A Pattern Emerges

229
Wed, Jul 10, 2013 - 12:14pm

Because I'm still adjusting to the time change coming off of my vacation, I found myself tossing and turning last night when I suddenly came to this realization. Though not on the level of Dr. Emmett Brown after hitting his head on his bathroom sink, I think you'll find this interesting, nonetheless.

As you know, The Bullion Banks have engaged in a relentless campaign to lessen their exposure and potential liability in paper precious metal. Since the announcement of QE∞ last September, price has counter-intuitively fallen by over a third from near $1800 to below $1200. All the while, The Bullion Banks have decreased their total net short position in paper gold from 737 metric tonnes to less than 70 metric tonnes (from the CoT survey of 7/2/13). From a chart perspective, it looks like this:

Now, look closely. See anything? No? Look again, even closer. Do you see anything now? Do you see any type of pattern?? I must admit that, prior to last evening, I hadn't seen it, either. But it's there, waiting for you to discover it.

OK. What if now I gave you this? Take a look at the chart below with some notes made upon it. Now what do you think?

Hmmm. Well that's interesting, isn't it? Yes, price is down by over 30% from last September. However, almost all of the decline has taken place during the five calendar months of October, December, February, April and June. In fact, as you'll see below, the vast majority of the decline has occurred during the middle of those months. Hmmm. That's interesting, too.

Now before we dig further, what if I gave you these two charts?

So, now, let's go back to the current decline. What is so special about the months of October, December, February, April and June? I'll give you a few moments to think about that before we continue...

.....

.....

If you guessed, "They're Comex delivery months, Turd!", then you win today's prize! Yes! Those months are, in fact, "delivery" months for The Comex. Recall that the active futures contract is always the front month for delivery. Currently, this is the August13 contract. As of Monday, it had a total open interest of 206,000 contracts and it will stop trading and have it's First Notice Day on July 31. Anyone holding a contract after that date must show their intent for delivery by providing 100% margin in their account. Deliveries to eligible contract holders will then take place through the month of August.

Still with me? Good.

This same process occurred back in September for the October12 contract. First Notice Day was at the end of September and deliveries took place through October. The price of gold peaked at $1796 on October 5 but managed to hang in there for another week or so. But then look what happened and note the exact date:

DATE PRICE GLD TONNAGE

10/12/12 $1773 1,340.52

10/24/12 $1699 1,336.90

10/30/12 1,336.30

So, what do we see here? Near the middle of the delivery month, price began to drop rather steeply and a little bit of gold was shaken out of the GLD "inventory". Then, after a decent rally in November, price began to decline again once we flipped the calendar to the delivery month of December. Look what happened and, again, note the date:

DATE PRICE GLD TONNAGE

12/12/12 $1723 1,351.42

12/20/12 $1635 1,350.52

12/28/12 1,350.82

And now you're thinking, "OK, Turd. What's the deal?". Well, let's continue, shall we? Again, please note the date:

DATE PRICE GLD TONNAGE

2/11/13 $1669 1,326.89

2/21/13 $1555 1,290.31

2/25/13 1,272.85

Well, that's interesting. This time, the mid-delivery-month decline shook out over 50 tonnes of gold from the GLD. "Hmmmm. I wonder what would happen if we tried that again?"

DATE PRICE GLD TONNAGE

4/12/13 $1564 1,158.56

4/16/13 $1321 1,145.92

4/29/13 1,080.64

"Wow. This is awesome!", the Evil Ones said. "We hit price in February and shook out 50 tonnes. Then, even while price was stable from 2/21 - 4/12, we were able to grab 114 more. Finally, by breaking price down through the floor at $1525, we got 75 tonnes in April! What a deal!!"

Once again, price was relatively stable mid-April to mid-June, while no Comex deliveries were taking place. Then look what happened, again paying special attention to the date:

DATE PRICE GLD TONNAGE

6/12/13 $1394 1,009.85

6/28/13 $1181 969.50

7/9/13 939.75

So, what is the lesson here?

  • The Bullion Banks have utilized the manufactured price drop to lessen their exposure and potential liability in paper gold by over 90%.
  • This resulting "discount" in paper price has led to a surge in global physical demand. For example, see here: https://www.mineweb.com/mineweb/content/en/mineweb-gold-news?oid=197040&sn=Detail
  • However, Registered and Eligible Comex inventories are dangerously low. As of yesterday, The Comex showed 224 tonnes of Eligible and just 35 tonnes of Registered (ready for delivery).

What to do, what to do? The plan is clear! Raid price during the delivery month!! Create the selling and panic necessary to shake loose tonnage from the GLD. Use this gold to settle delivery obligations, not only in New York but London, too. Once the current delivery "crisis" has passed, leave gold alone to wallow and flounder, only acting to cap price whenever necessary to keep the downtrend in place. Once the next delivery month arrives: Wash, rinse and repeat.

Going forward, this likely means that we're "safe" for about another month. Besides, it's summer and we're in the middle of vacation season. Aside from the occasional short squeeze or price plunge, the pattern suggests that gold will be stable between $1250 and $1350 until early August. But then....watch out!

Forewarned is forearmed.

TF

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  229 Comments

argent rampant · Jul 10, 2013 - 5:55pm

@SRS Re: SVM

Thanks!

Bollocks · Jul 10, 2013 - 5:58pm

11% pay rise for UK MP's

...meanwhile public-sector pay rises are capped at 1%.

Yup. So what's new.
-----------

MPs' pay: Watchdog to recommend pay rise of more than £6,000


https://www.bbc.co.uk/news/uk-politics-23262503

DayStar Jimymac · Jul 10, 2013 - 6:09pm

RE: Comex

Jimymac, Harvey says JPM has a big deficit in their account and they can't deliver. Seems there have been contracts pending for delivery since May. The movement in and out of the vaults is erratic and illogical. Often they get "corrections" amounting to millions of dollars. Their bookkeeping is atrocious on the face of it. They have contracts appear and disappear from their OI physical delivery schedule with no notice. It is totally bizarre, and they never bother to explain. Sometimes they get deposits or corrections in physical gold with exact amounts, which physical bars seldom are. There is evidence SLV is double counted, and accounts may be settled in paper at a 25% premium. Comex is a mess. Ranting Andy doesn't think the numbers are meaningful enough to even discuss. He could well be right. The whole thing might be smoke and mirrors.

FWIW,

DayStar

opticsguy · Jul 10, 2013 - 6:20pm

Bees

I have flowers, tomatoes, squash, yes, and nothing is pollinated. I have an oregano plant in my courtyard that flowers every summer and there are hundreds of honey bees on it, the the exclusion of everything else. They also like the arugula when it went to seed. I'm trying the tiny paint brush on the tomatoes, but it hasn't worked well in the past.

There's a quarter section of land a block away that hasn't been farmed since the '50s (cotton), I guess, and it must be where these bees are coming from.

BorisG Charles S. Hamlin · Jul 10, 2013 - 6:21pm

German gold in Hong Kong

Yes, sort of - as a first step Lars Schall has emailed William Kaye to ask if he is prepared to talk more about this. 

Hunt brother · Jul 10, 2013 - 6:25pm

I asked this question on June 27 during Asian trading..

Hammering gold monkey or steam room guy? by Hunt brother

1 week 5 days ago

I am trying to decide who is more stupid....

a) the guy who went into the steam room at the gym today. The weather outside was 100 degrees and humid.

b) the guy who shorted gold at 1190 after the miners and silver bounced higher.

Update July 10, the more stupid guy was the gold shorting monkey.

What was his price target? When does he cover? 1300 , 1400 , 1600?

The chart was in downtrend. What a Dumbass!

achmachat · Jul 10, 2013 - 6:32pm

yay!

...Turd Ferguson, one of the most interesting voices in the gold industry!

https://www.youtube.com/watch?v=xeIVBeVAo54

Exbroker · Jul 10, 2013 - 6:33pm

Hey! How come I can silver at

Hey! How come I can sell silver at 10% over spot? Makes you wonder?

treefrog · Jul 10, 2013 - 6:34pm

pigatha having a bad hair day

down over a point in 24 hrs. oink!!!

Sad-descent · Jul 10, 2013 - 6:41pm

Re:Globex

I think the globex chart is displaying upside down...Havn't seen it go in this direction with intensity in forever.

Stock_Canines · Jul 10, 2013 - 6:45pm

I love

How I check Kitco and price is up 19.90 and in a few minutes all I need to do is hit refresh to see it drop 6 bucks. I imagine we will be sub 1260 by tomorrow at this time. Hard to believe gold was just shy of 1400 only 30 days ago.

Bollocks · Jul 10, 2013 - 6:48pm

achmachat

Nice one! el-turdo kept that quiet, eh!

Or maybe I missed some chat here?

Whatever, am listening to it now - it's sounding like a good interview smiley.



Charles S. Hamlin treefrog · Jul 10, 2013 - 6:50pm

@treefrog

....and I noticed that the 10-year yield has not changed much(2.62%) in the face of 1.71 point drop in the USD Index

We should have about a +$30 run up in gold with the drop in the dollar alone (2.4% drop in the dollar index)

Exbroker twippers · Jul 10, 2013 - 6:51pm

Santa

Santa needs to shut up. Ya...tell the enemy everything you are doing. What the hell is wrong with people?

Bollocks · Jul 10, 2013 - 6:51pm

1260 has been breached

Not getting excited about that, but it was a wall.

Seems to be rising pretty fast. What's going on?

· Jul 10, 2013 - 6:51pm

>>>SQUEEZE<<<

>>>SQUEEZE<<<

achmachat · Jul 10, 2013 - 6:54pm

no squeeze yet :-(

this is still the USD tanking... in other currencies, the metals are not moving.

That_1_Guy · Jul 10, 2013 - 6:55pm

Shennanigans...?

Hello All,

Been busy ...got some hot fires in the oven.... Received my monster. No Perths..dudes gone. :(

Great observation Turd.

Staggering on the Brinks withdraw acceleration, have been watching Barrick. I think they are somehow the lifelines to clearing houses in ...gold. Im keepin a lazy eye on it. Than Argentina mines cost them 40% net. Will they back stop the fed....comex...bullion bankers. Im putting the pieces together. They are cleaning house over there. Smells.... Add to that, they forward sold from Pasqua Lama.....which they dont have the right to explore...doh.

Meanwhile.......

In Dallas, Texas burglars were caught on camera breaking into the Law Offices of Schulman & Mathias last weekend, but what was taken has left many puzzled. The thieves left behind silver bars and video equipment, but rummaged through filing cabinets and stole three computers. The law firm represents two whistlblowers and Damon Mathias, managing partner at the business, believes that his clients may be the reason for the break-in. He explains.

Law firm defending high-profile whistleblower looted in Texas

The only question I have is why break in when you're already there....prism?

Back to presentations....

Guy

@katie rose - we were missing some bees and used a electric toothbrush touched to stem above flowers to buzz pollen..worked well for what we could reach. USE THE BACK, NOT THE BRISTLES. :)

Stock_Canines · Jul 10, 2013 - 6:56pm

Turd, C'mon

Up 14 bucks is a squeeze? After being down 140 bucks over the past 30 days? You know this will mean crap in the near future when Gold just gets butchered again. You said so yourself in your post this morning.

Exbroker Stock_Canines · Jul 10, 2013 - 6:58pm
redwood · Jul 10, 2013 - 6:59pm

>SWEEZE< on steroids.

>SWEEZE< on steroids. achmachat, if I recall correctly the dollar even though technically is not strongly correlated with metals, invariably goes down even with squeezes, unless I'm missing something.

Bollocks · Jul 10, 2013 - 6:59pm

Oh righto

squeeze then smiley

The great Jools Holland played keyboards in squeeze...

https://www.youtube.com/watch?v=NXD3dVIEn_k

Um... different kind of squeeze?

tmosley · Jul 10, 2013 - 7:02pm

Stock: You don't get it.  At

Stock:

You don't get it. At this point, pretty much ANY move up will cause a short squeeze because the short side is more crowded than it has ever been.

This was the basis for my "testable prediction time" posts last week. We wound up with the inconclusive case, if you are wondering. A short squeeze indicates business as usual will continue for some time. A continued plunge indicates a loss of faith in the pricing mechanism of the exchanges.

Exbroker TF · Jul 10, 2013 - 7:03pm

Squeeze

Maybe, but I think these asswipes don't care how low it goes. I think they want to put the producers out of biz. Then they will own the everything for pennies on the dollar. Just my opinion. Think....Rockafeller.

Stock_Canines · Jul 10, 2013 - 7:05pm

UP $30 IN THE AFTERHOURS  IS

UP $30 IN THE AFTERHOURS IS A SQUEEZE, in the short term.

Panic buying/covering by some very nervous shorts. It's obviously LOW volume but its a squeeze nonetheless. Will it have legs in London and NY tomorrow? We'll see.

Bollocks · Jul 10, 2013 - 7:05pm

Yes

Bugger-all happening in Sterling or the Euro. Achmachat is spot-on.

Exbroker TF · Jul 10, 2013 - 7:12pm

This is a game

Only the long term holders who don't trade win this war. Th asswipes love yankin your chain. Buy, and hold. 

Exbroker TF · Jul 10, 2013 - 7:12pm

This is a game

Only the long term holders who don't trade win this war. Th asswipes love yankin your chain. Buy, and hold. 

Holy_Crap · Jul 10, 2013 - 7:14pm

I dunno about the rest of you but, my hair is a bit on fire!

Haven't seen the Buck poop the bed like this in a long time!

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