Read This Now

Tue, Aug 30, 2011 - 4:21pm

No catchy title to this update. I just want you to read and ponder this post. Then, plan your trades accordingly.

Let's start with silver where the technical picture is more clear, at least in the traditional sense. Take a look at the chart below:

I've shown this chart several times in the past week so it should look familiar. Something new caught my eye today. Have you seen the new OI numbers? Our friend, "Tesla" has taken it upon himself to update the comments section with the latest numbers each afternoon. (Thanks, Tesla!) Keep in mind that the OI numbers are always basis the close yesterday. So, today's numbers show us the OI from Monday. That said, the number is once again amazingly low at 112,795 contracts. Again, as a reference, the OI in late April was approaching 150,000. Fully 20-25% more! Now stick with me on this. Maybe I should lay this out chronologically to make it easy to follow? OK, here goes:

1) Since silver bottomed around $34 in early July, the channel I've drawn has contained price.

2) Note that on two occasions, 7/13 and 8/19 (points 1 and 2 on the chart), silver decisively broke through the mid-line and proceeded to move sharply toward the top line.

3) Total OI on 7/13 was about 113,000 contracts. By the peak on 8/5, it had risen to about 119,000.

4) Total OI on 8/19 was nearly 116,000 contracts. At least week's peak, it had risen to nearly 122,000.

5) Today's OI is all the way back down below 113,000.

6) Look closely. Price once again sits poised to burst through the mid-line, which is near $42.

Conclusion: Watch price and OI very closely for the next 48 hours. IF silver accelerates through $42 on rising open interest, there is a very high likelihood that it is once again making a move toward the top of the channel. A move that corresponds in magnitude to the previous two would take silver to 45.50-46.00, perhaps as early as next week.

Now let's move on to gold. When I say it's not as "traditional" technically, it's because I'm using this crazy, reverse pennant as a forecasting tool. I'm not sure you're going to find the "reverse pennant" in any books about TA but I'm quite sure that none of those books ever anticipated the end of the dollar, either.

Similar to silver, gold currently sits very close to the midline of the pattern. Note that the previous two occasions when gold broke through the midline (mid July and early August), gold proceeded to ride the upper trendline for about two weeks before falling back. IF gold can once again break through the midline, it will likely charge toward the top line again. This would take the price to near $2000. The OI numbers in gold are similar to silver, too. After peaking at 532,000 last Monday, total OI as of yesterday is all the way back to 501,000. A drop of almost 6% in one week!

Conclusion: We may be on on the verge of another massive rally in gold. Your signal will first be a move through yesterday's high of 1841.50 and then a burst through the midline, currently in the area around 1850. Should gold move conclusively through 1850, it should move to new highs in relatively short order and then continue to make new highs through mid-September.

WARNING: Don't go getting overly excited and carried away at this moment. Nothing is pending until the metals break through those midlines. The open interest numbers suggest that the breakthroughs will come in the next 24-48 hours. They may not. If they don't, I will continue to monitor these charts until they do.

I feel that this is pretty important info so I plan to leave it up all night as the lead, above-the-fold story. I will probably leave it up tomorrow, too. Be sure to refresh the homepage from time to time if you're looking for updates as they will be attached as addenda to this post. TF


Sort of a bland trade this morning. The metals tried to rally overnight but they were beaten back at the regular, appointed hour of 3:00 am EDT. It appears, at this moment, that the metals will struggle to trade higher today. 1841.50 is still acting as a resistance point for gold and silver has yet to reach 42, yet alone 42.30. Let's just sit back and watch and see what the day brings us.

A couple of other things...First, this silver update from GoldCore via ZH is worth your time:

Second, a friendly reader sent me this chart of the open interest in silver since March. I have neither the time, inclination or technical know-how to superimpose the actual price of silver onto this chart. However, it would probably be a rather insightful thing to do. Anyone want to take a stab at it?

That's all for now. TF


This is certainly something to watch over the next hour or so.

About the Author

turd [at] tfmetalsreport [dot] com ()


argent rampant
Aug 31, 2011 - 4:03pm

You can say that again! What gives?

Something is going on as the

Submitted by Shill on August 31, 2011 - 2:52pm.

Something is going on as the dollar is in rocket mode.

Aug 31, 2011 - 4:05pm


I have been lurking on Turd's previous site for a while. So happy with this new and more improved site.

To be able to get all his input, all his charts as well as great chart interpretation, which is a gift in it self. I am not a trader obviously, but learning about it through this site. It doesn't surprise me at all that the Turd's city is growing. More people are looking for something real, something of substance. Here we get not just free advice, but we learn and share knowledge about things that are all interconnected not just with the metals, and the market. This is a wonderful site and you Turd are still my hero, even if you still have to cut your own lawn. I feel in a good company with all the gurus we have here to learn from.

I have been on a emotional roller coster for the past couple of days. Now I am just staying still, patiently waiting for Friday. "Samastiki" waiting in stillness

My son came across few very interesting articles, but he doesn't post, so I will do it for him

argent rampant
Aug 31, 2011 - 4:09pm

POSX chart

Then again, when viewing a longer term chart, it's bouncing off a prior support at about 73.50.

R man J
Aug 31, 2011 - 4:11pm

Physical with Dollar Cost Averaging

Built my stack between 2006-2011. With no dry powder left, I began buying physical every two weeks since may 1, 2011.

My stack built the last 4 months between May 1 and August 31 has a annualized return over 50%. This is in the midst of the summer doldrums. There are companies such as James Turk's Gold Money and SilverSaver that allow regular contributions and physical delivery. Highly recommended.

Dr G
Aug 31, 2011 - 4:11pm

"they" know the jobs numbers

"they" know the jobs numbers won't be great (so they will inflate them a tad). They know that Obama doesn't have a jobs plan, just a rah-rah speech. They know that the POSX is flirting with diaster and needs a boost. So they boost it, not unlike the plunge protection team. Dollar in rocket mode rarely makes sense. Even in rocket mode it toys with low resistance levels.

= The Fed

Aug 31, 2011 - 4:15pm


Hey Shill,

Hats off to you on your call options! What options are you using? Miners? I don't trade miners since I look for large open interest. As of close today I am up on my SLV Call options, but down on my GLD Put/Call options. I will accumulate SLV on dips as we move into fall. Considering how volatile gold is becoming in the short term, I am going to try something new for me: a strangle position. Since I don't know which way gold is headed in the short term - I expected a sizeable correction - I am going to see if I can work the volatility in my favor. Any thoughts?



Dr G R man J
Aug 31, 2011 - 4:16pm

R man J, thanks for the post.

R man J, thanks for the post. I follow a similar stacking path, although I buy nearly every day. It probably averages out to 4 times a week. Sometimes I buy small (only 10 oz today), sometimes large, but I'm always amazed at how the stack adds up over time. My goal is that I can leave the profits (or something that will be a valued asset in the future) with my children as our system "resets".

If none of that works out, I can honestly say that I've had a blast thus far adding to the stack. Fun to watch, fun to talk about, fun to meet other stackers--just an all-around blast, regardless of how frustrated the spot price makes me. Just had our 4th child on Sunday, which makes me even more motivated to do something for my children. Other than being a good father in the present, I hope to be able to pass on a little surprise to them as a result of my stacking. I know that many others here are in different phases of life but in the same boat.

I firmly believe that our posterity will cherish our names, in part because of what we are doing right now in helping to secure our futures.

Aug 31, 2011 - 4:23pm

Step right up folks, get yer golden ETF right here...

"Main gold is getting a 15 minute hype on CNBS right now. Talking about HSBC and all of the Gold in the GLD. Is that Tungsten?"

Sevin - funny you say that about CNBS, not the tungsten part but the hype on gold, HSBC, etc. I walked into my office three times today, several hours apart each time and it seems like each time I came in CNBS was talking up gold, mostly ETF's... GLD in particular. Have they been "advised" to send the sheeple to the slaughterhouse? Hmmm...

The HSBC vault shots of school bus sized stacks of gold bars on palettes, my thought was not Tungsten but instead, the shots looked old and staged for PR (proof we actually have it) purposes. They would let the shill go down in the mine but not in the vault (maybe he did but I didn't see it in the clip you were referring to).

TheGoodDoctor Much4Him
Aug 31, 2011 - 4:24pm

Wynter Benton posts yet again

Wynter Benton posts yet again today. Twice.

Our main purpose is to defend $36 and detonate the derivative bomb that will send silver well over $80 by the end of the year. Perhaps even to $120 before all is said and done.

And just to make sure silver doesnt go below $36, we will be holding contracts for delivery throughout september and will hold these contracts as hostages in case The Morgue decides to get cute with the price.

I.e., if silver is under $40 then we will demand physical delivery and not take the cash premiums that is so generously offered. If silver is above $50, then of course we would be happy to sell these same contracts for a hefty profit (plus those hefty premiums as a cherry on top). It's your call, Blythe, but either way....

You're going home in a body bag, do da, do da......

bemoosed Nick Elway
Aug 31, 2011 - 4:25pm

Re: Can one demand physical by "standing for delivery"?

Interesting point, Nick. I'm sure I don't know, and have no evidence to the contrary, but perhaps if WB represents an Authorized Participant as per the SLV prospectus, then they could simply redeem the baskets of SLV shares received for physical. Then, if according to the rules of the prospectus some way were found to not deliver the silver - some emergency declaration or force majeure, say - perhaps the CFTC rule you quote would not apply, as the case could be made that the SLV shares did not in fact represent physical silver. May be messy. Also, if SLV shares could somehow be used as a get-out-of-jail-at-face-value card for the naked shorters, that would be inconsistent with the persistent rumors of generous cash settlements for those who stand - which are indeed just rumors to little guys like me. All very curious...

Aug 31, 2011 - 4:48pm

Debtor vs Saver

Hey Turdites,

As I was doing my daily web surfing I came across an article in FOFOA: Though it's a year old, it speaks to us (this community) more than ever as we near the end of the Keynesian experiment.

The debtor class (bankers, easy money gang, politicians) are facing their Swan Song and they are doing everything in their power to keep the status quo going. Evidence of keeping this failed experiment alive is the amount of money being pumped out by the Fed over the past three years via TARP, ZIRP, QE1, QE2, etc. This will end in short order (I would be utterly shocked if the TPTB can keep this ship sailing past 2012) and the savers will be in control (at least I can dream).

Which class are you in? Debtor or Saver?

Happy Shtaqing,


Dark Matter Chicken Little
Aug 31, 2011 - 4:54pm

Really interesting

Stocks (S&P 500) are worse than Cash (6-month CD)?

WOW. Didn't expect that.

Aug 31, 2011 - 5:01pm

I'm one of the dumb ones.

I'm one of the dumb ones. Saver.

Eric Original ScottJ
Aug 31, 2011 - 5:01pm

ScottJ LOL


Aug 31, 2011 - 5:03pm
tmosley DefiniteMaybe
Aug 31, 2011 - 5:16pm

@DefiniteMaybe: That is my


That is my absolute favorite FOFOA article. I would encourage EVERYONE to read it.

cpnscarlet TheGoodDoctor
Aug 31, 2011 - 5:22pm

@TheGoodDoctor - So, Celente

@TheGoodDoctor - So, Celente is Italian and gets quite animated...

So what are you saying about me and the other Italians? We're animated? Like Bugs Bunny? So we make you laugh like some f**kin cartoon, eh? So you think we're funny? What do you think I am? Some sort a clown maybe? Is that what you're calling me? A Clown!!??? You think that's funny?? Let me show you want I think is funny. Your brains all over the table....

"Goodfellas" tape just started rolling and I couldn't stop it.

No offense taken.

Aug 31, 2011 - 5:25pm

Summary of Gold's movements in August>>>up 12%

Metals Stocks Archives | Email alerts

Aug. 31, 2011, 2:47 p.m. EDT

Gold ends higher, gains 12% in August

Metal notches best month since November 2009

By cassis[at]marketwatch[dot]com (Claudia Assis) and coliver[at]marketwatch[dot]com (Chris Oliver), MarketWatch

SAN FRANCISCO (MarketWatch) — Gold futures edged higher Wednesday to gain 12% in August, their best monthly performance since November 2009.

Gold for December delivery /quotes/zigman/661658 GC1Z -0.15% added $1.90, or 0.1%, to trade at $1,831.70 on the Comex division of the New York Mercantile Exchange.

Gold rose $201, or 12%, in August. The metal rose to a record $1,891.90 an ounce settlement Aug. 22 but two days later dropped nearly 6%, its worst one-day performance since March 2008.

Since that trough, however, gold moved incrementally higher, including a $38.20, or 2.1%, rally to $1,829.80 an ounce in New York on Tuesday. See report on Tuesday’s gold trading.

Demand for physical gold is strong in Asia and Europe, but the metal is likely to remain rangebound and trading choppy for the next few days, said Bernard Sin, head of currency and metals trading at MKS Finance in Geneva.

“There’s upside potential as we are going into buying season in India,” he said, referring to upcoming Hindu holidays when buying gold is considered particularly auspicious. India and China are the world’s top gold consumers, with gold buying enmeshed with long-standing traditions.

Gold has also recently drawn interest from nontraditional buyers such as hedge funds and wealthy individuals, which has made it difficult to assess price direction, said Sunil Kashyap, managing director at Scotia Capital in Hong Kong.

“Any level below $1,800 per ounce should see some buying because when prices went to $1,900, many investors were on the sidelines,” said Kashyap.

Meanwhile, China’s bullion-accumulation program was in the spotlight Wednesday after a People’s Bank of China adviser told the China Business News that Beijing should increase holdings of gold and other commodities.

“China should realize that gold is an important strategic reserve, and should increase its holdings over the long term, buying on price dips,” adviser Xia Bin said, according to a Dow Jones Newswires report. “In the past we have not established this as an investment principle, but now we...(cont.)

Aug 31, 2011 - 5:25pm

This place is a treasure trove!

I just discovered through reading this thread that a whole lot of other threads exist! :) Single mindedness can be a back biter to me, so I appreciate all the help so many of you offer by pointing to the other "doors". Thank you, & I don't need to be told twice. Best to you.

Aug 31, 2011 - 5:32pm

The OBAMADRAMA Continues!

It just gets more and more hilarious!

As you know, Since My First Post:

And Continuing With My Second Post:

I've been trying to outline when events might happen between now and Sept. 21 to provide an educated guess on the effects on the metals.

Now, The Manchild has painted himself into a corner by trying to schedule his speech on the same day as the Republican debate Wednesday, Sept. 7th. Because he knows his speech will generate a lot of criticism and objection, The Manchild is obviously trying to reduce the amount of available time the candidates have to discuss his so-called, "plan".


"Would the White House really schedule such a major address intentionally to overshadow the Republicans seeking Obama's job? "Of course not," Carney said."<--HAHAHAHA

Boehner has since asked him to move the speech to Thursday, Sept. 8th. It's so funny how timid and out of touch The Manchild appears on this one!

As expected, this will probably be the most important speech to ever make or break a president since the famous Carter Malaise Speech. It's going to be very funny to watch.

Additionally, The Manchild is expected to deliver a bunch of spending plans he calls "investments" that have nothing to do with real job growth or economic recovery and tax increases along with one new one I just read about today: A VAT TAX of maybe 5%!

UNREAL! --->

Patrick Heller writes:

"Look for the politicians in Washington to propose a national sales or value added tax, perhaps for about 5%. This has been gathering behind the scenes support for at least a few months. It might even be included in President Obama’s address next week. The threat of the adoption of any such tax would further devastate already-slumping consumption. Jobs and production make consumption possible, so these are what need to be stimulated in order to increase prosperity. Still, it is curious that many politicians like to talk about rising consumer demand as somehow being responsible for the creation of jobs and production—and many of these very same politicians are now threatening to crimp consumer demand!"

Stay Tuned for more Whitehouse Insanity!

Aug 31, 2011 - 5:34pm

When the Wildebeests panic...

If some of you newcomers plan on investing in silver, you should really subscribe to Ted Butler's newsletter. The cost is low, the value high. This is a clip of his latest report:

"In silver, there are great numbers of industrial users throughout the world, who are like a vast herd of wildebeests grazing on an African plain. The wildebeests will panic at the first scent of lions. The scent that will cause the silver industrial users to panic will be sharply higher price along with delays in receiving silver deliveries. A commercial short covering on the COMEX will certainly increase prices, just as it has in gold and previously in silver. But given the consistently tight signals emanating from the wholesale physical silver market, it will take little to set off a scramble for physical material which will cause delays to industrial users. As the first few silver industrial users panic and buy physical inventory to insure continued production, this will further tighten supply lines and exacerbate delays in deliveries, thereby inflaming additional user buying. It’s impossible to say when such a process will start in silver, but we surely are closer to that than ever before. This is more a case of inevitability than it is of timing. It will come when it is least expected, but it will come.

It is lamentable that real liquidity seems to be dying on the COMEX, but that is of secondary importance to long term silver investors. Of more importance is that the death of liquidity will likely also signal the death of the ongoing silver manipulation. That’s because liquidity and manipulation are rooted in the big commercial shorts on the COMEX. If there is one thing that could put the price of silver to the stars, it would be the end of the silver manipulation."

Butler Research LLC. | precious metals and other markets

Eric Original terri5125
Aug 31, 2011 - 5:40pm


I bought the Dec 14's on Monday morning because I thought the selling in AUQ was ridiculous on the NXG buyout deal. Unfortunately it got even more ridiculous by Monday afternoon, and thus I'm underwater on my calls. But I think both the stock and the calls have held reasonably steady since then. I have to believe the selling is done now. Anyone with any thoughts of selling AUQ already did so on Monday, so I'm very very positive on both the stock and the calls going forward from here.

Which calls to buy? I still like my Dec 14's. I just wish I had waited a few hours and gotten them cheaper. The 12's, 13's, and 14's all have decent open interest, so just pick one. If you want to go out to 2012, then it looks like the March 13's or the 15's have the highest open interest so I'd maybe go there.

EDIT: Let me put it this way: I liked the Dec 14's at $1.00. I LOVE them at .65! I'd buy more except I'm supposed to be "disciplined" and not average down into a losing position just because I read that from some silly guru somewhere. You don't have that problem. To you, those calls are simply "on sale".

Aug 31, 2011 - 5:43pm

@ScottJ Re: The Rabbit Hole

Speaking to the gestalt of this whole "corrupt" modern experience and the cultural & cognitive "awakening" that needs to happen in order for us to even WAKE UP to this "twilight zone", this video is great:

The Story of Your Enslavement
Aug 31, 2011 - 5:48pm

USD Devaluation is the OFFICIAL Policy

Big-name economist finally admits that USD debasement devaluation is the official policy of the Fed, but denies that it will lead to inflation. Not funny, Marty.

Martin Fieldstein wrote: "The dollar could continue to fall at the 10 percent rate of the past twelve months or even faster . ...
The other adverse effect of a lower dollar is to create inflationary pressure. Again, the effect is relatively small. A 10 percent annual fall of the dollar would raise the price level and the rate of inflation by less than 2 percent. Given the state of the labor market, this would only affect the price level and would not be the beginning of a price- wage spiral."

Full article here:

>= 10% devaluation rate a year, for cow's sake!

Aug 31, 2011 - 5:51pm

Lays out what CA and myself have been getting at

The Fed. will in essence become maybe not the biggest landlord per se' but definitely the biggest recipient of any mortgages created by themselves that they are going to backstop on a massive scale, regardless of gigantic paper losses or the amount that they need to print to make this all happen.

They'll spin some of this off to quasi-private companies but it will be the Fed. through the banks that will reap the benefit (payments). Get ready for the opportunity of a lifetime imo for real estate.

Late this fall or early next year, just in time for OB's re-election campaign (gag!).

Dr G
Aug 31, 2011 - 5:58pm

The problem I have with the

The problem I have with the "final warning" re: silver is that we get that warning (it seems like) every 2 weeks. This is the week the Comex will bust. This is the week the Asian buyers will step up. This is the week there will be no more physical.

Yeah, well, silver sure likes to pick it's nose a lot. That isn't to say it hasn't made nice gains this year, because it has, but most of the time it makes me yawn.

Will the Crimex go bust someday? I think so, but it honestly could be 5 or 10 years from now. I can get lots of physical silver everywhere I look. I have 5 online dealers I enjoy purchasing from. I can buy today and have it at my door on Saturday.

My local shops (three of them) have lots of silver. One guy has BAGS and BAGS of junk silver. He has over 50 100oz bars. The other shop has monsterboxes of silver that he can't move. Nothing exotic at these stores, but lots of bars and Phils and Eagles and Maples and even Pandas that are sealed. Morgans and Peace dollars are plentiful (both numismatic ones, slabbed ones, and others for $1.00 over spot).

Will there be a shortage? Yes. Tomorrow? Hardly. Will there be big moves this Fall in silver? Yes. Will it be too late to get aboard the train? No.

(and I'm well aware that when the shortage does hit I'll be complaining then that I can't get silver. I know, I need patience. Just ask my wife)

The Death Ceiling
Aug 31, 2011 - 5:59pm


Yeah, I've been keeping an eye on the post read numbers too, as I imagine many of us have, as a further rough guage of public awareness.

Of course Turd has updated this post twice which I imagine skews the numbers a little bit, I guess many of us have 'read' that post 3 times now.

Turd, may I ask, how are the 'reads' numbers calculated? Is it unique visits, or simply page views?

Dr G
Aug 31, 2011 - 6:03pm

Did Shill (a likely

Did Shill (a likely candidate) or somebody else already link to this?

"Subprime Mortage Bonds get AAA rating from S&P, US Treasuries Do Not"

Aug 31, 2011 - 6:07pm

Here is a silver institute

Here is a silver institute update. It's just a nice reminder there is a growing industrial side to silver. You can sign up to receive their latest news releases. No big news here, well except for maybe the comments on the HKMEx.

Aug 31, 2011 - 6:14pm

@hardrain - DGR

Sorry for the tardy response - have been out most of the day. About the DGR; I started with a ratio of both metals (10:1 Ag:Au). I tend to analyze the Dow and can wager where I think it will be going on a short term, in essence I use the Dow as a barometer. It gravitates to a 1:1 ratio (lower DGR = expensive gold of course).. When the DGR drops below say 6, I start looking for exchange opportunities - usually then based on a GSR (low Dow pulls are usually not long lived, and a simple rule :the higher the spike, the shorter the duration). I exchange Au for Ag. On the lows I pick a point based on data (I use CoT, OI, Dow to Gold, and sometimes even involve oil prices, S&P to Gold ratio, contract expiry dates, etc), then I rotate back and exchange in reverse. I have a broker locally that I exchange directly with. By playing the GSR exchange I do not pay capital gains tax because all transactions are exchanges (Eagles), fiat currency is never involved. I am either exchanging gold for silver, or vice-versa.

This past April, instead of selling silver on the highs or buying it on the lows - I was exchanging it for gold (the GSR was in the 32 range). Then in June I purchased silver out right on the spot low. In Aug I exchanged much of my gold (less the fractionals) for silver. As you can see I am heavy silver - so you know where my anticipation lies.

I also buy fractional gold and ASE's by quantity online during a low, and sell them local when we hit what I see to be tops (I recover all premiums). I order online when I see lows based on the same data above. Between the two strategies I have been able to exponentially increase my actual keep pile. But playing the GSR has been especially kind to me. I will warn it is not for everyone, (analogous to a surfer waiting for the big storm for large waves to ride) and is just as risky as options or any other type of speculation.

It's a simple strategy, and not as complex as TA, but I go with it because it's a niche. Paper just doesn't do it for me, I need the real thing (yeah that was pun).


Donate Shop

Get Your Subscriber Benefits

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

Key Economic Events Week of 5/20

5/20 7:00 pm ET CGP speech
5/21 10:00 ET Existing Home Sales
5/22 2:00 ET FOMC minutes
5/23 9:45 ET Markit PMIs
5/24 8:30 ET Durable Goods

Key Economic Events Week of 5/13

TWELVE Goon speeches through the week
5/14 8:30 ET Import Price Index
5/15 8:30 ET Retail Sales and Empire State Manu. Idx.
5/15 9:15 ET Cap. Ute. and Ind. Prod.
5/15 10:00 ET Business Inventories
5/16 10:00 ET Housing Starts and Philly Fed
5/17 10:00 ET Consumer Sentiment

Key Economic Events Week of 5/6

5/9 8:30 ET US Trade Deficit
5/9 8:30 ET Producer Price Index (PPI)
5/9 10:00 ET Wholesale Inventories
5/10 8:30 ET Consumer Price Index (CPI)

Recent Comments

by zenharmonics, 31 min 44 sec ago
by RickshawETF, 1 hour 15 min ago
by Blankone, 3 hours 12 min ago
by Turd Ferguson, 3 hours 19 min ago
by lakedweller2, 4 hours 23 min ago