Gold Is Going To $800

184
Thu, May 30, 2013 - 11:28am

(The reverse psychology test from yesterday is working so well, I thought I'd better keep it going!)

Well, isn't this nice? A genuine, bona fide rally! What's the deal? I imagine that much of this is being driven by new long interest in gold...well, not that new. As we approach June13 contract expiration, we have seen a bunch of contract holders sell but not immediately roll into August. In fact, total open interest in gold fell by 24,000 contracts on Tuesday alone as June contracts were sold and/or covered.

So today, with price rallying, those longs who sold Tuesday or late last week and didn't immediately roll because they had hoped for lower prices before getting back in, are suddenly rushing back in and we're up over $20 as I type. Hey, whatever...we'll take it. So now, what?

Take a look at these charts. On the daily chart, notice the undeniably pretty double bottom at $1350. All along, Andy has been reporting very heavy buying interest and huge pending orders at and below $1350. Well, it certainly looks like he was accurate because every time the paper bears tried to break price down below that level, price almost immediately reversed and moved higher, no doubt on the back of bullion bank buying which hoped to keep those orders from filling. Now, not only does the daily chart look compelling, look at the shorter 4-hour chart, too. We had that spike high of $1413.30 last Wednesday as The Bernank's prepared remarks were released. You'll recall that price then collapsed amidst all the nonsense talk of "tapering". Well, lookyhere. We are right up against that level as I type. A move through and close above would be very bullish and would set the table for a move back toward the early-May highs just below $1500.

To bring all of this in line with yesterday's post...Part of the move today can be traced back to some lousy jobless claims and other data released earlier today. Yesterday's post carried the theme that the data was about to turn worse and all the talk of tapering was going to fade away. What I postulated yesterday was the possibility that price could be shaken out one more time before the BLSBS next Friday. It could still happen but, obviously, today's action makes it less likely.

Turning to silver, it too is rallying today, though not as aggressively as gold. This is also likely due to expiration as silver didn't/doesn't have as much "dry powder" on the sidelines at this moment. Regardless, look at these charts. First, note that $22 silver is very much like $1350 gold...a very solid floor. Outside of the nonsense shenanigans of two Sundays ago, $22 has held very well. Now, can it get up and go to the upside? Well, like gold, let's watch the spike high from last Wednesday for clues. IF silver can move decisively through the $23.30 area, fresh shorts will begin to cover more aggressively and we'll see a quick move toward $24. From there, the next target is the $24.84 high of 4/26.

Getting back to the open interest numbers, tomorrow's CoT is going to be a doozy. Tuesday was CoT survey day but it was also option expiration for the June13 which goes off the board on tomorrow. As mentioned above, almost all of the paper traders are currently liquidating June positions and rolling them into August and beyond. So, for the reporting week, though the price of gold was up a whopping $1.30, the total Comex open interest fell by almost 8% or 35,000 contracts. That's a lot. I'm very much looking forward to seeing who was buying/covering and who was selling. The silver CoT will be fun, too, as price fell by 25¢ but total OI also fell by about 3,500. Again, who was selling/covering/buying? We'll see. Only have to wait another 28 hours. Grrrr...

Finally, LOTS of interesting stuff emanating from the MENA again today. Just a few days ago, Russia pledged to send S-300 anti-aircraft missiles to Syria and, from the looks of things, they're already there: https://www.zerohedge.com/news/2013-05-30/first-shipment-russian-s-300-rockets-arrives-syria but debka claims that they're not: https://www.debka.com/article/23002/Israeli-intelligence-denies-first-Russian-S-300s-arrive-in-Syria---contrary-to-Assad’s-claim-. Either way, this entire situation is getting stickier by the hour. Now, you may ask what this has to do with a PM-related website but I can assure you, if things get out of control in the MENA, there ain't gonna be any imminent QE tapering, that's for sure. So we're going to continue to watch this closely. One "tell" will be the price of crude. It has magically stayed below the trendline drawn on this chart since the QE∞ announcement last September. If/when is busts through, you'll know something is up, whether or not Syria is "fixed".

And all this talk about World War III has me thinking this morning about a book I read six or seven years ago. It's one of those novels that try to intertwine current events into a fictional format. This one dealt with war in the MENA and looked at it through the prism of The Old Testament prophecies of Ezekiel. Look, it's not for everybody and I certainly don't mean to turn this thread into a religious debate...but I get asked for book recommendations all the time and this is a fun and timely read. You should pick it up before heading out for vacation or to the beach.

OK, that's all for now. As I close I see that the metals are still hanging in there at $1415 and $23. Keep your fingers crossed.

TF

About the Author

Founder
turd [at] tfmetalsreport [dot] com ()

  184 Comments


May 30, 2013 - 12:48pm

Agan

I posted the book because I wanted to make it known to those who might be interested.

From here, any posts debating religious issues will be moderated.

billwilson
May 30, 2013 - 12:48pm

this afternoon will be key

We had a similar nice run 3 weeks ago that got killed when the yen went through 100. It will be key to see if we can hold gains, especially in the miners, until the close. Any afternoon reversal could be ugly.

NonoverlappingMagicCereal
May 30, 2013 - 12:48pm

@sad-descent

I find that if I am upset at the price action it tends to be because of opportunity costs that arise from keeping a portion of assets in something that is a store of value rather than what I would consider an investment. I usually calm down pretty quick because there just isn't much in the way of investments price attractively because of the zero interest rate environment.

Good answer. Even as a 'beneficiary' of the recent bull market in equities, I agree that PM holders shouldn't lose sleep over the opportunity cost because it may very well be illusory. I'll be damned if I know what stocks would look like without ZIRP and QE, or what they'll look like after those policies are phased out, but I bet it isn't pretty in the short term.

JackPutter
May 30, 2013 - 12:50pm

If someone posted this...

I must have just missed it.

Former UBS Banker Says He Wasn't Seeking Underage Prostitutes Because He Had Sex With 10 That Were Over 18


Read more: https://www.businessinsider.com/ubs-buergrin-underage-prostitute-trial-2013-3#ixzz2UnMFNiSp Bankers math.
Southern Cross
May 30, 2013 - 12:50pm

@tyberious

Sir, I do speak only for myself.

Your attitude demonstrates the Bibles Truth. Jesus said His words, His people, His teachings, and He would be hated by unbelievers. It's reasonable to disagree with someone and not believe what they state; however, it verifies the Bibles prophetic accuracy to express outrage at Biblical Truth. Such anger is not natural but deep seeded, from the heart, and is anti God. Makes sense. There are only two forces in play. One is God. One is not.

What proof do you offer the Bible is incorrect?

Muslims, Jews, Christians, Budists, Hindus, and known historical books all teach Jesus existed. World history demonstrates the footprint of Bible accuracy. Biblical prophecy if researched and studied is beyond question.

The question for each of us is was Jesus God's Son?

margaritatime
May 30, 2013 - 12:54pm

awesome

this appeared in my pan this morning. surely it is a divine message.
i believe in bacon and my life has meaning. i haven't even had a friday happy hour this week and feels like a sunday. (face palm).

meanwhile, on the metals front..

SV
May 30, 2013 - 12:56pm

And then things will be different...

Even through a picket fence, one can see the other side. And from behind the blinder of economy, we peer through and see what's there: gold, silver and bitcoin.

The pops today in gold and silver were familiar. It was the sort of evening and morning which younger gold and silver bugs used to stay up all night/wake up early for. This pop of last night and today carried an excitement reserved as of late for Bitcoiners.

The inverse story of today is also familiar: one in which the US Dollar has traded down. This is the true root of the rise in the metals on this day. The dollar will trade up again, but over time as minds are released from the play of domination and subjugation, the USD will serve no purpose, and never trade again.

And then, things will be different.

https://goldsilverbitcoin.com

NonoverlappingMagicCereal
May 30, 2013 - 12:56pm

@TF

Look, CerealMan, you're usual path from here is to parse these comments and then ask further questions in the hope of catching me in some king of contradiction. No such luck today. Maybe some else can help you. I'll be busy the rest of the day.

Well, lucky for both of us I don't see any tempting contradictions in there :)

I would also have accepted as an answer that you'd simply like to see reality start re-aligning with your past prognostications.

Bugzy
May 30, 2013 - 12:59pm

Oh man

Overlap: You are so transparent it is laughable.

You attempt to slip subliminal suggestion into every post.

Losing sleep over over opportunity costs = you are getting no return you know - but please do not worry about that.

What will stocks look like after QE ends - and by inference Gold = Stocks and Gold good in QE so better have stocks because of opportunity costs.

I say again. You are NOT an asset to this site. I ask Turd to terminate you forthwith. How about democracy in action.

Hat tip here if you want non over lap gone

Bugzy
May 30, 2013 - 12:59pm

Non overlap

Hat tip here to keep non overlap

Cottonbelt21
May 30, 2013 - 1:03pm

@ Turd ...

... speaking of Summer reading, highly recommend 'Daemon' and sequel 'Freedom' from Suarez - a high tech, fictional version of how the global financial crisis could play out ... a very rare page turner for myself.

Back to patiently waiting for the 'big trade' via the PM miners ...

ag1969
May 30, 2013 - 1:03pm

Loinlapper

"I would also have accepted as an answer that you'd simply like to see reality start re-aligning with your past prognostications. "

In case you are a little slow, nobody here cares what answers you would accept and which ones you would not accept. We all find you to be nothing more than a nuisance and we all wish Turd would ban you. The exception being the other sock puppets that you blather on with day after day.

I ask Turd to terminate you posthaste.

Hagarth
May 30, 2013 - 1:09pm

Citigroup Inc : Citi Completes the First CNH/USD Cross-Currency

05/29/2013| 06:42pm US/Eastern Recommend: 0

For Immediate Release

Citigroup Inc. (NYSE: C)

Hong Kong - Citi Hong Kong Markets traded the first CNH/USD Cross-Currency Swap transaction using the three-month CNH HIBOR as the pricing benchmark with Bank of China (Hong Kong) Limited (BOCHK). This landmark transaction marks the first trade of its kind in the market and is a new milestone in the offshore RMB business following the announcement by Treasury Markets Association (TMA) on April 25 to launch the CNH HIBOR fixing in June 2013.

The transaction, serving as a tool to hedge against interest-rate risks, will be effective in early July with a 12-month contract period. Interest rates for the two currencies are fixed every three months and are calculated based on the three-month CNH HIBOR and the three-month USD LIBOR, respectively.

This deal underlines Citi's strong RMB trading capabilities and continued focus in establishing our offshore RMB presence with innovative products and solutions. As a pioneer in RMB internationalization, Citi has been providing the full suite of RMB products and services using our global network to provide robust solutions to our clients.

https://www.4-traders.com/CITIGROUP-INC-4818/news/Citigroup-Inc-Citi-Com...

Hunt brother
May 30, 2013 - 1:09pm

Turdville is a hippi style collective farm...

Where self reliant anti-collective individuals gather to share insights

and ideas on their monetary metals. Bizarre irony, but it seems to work!

SilverSurfers
May 30, 2013 - 1:12pm

@Turd

you crack me up, in a major way, title of thread, and follow on, TOO FUNNY!! Got on a funny FACE, laughing at all your jokes, yeah, you are just too sexy.

Rod Stewart-Maggie May
Video unavailable
Bugzy
May 30, 2013 - 1:12pm

Turd

Southern cross did not read your request, or chooses to ignore it. Please 'enlighten' him/her

dropout
May 30, 2013 - 1:16pm

Sell in May and Go Away?

That would be normal in a normal market world. Not this year! Nothing is "normal."

There is a severe shortage of physical gold supply in the far east. This has led to premiums in Singapore reaching a record high there. In two days the volumes at the Shanghai Gold Exchange's benchmark cash contract, have surged from 10,094 Kgs to 19,599 Kgs or 94%!

The Japanese have suffered a nose bleeding 17% drop in the Nikkei during this past week, despite the record amount of liquidity poured into the market by the BoJ. Value investing is almost non-existent. The markets are being driven higher by liquidity, debt and marginal speculation.

The rotational flow of funds from the precious metals sector into stocks, over this past year and half has been slow and methodical, as the search for yield has over powered the search for safe haven status. What we will be witnessing in the coming weeks, if its not here already, is a reversal of this rotational flow of funds, back into the precious metals sector.

This will not be a slow, methodical move. The speed at which this occurs will be breathtaking, as animal spirits are let loose seeking that safe haven, forgetting about yield. Rather than looking for a return on their wealth, these investors will be looking for their wealth returned! Some will demand the physical to hold, others will be 'sheared' as bail-ins become the new bail-outs!

Orange
May 30, 2013 - 1:28pm

Troubling

Wow, a shot to the back of the head? WTF is happening in the US?

MOSCOW – After FBI agents questioned Ibragim Todashev for hours on end about one of the suspects in the Boston Marathon bombing, his father alleged Thursday, they murdered him to keep him from talking.

https://www.washingtonpost.com/world/europe/father-of-chechen-killed-in-...

Kcap
May 30, 2013 - 1:37pm

Attention Fruit Loops

Your agenda is CRYSTAL clear.

Kcap

Howard Roark
May 30, 2013 - 1:41pm

@Troubling by Orange

Seeing that from Europe it´s strange that people don´t take the streets demanding Obottom´s impeachment... if the president was the "malevolent cowboy" (Bush Jr.) it would be a riot.

The IRS scandal, the AP and Fox reporters, Guantanamo, drones and now that strange death are a big mess (I´m sure I´m missing something). No doubt.

Troubling indeed!

HR

Louie
May 30, 2013 - 1:43pm

@ballyale Thou shalt not kill

You are exactly right. If Hezbollah and Al Qaeda would just live up to this, then several of the worlds problems would be solved.

Since neither seem to want to live up to this moral law, why not just let them carry out jihad against each other?

CONSTANTINE Southern Cross
May 30, 2013 - 1:46pm

Southern Cross

Please take your religious convictions to a forum.

Constantine

Southern Cross
May 30, 2013 - 1:46pm

W

W


May 30, 2013 - 1:53pm

@Bugzy - re: hat-tip poll

You forgot to include the counterpoint -- where do those hat-tip who would rather have bacon wafffles and eggs:

...wearing a bacon suit with Kevin:

while admiring this rendition of 'Starry Night':

until the inevitable happens:

...rather than to have to choose Cereal?

tyberious
May 30, 2013 - 1:54pm

Gold Daily and Silver Weekly

Gold Daily and Silver Weekly Charts – Coiling, Coiling…

jessescrossroadscafe.blogspot.com / By Jesse / May 29, 2013

“Asked to do too much, for instance to accommodate misguided fiscal policies, to deal with structural imbalances, to square continuously the hypothetical circles of stability, growth and full employment, then it will inevitably fall short.” Those efforts cause it to lose “sight of its basic responsibility for price stability, a matter that is within the range of its influence.”

Paul Volcker, Fed May Fall Short

Stocks are starting to look ‘toppy.’

Things around the world are ‘shaky.’

The setup for a major short squeeze in the metals is in place.

So let’s see what happens.

Russia is drafting proposals with the G20 on ‘transparency in the raw material markets.’

Matt Taibbi has a new critique of the kleptocrats and their enablers titled ‘Mad Science of the National Debt’ that is worth reading.

“Guaranteeing that Chinese bondholders would get paid off before veterans or elderly citizens waiting for medical care is politically a weird enough idea to begin with, but for the House speaker to think that getting Congress to prepare the government to behave like a bankrupt business would reassure the markets about the stability of U.S. sovereign debt is pure lunacy…

READ MORE

brokerk22
May 30, 2013 - 1:56pm

Southern Cross

You are the best! I love your posts. So much goodness and TRUTH in them.

Peoples Front of Judea
May 30, 2013 - 1:56pm

Thanks turd

I was just about to bring these bible punchers to your attention......No room here ..move along

zman
May 30, 2013 - 2:02pm

Southern Cross

One word- FORUMS. Thank you.

Green Lantern
May 30, 2013 - 2:02pm

Re: Hippie

I'd imagine there are more suits here than tofu, bong hitting, tie die t-shirt wearing individuals. Free thinking people don't necessarily desire to belong to a counter culture. I don't necessarily reject Main stream values, I just see them for what they are. I bet most people here would prefer to blend in. Darn, just over cooked my tofu/sprout burger.

Ricin back in the news again first Mayor Bloomberg and Now Obama. From some pro - gun group. Do ya really think that somebody believes that the countries Chief Executive opens his own mail. This is just stupid kiddie shit. A moron could see through this stuff. What's one step down from a moron? I got a feeling that Argentinus Maximu's comments about events this next month might be correct.

https://www.cnn.com/2013/05/30/us/obama-suspicious-letter/index.html

Watcher Peoples Front of Judea
May 30, 2013 - 2:06pm

@andiejo1

Your loss.

We're told to just shake the dust off and move on. No problem.

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