm

I hate to inconvenience you all...

I hate to inconvenience you all, but I have been told to shut down the internet!

Ameritrade is having some technical difficulties, and I got directed to a page telling me to contact technical support. So I called them and the nice lady acknowledged they were having problems, and gave me a couple things to try, one of them was "You have to completely shut down the internet and then start it back up, and try logging in again" !!

silver foil hat
Aug 19, 2011 - 3:46pm


{insert rocket launch here}

you get the idea

Tom L
Aug 19, 2011 - 3:49pm
silver foil hat SuperManny
Aug 19, 2011 - 3:50pm

@ SuperManny

I think you accidently misdialed SuperNANNY (i.e. Big Sis Janet) who, when realized you were a turdite, wanted you to get off the internet.

You know, that 'we don't want to stop the real terrorists, so we'll classify anyone against fiat and banksters "terrorists" ' Janet.

duckwomanloulou silver foil hat
Aug 19, 2011 - 3:51pm

FT header article

Nice quote:

“This is Alice in Wonderland territory. We have gone through the looking glass” :)

Looking Glass-Alice In Wonderland


Aug 19, 2011 - 3:55pm

Minor stocks, Tom L, Jasper Puddlemaker, ewc58, cpnscarlet

Guys I understand the diversification and the leverage angles.

But remember, when the banks blow up (and they will), they will shut the banks. And they will shut the markets too (see Egypt for an example of a closed stock market for months) . Your "paper" will be worth zip. The Great Reset changes all assets and debts to zero. But you can eat and burn paper, so it has some use.

It's your money. I just want you to be aware of the actual risk you are taking. Good luck to all.

Chicken Little
Aug 19, 2011 - 3:55pm


Look at that silver chart.

Up $2.04 on the day. Nice way to end the week.

Silver doing some catch-up. Go baby Go!

Aug 19, 2011 - 3:55pm
Aug 19, 2011 - 3:59pm

the ship is sinking

How about a little music since it is friday and all. Particularly relevant to todays discussion, but with a lighthearted twist to take the edge off hopefully;

Tom Waits "gods away on business" performed by the cookie monster

Cookie Monster - God's Away on Business


I'd sell your heart to the junkman baby
For a buck, for a buck
If you're looking for someone
To pull you out of that ditch
You're out of luck, you're out of luck

The ship is sinking
The ship is sinking
The ship is sinking
There's leak, there's leak,
In the boiler room
The poor, the lame, the blind
Who are the ones that we kept in charge?
Killers, thieves, and lawyers

God's away, God's away,
God's away on Business. Business.
God's away, God's away,
God's away on Business. Business.

Digging up the dead with
A shovel and a pick
It's a job, it's a job
Bloody moon rising with
A plague and a flood
Join the mob, join the mob
It's all over, it's all over, it's all over
There's a lick, there's a lick,
In the boiler room
The poor, the lame, the blind
Who are the ones that we kept in charge?
Killers, thieves, and lawyers
God's away, God's away, God's away
On Business. Business.
God's away, God's away,
On Business. Business.

[Instrumental Break]

Goddamn their's always such
A big temptation
To be good, To be good
Theres' always free cheddar in
A mousetrap, baby
It's a deal, it's a deal
God's away, God's away, God's away
On Business. Business.
God's away, God's away, God's away
On Business. Business.
I narrow my eyes like a coin slot baby,
Let her ring, let her ring
God's away, God's away,
God's away on Business.

Aug 19, 2011 - 4:00pm

If you ever wonder what is

If you ever wonder what is the relationship between banksters and credit rating agencies, look no further. This article by Michael Hudson says it all:

Quote: "The moral is that the ratings agencies’ criterion was simply what was best for the banks, not for the debtor economy issuing the bonds
. They were eager to upgrade Cleveland’s credit ratings for doing something injurious – first, borrowing from the banks rather than covering their budget by raising property and income taxes; and second, raising the cost of doing business by selling Muni Light. They threatened to downgrade the city for acting to protect its economic interest and trying to keep its cost of living and doing business low.

The tactics by banks and credit rating agencies have been successful most easily in cities and states that have fallen deeply into debt dependency. The aim is to carve up national assets, by doing to Washington what they sought to do in Cleveland and other cities over the past generation. Similar pressure is being exerted on the international level on Greece and other countries. Ratings agencies act as political “enforcers” to knee-cap economies that refrain from privatization sell-offs to solve debt problems recognized by the markets before the ratings agencies acknowledge the bad financial mode that they endorse for self-serving business reasons."

It confirms my own suspicion that S&P is just an attack dog for Wall Street banks.

Aug 19, 2011 - 4:01pm


Silver at $42.82. I really struggled with not taking paper profits

Aug 19, 2011 - 4:01pm

$44 Ag next top if Au holds present

Anyone agree with this, and after $44, major pullback if Au doesn't advance, and colossal fall if Au declines. . . . looking at StochRSI analysis of of Gold/Silver Ratio. . . .

Aug 19, 2011 - 4:02pm

More on Venezuela

it's symptomatic of the big picture and possibly the loud BANG that starts an avalanche.

"Chavez's Revenge", good for him. And us. Won't be needing the Immodium for this kind.

Perfect Storm Sees Gold & Silver Surge – Chavez Gold Action Leads to Backwardation, Short Squeeze and ‘Havoc’ Concerns

Ok, 4pm, market's closed. So let's see what PMs do on Globex

Tom L jlee2027
Aug 19, 2011 - 4:03pm


When the banks blow up I won't give a crap about the FRN's. I need them though in the meantime to keep THEM FROM TAKING MY HOME!

No job = some portion of my assets in paper to create cash flow = money in the fucking market.

What part of that do you not understand?!

Seriously, I get it. I got it 10 years ago and bought land, built a house, raise chickens and goats and a garden.

I get it. Please don't assume everyone on the board is a neophyte. Until the great reset there is a need for paper. Get over it. Or do you buy your bread and gas with silver?

Sometimes stacking the phyzz is the wrong thing to do.


AugmentedFourth rpalick
Aug 19, 2011 - 4:03pm

@rpalick (I'm on a boat!)

...and your advice to the unfortunate few of us who don't have the "time" to buy a yacht?

Tom L
Aug 19, 2011 - 4:05pm

I called $44 today in Silver

$42.78 and rising. They held it $0.20 for over 2 hours this afternoon... playing for time with OE happening in the miners. They got away with it. KCG mounted a good fight in the last hour to bust through, but it wasn't happening. My Sept 18's look good though, just not OMG good.


jlee2027 silverbleve
Aug 19, 2011 - 4:10pm

re: silverbleve oh yeah

but as I've said before, backwardation in gold is a totally different animal that represents a total collapse in faith in world fiat currencies.

I agree with you. We may be closer than we all think.

llaettner Tom L
Aug 19, 2011 - 4:10pm

why $44 today?

just curious. . .

Aug 19, 2011 - 4:13pm

Tom, what, that old Dave thing?

Posted it here on Tuesday :-)

I hope Dave writes a new one tonight- - should be a good! Been following him for about 3 years. Like Ranting Andy Hoffman, another longtime GATA ranch hand and a regular in Bill Murphy's daily Midas update on Le Metropole Cafe...

I'll post some of Murph's Friday wrap up later on

Dr G
Aug 19, 2011 - 4:15pm


We have a family-owned gun safe company, and have been making safes for 20+ years. Please see We have two plants in the US (one in Utah and one in Tennessee). Great quality and features. Not trying to advertise--this is my first time mentioning it of the site.

Aug 19, 2011 - 4:16pm

Taking Paper Profits

I had to take my paper profits today, closed out a bulk of the paper options, looking to reload on the slightest pullback. Enjoyed the PM ride this week, keep em coming! any thoughts on profit taking early in the week Turd or off to the races on sunday and into Monday?

I Am The Unknown Comic lostinspace
Aug 19, 2011 - 4:18pm

Calling You Out

@Hugh G Reaction - I think things have changed quite a bit since WW2.

Gold does not set off metal detectors because of its malleability. In other words, if you tried to make some kind of bomb with a gold casing, all that would happen is that your gold would crack open and the perpetrator would be arrested with no damage done to anybody. This is very, very far shy of any kind of "explosion."

Let us presume that one's average wealth is 500 k. at 1850/oz that equates to a whopping 270 oz or about 16.8 pounds.

Given the fact that diamonds are not at all easily traded and have bigtime fees, and that De Beers has completely monopolized the supply and thus the price, and I would have to say I would much rather carry around 17 pounds of gold (in smaller denominations of course) versus a hundred (or so) 1 ct. diamonds. Because the diamond market is completely controlled, I don't see diamonds advancing versus gold anytime soon and probably not in my lifetime.

Maybe when central banksters and sovereign nations start hoarding diamonds then I could possibly change my mind? Or, maybe not.

As far as I know, most diamonds today exist either in jewelry, in the ground, or in a big ass vault in Holland. Please correct me if I'm wrong.

Oh, and did I mention that humans can create diamonds but can not create gold? Diamonds are simply 4 carbon atoms, and carbon is quite abundant - in fact it is even more abundant than paper fiat.

The bottom line is that these assholes at CNBS are desperately trying to get retail to buy anything except for gold....anything....even (gasp!) silver.

Dr Durden
Aug 19, 2011 - 4:19pm


If they offer free commission trades for the rest of my life, then I'll contact Al Gore and see what he can do about resetting the internet.

Been trying all day and was just able to login. Oh, and look, moar fiat! Yay!

Aug 19, 2011 - 4:19pm

Today was a good day, but I

Today was a good day, but I think next week will be even better.


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