Friday Gold Theatrics

Fri, Apr 12, 2013 - 10:52am

A concerted effort was made this morning to smash gold through the bottom of its 18-month range. It failed. However, you can be certain that they will try again so you need to keep a few things in perspective.

First of all, perhaps you need a reminder that we've been discussing this possibility for weeks. If you missed any of these posts, perhaps today would be a good day to go back and review them.

So, at 5:00 a.m. EDT this morning, the attack commenced. The plan was to drive prices down enough in the pre-market that, when the Comex opened at 8:20 a.m. enough sell-stops would be triggered that would break gold down through $1525 and then the thing would take on a life of its own. Below $1525 undoubtedly lay a veritable cornucopia of sellstops that, if/when triggered, will send price momentarily plunging. Earlier today, they failed. Price in the June13 gold bottomed at $1525.60. But don't worry, they'll be back. Maybe as soon as later today (after the PM fix?) or Monday. Will they fail again or will we get The Final Washout as we've been mentioning? We'll see...

Here's the 5-minute chart from earlier today where you can see the action in all its glory. Again, note the selling in the final 10 minutes before the open that lowered price from $1544 to $1536. This was the final attempt at mustering enough selling to prompt a washout at 8:20. It didn't work. Yes, price immediately fell $10 at the open but, again and significantly, it stopped at turned at $1525.60.

OK, so where are we on the long-term charts? I apologize for having to use these FTC charts but they're the only ones that I can access that show the "continuous" price. You should be able to click on them to expand them. NOTE THE LOWS IN RED.

Look, as stated above, I can't imagine that they're not going to try again soon. The Spec Momos might even get a little help from The Forces of Darkness. I mean, shoot, why not? All of the selling that will materialize below $1525 will allow The Cartels to cover all kinds of additional shorts. Again, we'll see. But you have to be prepared, both mentally and financially, for this to happen. Both gold and silver are historically oversold from a CoT perspective. To remind you of this and to prepare you for today's CoT, let's go back and look at the CoT structures from the lows on the charts above.

On 12/27/11, as gold was bottoming at $1525, the weekly Commitment of Traders Report looked like this:

  • LargeSpec longs 167,413. LargeSpec shorts 36,625. Net long ratio 4.57:1
  • SmallSpec longs 57,327. SmallSpec shorts 24,183. Net long ratio 2.37:1
  • Gold Cartel longs 162,522. Cartel shorts 326,454. Net short ratio 2.01:1
  • Total open interest 418,945
  • On 5/29/12, the Commitment of Traders Report looked like this:

    • LargeSpec longs 167,439. LargeSpec shorts 56,727. Net long ratio 2.95:1
    • SmallSpec longs 49,856. SmallSpec shorts 29,859. Net long ratio 1.67:1
    • Gold Cartel longs 170,208. Cartel shorts 300,917. Net short ratio 1.77:1
    • Total open interest 419,991

    Last week (and today's will be even more dramatic), the CoT looked like this:

    • LargeSpec longs 202,634. LargeSpec shorts 82,428. Net long ratio 2.46:1
    • SmallSpec longs 52,253. SmallSpec shorts 29,937. Net long ratio 1.75:1
    • Gold Cartel longs 137,205. Gold Cartel shorts 279,727. Net short ratio 2.04:1
    • Total open interest 417,176

    So I ask you: What is different this time? Nothing! No, I take that back. The only real difference is the amount of disinformation and SPIN trying to convince you to sell your metal and convert it back to fiat. Other than that, NOTHING! And wait until we get the updated report today! I'll be sure to update this post and show the numbers in an identical format so that you can make an easy comparison over the weekend.

    Let's move on to silver. On 12/27/11, the silver CoT looked like this:

    • LargeSpec longs 24,026. LargeSpec shorts 17,171. Net long ratio 1.40:1
    • SmallSpec longs 20,294. SmallSpec shorts 13,017. Net long ratio 1.56:1
    • Silver Cartel longs 41,224. Silver Cartel shorts 55,356. Net short ratio 1.34:1
    • Total open interest 103,993

    Then, on 6/19/12, the CoT looked like this:

    • LargeSpec longs 27,767. LargeSpec shorts 17,665. Net long ratio 1.57:1
    • SmallSpec longs 21,704. SmallSpec shorts 14,852. Net long ratio 1.46:1
    • Silver Cartel longs 47,447. Silver Cartel shorts 64,401. Net short ratio 1.36:1
    • Total open interest 122,508

    And last week (7 trading days ago and with OI 11,000 lower) look like this:

    • LargeSpec longs 38,201. LargeSpec shorts 30,055. Net long ratio 1.27:1
    • SmallSpec longs 27,211. SmallSpec shorts 16,854. Net long ratio 1.61:1
    • Silver Cartel longs 57,847. Silver Cartel shorts 76,350. Net short ratio 1.32:1
    • Total open interest 155,755

    So, what's different in silver? A LOT! Well...not really that much. The net ratios are almost identical to where they were at bottoms in the past. But look at the size! The Specs are gross short 50% more contracts than at past lows and the Commercials are long more contracts than ever before. And this was last week! When open interest was 155,755! As of this Wednesday (2 days ago), the total OI had grown to 166,621! How do you suppose the ratios and the total look at this moment?? Perhaps more bullish than I ever conceived possible?!?! Again, we'll at least get an update through Tuesday later this afternoon and I'll post it into this thread once it's released.

    As I go to hit "SEND" I see that "they" have finally succeeded in dropping price through $1525. Funny how this has happened immediately following the London PM fix. So, there you go. Look for a "V" bottom very soon and a sharp rebound by later today or Monday. This is it! This is what we've been waiting for...A final, capitulative, sell-stop running Washout. Let it run its course and then let's see what happens next.


    4:10 p.m. EDT UPDATE:

    Well, I suppose I could go on all afternoon about what transpired today but much of that has been covered in the comments of this thread. Therefore, I'll just stick to two things. This afternoon's Globex action and your CoT update.

    Here's a 1-minute chart of the sharp selloff this afternoon on the Globex. This looks like a margin liquidation to me. Why on earth would an actual person wait until 3:20 in the afternoon to sell into the low-liquidity Globex? Either way, it doesn't make anyone any more confident heading into Monday.

    This week's CoT is out and it wasn't quite as interesting as I'd hoped. In gold, where price rose $11 on an OI change of just 663 contracts, I didn't expect much...and I received little in return. The LargeSpecs reduced their net long by 800 contracts. The SmallSpecs added 2100 net longs and The Cartel added 1300 net short.

    The silver report was surprising, though, in that hardly any changes took place in the Spec category, even though price rose 63¢ for the week and OI rose by 6,486.

    The silver LargeSpecs added 300 longs and also added 500 shorts. The SmallSpecs sold 1400 longs and covered 1100 shorts. THE REAL ACTION and, once again perhaps the brewing Civil War, was in the Commercial space. JPM and their two pals added 2,634 new shorts, bringing their total back up to 78,984. Why did they do that? Because the other commercials added 3,213 new longs, bringing their total to an astonishing 61,060! All of this buying and selling drops the Silver Cartel net short ratio back to 1.29:1.

    Here's how silver looks when presented as it was earlier in this post:

    • LargeSpec longs 38,492. LargeSpec shorts 30,577. Net long ratio 1.26:1
    • SmallSpec longs 25,754. SmallSpec shorts 15,745. Net long ratio 1.64:1
    • Silver Cartel longs 61,060. Silver Cartel shorts 78,984. Net short ratio 1.29:1
    • Total open interest 162,241

    Keep in mind that, as of Wednesday night, silver OI had surged to 166,621 before falling back yesterday to 164,393. Since it appears that The Specs were not adding additional shorts this week, it is unlikely that they became net short as a category. It is also not true that the silver commercials have moved net long. At least not yet.

    However, DO NOT DISMISS the significance of the action pitting nearly everyone in the commercial space against JPM. The action since Tuesday is almost certainly related to the anger JPM must feel at the audacity shown by those who are seemingly attempting to challenge them.

    If we survive the weekend, Monday and the rest of next week are certainly going to be...uhh...interesting. Get some rest and relaxation this weekend. You're going to need it.


    About the Author

    turd [at] tfmetalsreport [dot] com ()


    Apr 13, 2013 - 2:59pm
    Apr 13, 2013 - 3:02pm


    I was there the past two days and they are selling loads of PMs. And I've noticed a lot of obviously new stackers asking about product and price, looking like they're ready to fight off muggers, and even a couple of the 'check price and go to ATM' guys.

    No bullion sellers at all lately according to the guys in the shop. Lots of people selling watches and silverware, but they hardly count towards any trend since they have no idea about recent price action.

    The owner has been telling me for weeks that he's aggressively stocking up and having some trouble getting what he wants. He could close for volatility, but he's also gained dozens of new customers recently by being there with enough balls to STFD so he can BTFD himself.

    I found yesterday quite exhilarating and saw it as a buying opportunity.

    Will the price go even lower? Maybe. I care, but not enough to pass up this price and availability.

    Plus, I brought home a new friend. He's 101 years old, says his name is TEN, and wears a cool feather hat that says "Liberty" on it. Doesn't say much, but I sure do VALUE him just the way he is, intrinsically.


    Xavier Cromartie
    Apr 13, 2013 - 3:11pm

    Gold and silver may be at a long-term bottom RIGHT NOW

    "Gold's parabolic move began at 1477. What has happened is that gold has made a 100% Fibonacci retracement of the parabolic move." "Eagle-eyed technicians will notice that there is actually a very slight downward tilt in the silver channel. Channel support is currently at 25.90." Gold and silver may be at a long-term bottom RIGHT NOW

    Apr 13, 2013 - 3:12pm

    News Blast: World - Markets - Defense


    Give Basel A Chance Before Crafting New Reforms - Mayra Valladares, AB

    Gold Heading for Bear Market

    Goldman Sachs Sees Strong Equity Returns Globally Through 2015

    Why Your Tax Return Might Be Refused - Cyrus Vance, Wall Street Journal
    5 Myths About the Federal Income Tax - Steven Weisman, Washington Post
    The Myriad Penalties Of the Tax Code - Sita Nataraj Slavov, The American
    Needed: A Tax Reform That Offends All Special Interests - Peter Rush, IBD
    Should You Dump TIPS, Start Buying Stocks? - Howard Gold, MarketWatch
    Paul Krugman's Misguided Lust For Fiat Money - Editorial, New York Sun
    When Shareholder Democracy Is a Sham - James Stewart, New York Times
    GOP Must Say No To Obama's Growth Busting Budget - Larry Kudlow, RCM
    The Worst 4 Years of Economic Growth In U.S. History - J.T. Young, Forbes
    Lionized By 60 Minutes, 19B Plaintiff's Well Runs Dry - Paul Barrett, BBW
    To Be Born Poor Does Not Mean You Will Die Poor - Watkins & Brook, Forbes
    Immigrants On the Dole? Now That's a Myth - Shikha Dalmia, Bloomberg
    Gov. Brown Touts CA In China, California Empties - David Davenport, PM
    The Most Depressing Job Interview Ever Occurs At Starbucks - The Onion

    Obama's Lazy Status Quo Budget - Robert Samuelson, Washington Post
    Obama's Budget Is Big, But Bush Spent Even More - Chris Edwards, Cato
    Deficit Reduction, Minus the Reduction - Steven Rattner, New York Times
    The Budget Process Is a Bipartisan Fraud - Jeff Dorfman, RealClearMarkets
    The Irrationality of Goldbuggism - Paul Krugman, New York Times
    The Very Clear Relation Between Gold and Growth - Nathan Lewis, Forbes
    The Mind Economy Needs Immigrants - Mark Zuckerberg, Washington Post
    Manufacturing Is Back, But Where Are the Jobs? - Rana Foroohar, TIME
    Virginia's Crony Capitalist Candidate - Kim Strassel, Wall Street Journal
    Ideology Drives the Fed, Not Free Markets - Jeff Snider, RealClearMarkets
    Can Any Currency Challenge the Dollar? - Matthew Lynn, MarketWatch
    Bitcoins Are Digital Collectibles, Not Real Money - Louis Woodhill, Forbes
    China's Shadow Banking Rings Alarms - A. Evans-Pritchard, The Telegraph
    Thatcherism, Rest in Peace - Aditya Chakrabortty, Bloomberg BusinessWeek
    Bullish S&P, Other Indices Not So Cheery - Larry McMillan, MarketWatch
    Investors Are Back With a Vengeance - Hibah Yousuf, CNNMoney
    Charles Schwab Still Roots for Small Investor - John Waggoner, USA Today

    Optimistic About 2013? Your Brain Is Numb - Paul Farrell, MarketWatch
    If You're Thinking about Dumping Stocks, Stop! - James Kostohryz, TSC
    QE-Forever: Ben Goes Self-Basting - Howard Simons, Minyanville
    Cyprus Rescue: It Goes From Bad to Worse - Mohamed El-Erian, CNBC
    Financial Globalization in Reverse? - Baily and Lund, Project Syndicate
    The Real Significance of the Bitcoin Boom (and Bust) - Michael Sivy, TIME



    South Korea Is the Real Problem Here - Edward Luttwak, Foreign Policy
    Obama Dangerously Naive on N. Korea - Lefkowitz & Whiton, Wash Post
    Kim Jong-un Is Our Best Hope - Zachary Gallant, RealClearWorld
    Iran's Crazy Enough to Use a Nuke - Steven David, The American Interest
    Syria's Second Revolution - Michael Weiss, NOW Lebanon
    Thatcher's Legacy: An Isolated Britain - Anne-Marie Slaughter, FT
    Thatcher Saved UK from a Cuban Fate - Dominic Sandbrook, Daily Mail
    David Cameron's Thatcher Problem - Jonathan Freedland, The Guardian
    Why Is Iran Running Out of Medicine? - Marc Herman, Pacific Standard
    Germany's Growing Anti-Euro Party - Derek Scally, Irish Times
    How Pakistan's Brightest Flock to Terror - Sebastian Rotella, ProPublica
    Japan Needs Babies, ASAP - Richard Jackson, The World Today
    Dead? Al-Qaeda's Mounting a Comeback - Bruce Riedel, The Daily Beast
    China's Four Big Blunders - Collins & Erickson, China Real Time Report
    Portugal Creates Another Euro Headache - The Economist

    Bring Back Thatcher's Fighting Spirit - Daily Telegraph
    Arab Spring? Not If Churches Are Firebombed - New York Post
    Obama Administration Aimless in Korea - New York Times
    Japan's International Amnesia - JoongAng Daily

    Has Pakistan Changed Its Tune Toward Afghanistan? - IISS
    Here's How America Can Topple Assad - CSIS
    Can Erdogan Deliver His End of the Bargain with Israel? - INEGMA
    Who Will Shape Iraq's Future? - Foreign Policy Research Institute

    Kim Jong-un's Dangerous Game - David Ignatius, Washington Post
    Another Afghan Civil War Looms - Con Coughlin, Daily Telegraph
    China's Unlikely Rival: Japan - William Pesek, Bloomberg
    Casting Doubt on Japan's New Experiment - Charles Wallace, Reuters
    The Case for Supporting Bashar al-Assad - Daniel Pipes, National Review
    Have Syria's Kurds Had a Change of Heart? - Daniel Nisman, Hurriyet
    On North Korea, Keep Calm and Carry On - Ted Galen Carpenter, Cato
    Who Pays for North Korea's Mind Games? - Bradley Martin, Global Post
    The Two Irelands Need One Economy - Dan O'Brien, Irish Times
    A Russia-China Alliance Brewing? - Harold & Schwartz, The Diplomat
    America's All-Powerful Cuba Lobby - William LeoGrande, Foreign Policy
    Factoring Hamas into the Peace Process - Nathan Miller, Times of Israel
    Giving Guns to Somalia Is a Good Idea - Gwynne Dyer, Georgia Straight
    Slovakia's Ongoing Segregation Nightmare - Aaron Lake Smith, Vice
    The Power Ship Keeping Lights on in Beirut - Simon Tisdall, The Guardian



    White House Wanted DIA Finding Kept Quiet - John Bennett, Defense News
    N. Korea Intel Underscores Sensitivities - Sanger & Schmitt, NY Times
    To Stop Pyongyang, Stop South Korea's Enabling - Edward Luttwak, FP
    N. Korea Aids Bid to Boost Japanese Military - Nishiyama & Sekiguchi, WSJ
    War in Korea Unlikely - Max Ehrenfreund, Washington Post
    U.S.-China Nuclear Silence Leaves Void - Jeremy Page, Wall Street Journal
    Navy Lags in Building China Ties - Sydney Freedberg, AOL Defense
    Pentagon's Fantasy Budget - Jen DiMascio, Aviation Week
    DOD Budget Cuts Hit Military Families - Steven Beardsley, Stars & Stripes
    Army Preps for Zombie Apocalypse - Spencer Ackerman, Danger Room

    Ft. Drum Plans Drone Hangar Expansion - G. Block, Watertown Daily News
    Budget Would Cut Local Military Spending - Adam Ashton, News Tribune
    Budget Good for Connecticut Contractors - Brian Dowling, Hartford Courant
    Virginia Braces for BRAC - Hugh Lessig & Michael Welles Shapiro, Daily Press
    Repair Work by Private Yards Won't Be Cut - Bill Bartel, Virginian-Pilot

    North Korean Nuclear Developments - Bulletin of the Atomic Scientists
    The Future of U.S. Special Ops - Linda Rodriguez, Council on Foreign Relations
    The Gulf Military Balance: Missile and Nuclear Dimensions - CSIS
    The FY14 Budget and DOD's Long-Term Challenges - T. Harrison, CSBA
    Time to Move from Tactics to Strategy on Iran - Atlantic Council

    N. Korea Nears Nuclear Missile - Shanker, Sanger, & Schmitt, NY Times
    U.S. Questioning Kim's Power, Motives - Jay Solomon, Wall Street Journal
    Kim's Dangerous Game - David Ignatius, Washington Post
    Amid Cuts, DOD Protects Korean Readiness - Elaine Grossman, Natl Jrnl
    Afghan Withdrawal Risks U.S. Intel Collection - Gopal Ratnam, Bloomberg
    Interview with Gen. James Mattis - Jim Michaels, USA Today
    10 Ways to Fix the Drone War - Rosa Brooks, Foreign Policy
    Pentagon Looks to Cut Furlough Days - Lolita Baldor, Associated Press
    Pentagon Weapons Spending Down 4.5% - Tony Capaccio, Bloomberg
    A Russia-China Alliance Brewing? - Harold & Schwartz, The Diplomat
    PLA Strategist Reflects Military's Mainstream - Miles Yu, Wash. Times
    Space Big Topic in U.S.-China Security Talks - Andrea Shalal-Esa, Reuters

    victori zman
    Apr 13, 2013 - 3:14pm

    zman re:CEF

    Ranting Andy recently wrote about Closed end bullion funds. You can see there that the current discount which you mentioned is indeed a 12 years low. At the end of 2000 the discount got as low as 15%.

    DeaconBenjamin ¤
    Apr 13, 2013 - 3:21pm

    Paulson Loses More Than $300 Million as Gold Declines

    Paulson hasn't lost anything unless he sold yesterday.

    Apr 13, 2013 - 3:26pm


    Your use of the word "purpose" is the reason you are failing to connect the dots. As tmosley said 1oz=1oz. In fiat one piece of paper with printing on it only equals another piece because the government says so. However a singular piece of art is considered to have intrinsic value even though its consituent components and method of production may be exactly the same as a dollar. There is no "purpose" in value. The purpose for which some buyer intends to use something has an effect on a price for some given transaction. Notice people almost never use measures or amount when discussing intrinsic value. Or value in general. Sometimes you may hear it said that something is valuable meaning it has high value. The value can change. The intrinsic of it does not. Intrinsic means by its very nature. It does not mean that its value is constant or even that it is tied to something pyschological such as the purposes some monkey with long legs may put it to use for. The value of a dollar is not based on the paper it is printed on it is based on the edict of a government. When that government goes away the dollar is worth nothing. The paper might be worth something. The paper has intrinsic value. The dollar does not because it is merely an idea existing in people's heads. When 1 billions years ago when humans did not exist 1oz of gold equaled 1oz. But dollars meant nothing. A dollar is NOT the paper its printed on. A counterfeit dollar does not equal a normal dollar. Even though they may be produced in exactly the same way and have according to most people EXACTLY the same "purpose". The two notes though have almost exactly the same intrinsic value. "Purpose" is a human construction. Its has no intrinsic meaning. No intrinsicness itself. Applying it to the term intrinsic value is a fundamental misunderstanding. This is a common mistake. People make this mistake all the time in biology. They say things like "The purpose of the liver is to purify things in your body". You can only make this statement if you believe in intelligent design. Because things only have purpose when something has designed it. If you are a believer in natural selection as a mostly random thing, then nothing has "purpose" it just happened that way due to trends. This is called the teleological-fallacy: It is constantly amazing to me how many people deride creationists yet talk in terms of things in nature having purpose and instinctively validate the creationists arguments. Its easily 50% or more of people who thing creationists are idiots. Me I am agnostic and I admire consistency more than the sheep like following of current ideas. So the whole thing is rather bemusing in a sort of "Sigh most people are hypocrites, aren't they?" sort of way. The world is older than humans. The purposes that we put things to determines how valuable we believe things to be and how much of a price we will pay at some given time. It has no bearing on the intrinsic nature of things. Such as overall rarity affecting supply. There is no overall rarity on the dollar. Its pretend. It can be infinite. Because it has no intrinsic nature. It is whatever the USA defines it to be and has in fact be redefined many times.

    Chevy Thunder
    Apr 13, 2013 - 3:27pm

    Paulson is not a doomer, so the laws of accounting apply

    The argument that Paulson hasn't lost anything unless he sold is the same argument that Lehman made about their MBS portfolio until they imploded. It doesn't matter in the slightest if you sold or not.

    You have the choice to delude yourself or not with regard to the value of your gold and silver.

    DeaconBenjamin buzlightening
    Apr 13, 2013 - 3:30pm

    Nice to have a supportive wife

    My wife has been supportive since about 2004. Before that she was tolerant.

    Apr 13, 2013 - 3:30pm

    Hedge funds have been right so far . . .

    Of course, JPM is still on their side, as agent of the Federal Reserve, a cabaal of private banks . . . their job is to keep people away from the silver market--the bankers' Achilles' heel.

    Apr 13, 2013 - 3:37pm

    Snippet on silver from Dr. Jeffrey Lewis . . .

    Silver is as Much the Canary as Gold

    Silver may be in an even more attractive position for a rally than gold because of its COT structure that shows pronounced short futures positioning in concentrated hands.

    Also, many developments in the financial markets tend to make holding silver look good. These include the Zero Interest Rate Policy or ZIRP, the LIBOR scandal, money laundering, the MF Global disaster, and the ongoing manipulation of CPI and jobs data to make the headline economic picture look much rosier than it really is.

    Basically, the price of silver loves inflation. The almost 500 percent rally seen in the price of silver from October of 2008 to April of 2011 as the price rose from 8.44 to 49.77 was inflationary, and it was fueled by widespread concerns over a shaky financial system and the huge piles of money being printed to prop it up.

    Furthermore, that was not just a minor short covering rally fed by blind-trading latecomer hedge funds. The rally in silver to a new all-time high was sufficiently threatening to be effectively halted and the market forced into a consolidation phase above the 26 level by a reverse Hunt, CME margin increase debacle.

    As that key support level approaches once again, silver continues to look attractive as a long term investment.

    ancientmoney DeaconBenjamin
    Apr 13, 2013 - 3:40pm

    @DeaconBenjamin re: supportive wife . . .

    I have had a supportive wife since 1974. Before that, she was my supportive girlfriend.

    Katie Rose
    Apr 13, 2013 - 3:41pm

    "Yesterday sure was fun!"

    These were the first words out of my sister's mouth this morning.

    And why was it so fun?

    Because PATRIOT FAMILY and his wife and children, and URANIUM SPRINGS and his wife and children, spent the afternoon at our little farm. Then we went out to eat.

    We put them to work, and now the greenhouse is ready to plant, and the rear window to the barn is not going to blow away.

    Me bad.

    All I can say is that if these two families are any indication of TF Metals participants, then we are all really, really blessed being here.

    My 87 year old Mom wants to know where these "really, really nice people come from? How did you meet them?" she wonders.

    "TF Metals" I tell her. "I met them on the internet."

    She shakes her head in disbelief.

    Things sure have changed since she grew up as a little girl with an outhouse and no electricity in rural Kansas during the Great Depression. Making friends over the internet is such a radical idea to her....

    TURD, Thank You! for the wonderful community you have created here for us all!

    Apr 13, 2013 - 3:43pm


    Since TF started bringing up the GLD siphoning several weeks ago I've been wondering a little bit if Paulson (and Soro's) and his hedge fund hasn't been one of the entities taking delivery of phyz out of it.

    It'll be interesting to see in their next SEC filing what moves they've made regarding GLD recently.

    Texas Sandman
    Apr 13, 2013 - 3:45pm

    Were the hedge funds right shorting in mid-2012?

    Looks to me like they got their genitals fed to them for lunch.

    How about mid-2007?

    Have they ever been right about anything? Looks to me like you could do better flipping a coin.

    So now their shorts are right off the chart. Want to follow them?

    Basil Chevy Thunder
    Apr 13, 2013 - 3:46pm

    Well said Chevy ...

    .... and the same applies to the idiots who claim

    "I don't care about the price smash because I have as many ounces today as I had yesterday"

    These people are just deluding themselves that the price doesn't matter. I WISH it didn't matter, but unfortunately it does, and we just have to deal with that fact on a rational basis, rather than pretending otherwise

    Lamenting Laverne
    Apr 13, 2013 - 3:50pm

    This is what making a cash only market for gold looks like to me

    I had been offline all day and came home from a great dinner with great wine - a wee bit tipsy - to log on and see carnage all over the screen.

    The great wealth transfer has started for real.

    @ The Green Manalishi about GoldTrends - I agree, and it suddenly also makes sense of the news story that JPM aquired a new big vault in NY many months ago.

    A couple of days ago, it was reported that JPM was removing *registered* inventory from the Comex - much more than other Comex participants. That could be real physical deliveries, but it could also be the same as when we take cash out of the banking system - namely that JPM is no longer in delivery mode but in preserving mode. If the Comex breaks, they are not going to have "money in that Comex-bank".

    The orchestrated decline yesterday has resulted in what is described as an illiquid non-stop market. To me, this means that market makers are not stepping up to take the buy side of the long liquidation.

    On Monday, when the paper market is likely to keep plummeting due to margin calls over the weekend - worsened if the physical market remains closed or access disturbed - the short hedgies and JPM will be zipping coffee, while watching Gold paper longs being decimated (wealth transfer). They will cover their shorts all the way to the bottom of the point, where the panic selling exhausts itself.

    If they are happy with the level, they will start buying to create the bottom. If they are not happy, i.e. too many strong longs are not selling, and hence posing a continued threat to the fact that they have no more physical to deliver, my guess is that they will hike margins - "due to excessive volatility" - to keep the flush going a bit longer - possibly all the way up to 100%.

    By the time the paper market turns around JPM will be long or neutral. My guess is that they will be long - having taken the other side of the phys hedging initiated due to the closure of the systems in London, because those guys actually have physical to deliver. Then JPM will stand for delivery, and take the loot into their own non-comex vault, to be used in the new monetary paradigm.

    The few remaining stubborn gold longs, that could not be flushed, stand for delivery from now on, and when the remaining Comex inventories have been emptied. The Comex will default and pay in cash - or alternatively there will have been unlocked so much physical that the stubborn longs can be served, and the Comex will live on as a cash gold exchange.

    I think that Jim Sinclair is right about this bit, but I just don't see how he could envision that outcome without a washout like this aka the final destruction of the paper gold market. Come to think of it - he did say he expected a washout - but he also said that he though the low was in by his birthday. Maybe he got some bad intel.

    Where this is ending dollar price wise is anybody's guess - much lower I suspect - but I feel very encouraged. This is proof that the wheels are coming off and that they have very little physical to deliver, so they needed to break the market to get out of their obligations to avoid outright default.

    In any case, I find it hard to believe that this is just another rinse and repeat to start another paper cycle, because of the unprecedented outflows from GLD. It seems, they are now dismantling their cash cow and prime retail control mechanism, which tells me that soon they won't need it anymore.

    I think that we may have the "Gold Price Going Dark" for a period coming up quite soon. One could argue that the coindealer website outages and the London system unavailability means that this has already started. In any case it seems we will all soon see if all our hours of research and analysis will prove us right, or if we will be revealed as the biggest suckers of the century.

    As I said - I am very encouraged by yesterday's action - even if it stings to look at. PS: Guess what I had for dinner..... Fried Squid ;-)
    Urban Roman
    Apr 13, 2013 - 3:50pm

    The "Cobalt Bomb"

    What I've been trying to tell you is, you're worried about the wrong thing. How many tons of Co-60 is your hypothetical Cobalt Bomb going to make?

    Atom bombs are always impressive, of course. A really big flash and bang. And they do spread radioactive waste far and wide.

    But for sheer tonnage of high level nuke waste, you can't beat a power station that has been running for several decades. ... In fact, if you wanted to wipe out a lot of humanity (including yourself probably), you could drop a MOAB on an old rusty nuke plant. That would be the ultimate dirty bomb.

    And that's it, I'm putting away my Dr. Strangelove circular slide rule now. No more talk about nukes.

    ancientmoney Texas Sandman
    Apr 13, 2013 - 4:07pm

    @Texas Sandman re: hedge funds shorts right?

    As I said, they are so far into 2013. You said:

    "Have they ever been right about anything? Looks to me like you could do better flipping a coin.

    So now their shorts are right off the chart. Want to follow them?"


    No sir!! I am longgggggggg the physical.

    No way I would consider hedging against my physical--it is a loser's game.

    Unless, of course, everything will be fine and dandy going forward, the debt problems are resolved, the U.S. has regained its dollar supremacy, we have re-engineered our service economy to produce real things people need and want, all people who want good paying jobs have them, bonds are worth buying for their yields, and on and on.

    Chevy Thunder
    Apr 13, 2013 - 4:23pm

    Tmosley: nonsense and misinformation

    Tmosley said....

    Dollars are measured in dollars. Change what a dollar is, and it can be anything. Gold is measured in weight. This is incredibly stupid, sorry to say. Why the fuck would the valuation metric for gold be different than any other asset in the world? This entire website is about the USD value of gold and silver, and the drama of those daily fluctuations in the US Dollar value. The only reason you wish to measure in weight is because you don't like the current price, and it helps soothe your financial ruin. You, and a few other deluded doomers, are the ONLY ONES ON PLANET EARTH WHO MEASURE GOLD IN WEIGHT. When silver was going up, all you did was brag about the price and your entry points.... "$60 by next week.... Buy with both hands at any price... Silver will never see $30 again!" The weight is the quantity. Period. It was such garbage, and your constant misinformation has cost many people LOTS of real, true wealth. You're the guy who said that he buys silver with every weekly paycheck, but also believes silver will go to ZERO in price. WTF? Why buy something at $25 if you think it will be at $5 sometime soon? You've manufactured an incredibly bizarre and nonsensical thesis because reality makes you look like an idiot. ...... Such fucking garbage.... How much wealth have you cost others with your delusional, blabbering nonsense?
    Lamenting Laverne
    Apr 13, 2013 - 4:25pm

    New Thread

    New Thread

    Apr 13, 2013 - 4:27pm

    @Chevy Thunder

    Let's not become abusive. Tmosley is perfectly entitled to his view.

    Apr 13, 2013 - 4:37pm

    Harvey's Up!

    Harvey: Gold has been smashed by $65.00 during the past few trading days and the culprit: the "selling" of 10 tonnes of gold from Cyprus worth around 520 million USA dollars (400 million euros). Too many depositors fled the scene of the crime leaving Cyprus now exposed. And what do the press concentrate on? 10 tonnes of gold. Hong Kong brought in 97 tonnes of gold last month and gold hardly flinched. Germany refuses to give any more money. Also Portugal is on the doorstep asking for money. Portugal was loaned 78 billion euros in 2011 and now they are asking for an extension on that loan. However next year 14 billion euros in bond redemptions comes due and 15 billion euros in the following year. Good luck to them. It also looks like Slovenia will be asking for bailout funds. We lost a monstrous 22.86 tonnes gold at the GLD on Friday. Ladies and Gentlemen, this is no gold liquidation...this is gold that China is demanding over in London. Bloomberg: Billionaire John Paulson lost more than $300 million of his personal wealth on his gold bet, as the precious metal fell to its lowest price in almost two years. Paulson has roughly $9.5 billion invested across his hedge funds, of which about 85 percent is invested in gold share classes. Fmr Asst Treas Scty Paul Craig Roberts: “This is an orchestration (the smash in gold). It’s been going on now from the beginning of April". Tyler Durden: Gold prices just entered a bear market. Down 21% from their mid-2011 highs. Andrew Maguire: China having purchased and taken delivery of over 400 tons in less than a month and a half. And since the beginning of the year (that figure) is substantially higher. It’s probably in the 800 ton range. All this and more on...

    The Harvey Report!


    Apr 13, 2013 - 4:42pm

    I don't read what "Chevy"

    I don't read what "Chevy" (the name changing troll from ZH who has pathetically followed me here) says because he is scum, and I have him on ignore.

    Let the fact that I have completely and totally demolished every argument that he ever made to the extent that he felt that he had lost all credibility, forcing him to make new user IDs for himself stand as evidence of the fundamental worthlessness of anything he has to say.

    Apr 13, 2013 - 4:52pm

    @ tmosley

    Its probably a good idea not to read his latest. chevy makes some pretty telling points that would not be pleasant for you to read.

    Chevy Thunder
    Apr 13, 2013 - 5:29pm

    TMosley: biggest quack on the internet

    And let the fact that Tmosley's financial advise has "completely and totally demolished" his own and others' wealth be all the credibility you need.

    "Silver will be at $60 next week..... Silver will never see $30 again! Buy at any price! Price doesn't matter!

    Apr 13, 2013 - 7:13pm


    Your anger and what appears to be a very personal animosity is kind of invalidating any point your attempting to make.

    Saying Tmo is the biggest quack on the internet is preposterous on it's face and in it's presentation.

    Apr 13, 2013 - 9:01pm

    Fellow Travelers

    I have the time so I will sing, as I'm just a man, but I will fan, hearing lost songs of lovers, and you fellow travelers. Leave me sad and hollow out of swords. It could happen to you so think for yourself. If I should stumble, Catch my fall. If you get the drift, or succumb to the eddies, either way, you will fit, as all others, in the vortex, along the continuum, of infinite infinitesimals.

    Some are HFTs, tending to be right, for the sure bet, and some LFTs, tending to be left, for the sure thing, but nonetheless, human in kind, in greed, tending to be right, and in fear, tending to be left, approximately, but both summing to the whole, a necessary supposed evil, during the ascent of man, but, some have short time horizons, but it don’t make them blind, and, some have epoch time horizons, but it don’t make them seers, making, nonetheless strange bed fellows, fellow travelers, yeah. Some are here and now, and some there and then, and if they stumble, catch their fall. Some live for themselves, and some live for others, and if they should stumble, catch their fall. Some predict the near field and some predict the far field, and if they should stumble, catch their fall. Damn it, whatever what you are, catch their fall.

    Thanks for the being here, and then there, and then everywhere.
    Thanks for the trying, and hitting save, and taking the time.
    Thanks for the information rush, the urls, and recitations.
    Thanks for the head trips, making one spinning like a top.
    Thanks for the ennumerable possibilities and prognostifications.
    Thanks for the enlightenment and insights from perspectives.
    Thanks for the entertainment, you guys and the almighty just ROCK.
    Thanks for the data points, hoping to make helpful interconnections.
    Thanks for the glowing hearts, you all are in reality real people.
    Thanks for the catching the fall, when one will stumble.

    Sincerely Yours and Most Respectfully.
    It truly is an honor to be in such company,
    be it in summary on the back page in preferred banishment.
    It truly is an honor to be your sincere admirer.
    as well as your ever-trying obedient servant.

    I have the time, so I will sing, yeah I'm just a boy but I will win, yeah Lost song of lovers, fellow travelers, yeah Leave me sad and hollow out of words. It could happen to you so think for yourself, If I should stumble Catch my fall, yeah, ... Traveled and unwound my own truth, yeah, I've laid my head on the rock of youth, yeah Trusted and then broken my own word, Just to keep me free in this mad, mad world. It could happen to you so think for yourself, If should stumble Catch my fall, yeah, please catch my fall.

    TomMack 57Goldtop
    Apr 13, 2013 - 10:50pm

    LCS update

    real quick: i got to the coin shop at 2 pm... no 90% no silver maples, phils. i did manage to get a few ASE $29.28 a piece . they said they were cleaned out on friday. lets see if they bounce back with some inventory next week. they did have fancy silver, pandas, canada wild life, and us parks.

    edge DeaconBenjamin
    Apr 13, 2013 - 11:17pm


    I'm sure he didn't sell jack, and he'll proably be buying monday and tuesday


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