Gold and Silver Fun and Games

Wed, May 23, 2012 - 4:00pm

This is just getting to be far too predictable.

Let's see, first it was the April12 gold. Then it was the May12 silver. Today it was the June12 gold. What do I mean? Today was, once again, one day prior to option expiration and today, once again, we get a round trip in the metal as the poor losers who are left trading and hedging get their arses handed to them by the controlling powers of The Cartel.

As a refresher, what we saw in March and April, we saw again today. Namely, the handful of poor saps who had sold put options on the front month, thinking they had free money (Wouldn't you have thought that selling the June 1550 put looked like a safe bet back in February? Heck, maybe even late last week?) Lo and behold late yesterday, with just two days left before expiration, gold gets smoked on the Globex and is driven below its 10-day MA. WOPR selling ensues and before you know it, gold is near 1550 and headed lower. YOU, the poor sap that is short 100 June puts, have no other option but to sell short 100 June12 contracts, just to hedge yourself. Your selling (and everyone else caught in the same vise) sends gold even lower, toward 1535. All of this selling is gladly soaked up by The Cartel until...snap, boom, bang...they spring the latch on the trap and begin rallying gold back higher. Your new short hedge is suddenly squeezed and you eventually cover. This is particularly likely once price rallies back through and above that personally dangerous 1550 level. With gold back at 1560, you are now left with your original 100 naked puts that will expire worthless at 1:30 tomorrow as scheduled, however, you were just lightened of some considerable funds by the coercive, manipulative power of The Gold Cartel. Wash, rinse and repeat next month in July silver if prices continue down at these levels.

The selling of yesterday and today has established the basing/trading ranges that we began to discuss here yesterday. See this for a refresher: Of that post, this line in particular is the most relevant:

"Now, please don't misunderstand what I'm telling you here. I'm still extremely excited about where the metals are headed, particularly silver. The ranges I've described above are for the short term, maybe the next week or two and into early June."

Here are your charts that show these new ranges:

Here are some other nuggets that I've picked up as I've gone through the day. First, Jesse had this little ditty about KosherDakota who, as you know, is one my favorite Fed douchebags. This guy is a complete clown. Anyway, the speech Jesse references is not the first time KD has muttered this current bit of nonsense. I actually saw a headline on ZH about a week ago where this buffoon said the same thing that he said today. I was going to write about it at the time but by the time I doubled back to C&P it, the ticker had moved on. At any rate, enjoy the nonsense.

Trader Dan has a good comment today on commodities, in general. He also made an appearance on KWN. I highly recommend both: &

If you haven't yet, you should speed through this. I often listen to Coast-to-Coast as I'm shuttling LT#1 back and forth to ballet class. I caught part of this episode the other night. The stuff with Peter Schiff is definitely pertinent and well worth your time.

Video unavailable

And this is interesting. With the FB/silver spread now at just $4 or so, can the closure of the latest Hat Contest be very far away?

Have a great evening! TF

About the Author

turd [at] tfmetalsreport [dot] com ()


May 24, 2012 - 11:21am


bought 20 tons of in past 2 mos. 18 tons. 32 tons in 2012. Why are they not listening to Buffett?!

Expand 7m

Who is selling ?

Expand 3m

Well, London Bullion Market Association gangsta banks can sell "unallocated" gold out from under unsuspecting "owners" all day

Hide conversation
May 24, 2012 - 11:25am

stack - An orderly pile, especially one arranged in layers.

Price is not a determining factor in central bank buying rather they are more likely being guided to secure an allocation of a percentage of their overall foreign exchange reserves into gold bullion.

Big Buffalo
May 24, 2012 - 11:26am

Nice bonus

One of my AU Walking Liberty Half coins, recently purchased is a 1936-D. Currently, there's a coin on Ebay that looks in very much the same condition at $116.49 with 9 hours left in bidding. We'll see what it actually goes for.

Either way, I spent $18.50 for this thing.

Also, found a 1947-D Walking Liberty Half, Similar condition and it went for $45.17.

May 24, 2012 - 11:27am

Je suis Français....en

Je suis Français....en regardant les cours du GOLD and SILVER, en ce jour d'échéance d'option....ce pourrait-il que JP MORGAN et ses ALLIES soient à cours de MUNITIONS !!!!!! THANK YOU Mr FERGUSON pour l'énorme travail que vous faite ......... Cordialement

May 24, 2012 - 11:27am


This -> Real federal deficit dwarfs official tally

and this -> Australian Becomes World’s Richest Woman, Mag Says

May 24, 2012 - 11:34am

A good reason to NOT make ignored users invisible

On more than one occasion I discovered I'd inadvertently put somebody on my 'ignore user' list when I meant to do no such thing.

I only discovered this when I saw the warning "so-and-so is on your ignore user list" on one of their posts.

Since I don't place anybody on my IU list I knew it was a screw-up and fixed it. Had their posts been hidden from me, it would have been a long time before I discovered it.

I don't know, I guess some people feel the need to ignore others opinions to get them out of the way, but for me ignoring somebody I disagree with or who pisses me off is a sign of weakness. If somebody is REALLY getting under my skin, and that is rare, I just skip their posts.

Why so serious? It's okay to have your beliefs challenged.

thurd aye
May 24, 2012 - 11:58am

It may be egotistical to do this

I don't know, hope not,but Repost....

The Future. Just have a little disagreement about this. Xty says no-one can predict the future.BePrepared says the future is just that. Ok,that is fine as far as it goes.

There are ,however,alternatives that may be included in one's thoughts on this subject.

You are in the present. You receive information from an analyst,who has a source.That's two steps into the future for you.You act / or not ,on that information.

Or, they are in the present,therefore you are living in the past,until you catch up-to- speed.

So,each of us has a different time space from where we act,according to our knowledge of the moment.

Someone tells you that gold is about to explode.You buy all you can afford,gold then rockets to $5000 just afterward. Are you saying that all this happened in the present?

You have seen a future ,or have believed what you brought into your life by a future unknown that is now known.

These sequential events are time related.Call it present ,future or past,but future is affecting the present for sure, as past affects the present and the future.

Just another take on it. ;o))

pbfurn Orange
May 24, 2012 - 12:00pm

@ Orange?Pro Trader's Question

A for Effort

P for Persistence

0 for Results

May 24, 2012 - 12:21pm

Time to revisit

Time to revisit competing currencies around the world, question is who this time has the gonads to stand up against the banksters and make it happen, or have we devolved to the point where currencies have not choice but to come and go competing by default? and where is the peoples misery likely to boil over beyond containment? I would guess Washington DC will be one of the hot spots, as the level of taxpayer entitlement rises beyond the comprehension of managed misery. Someone said today, that telling folks that the debt is the problem is the wrong message to win a presidential election, maybe so, though pealing back the onion layer by layer, what we find is slavery. That could be the message to win the people so they understand what the magnitude of their debt means to their life. DEBT=SLAVERY no matter how you peal the onion and SLAVERY is a word that most of human kind understands very well.

May 24, 2012 - 12:25pm


I logged on to my Provident account to purchase more ASEs and see that they are listed as 'Delayed' stating "The recent surge in demand has left some of our products with a "Delayed" status". I have never seen this before at Provident. How much longer can silver stay in the 20s?

S Roche
May 24, 2012 - 12:27pm
LaMachinna ¤
May 24, 2012 - 12:51pm


Most excellent IS7 - keep rockin'.

May 24, 2012 - 12:58pm


is that an inverted head and shoulders i see forming in the one hour spot silver chart at netdania?

... a little clearer on the 30 min. time frame.

May 24, 2012 - 1:13pm

Commodities Rise Despite Dismal Chinese, Eurozone PMIs - Why?

Risk appetite trends appear to be shrugging off softer Chinese and Eurozone PMI figures, with European shares on the upswing and growth-geared crude oil and copper prices following suit. Meanwhile, waning haven demand is pressuring the US Dollar, allowing an upside correction for anti-fiat gold and silver prices. S&P 500 stock index futures have erased earlier losses and now trade firmly in positive territory ahead of the opening bell on Wall Street, reinforcing the likelihood of a recovery across the sentiment landscape as North America comes online.

While the chipper mood is undoubtedly running counter to economic data, recent price action offers context to explain what may be happening. Risky assets have faced unrelenting selling pressure over the past three weeks with very little corrective recovery in the interim. With the EU leaders’ summit in the rearview mirror and growth indicators reinforcing the seriousness of already well-known headwinds facing global output from the Eurozone and China, the supply of near-term negativity that can conceivably strike the markets may be running dry. Broadly speaking, this opens the door for a corrective recovery until the bears find fresh fodder to fuel downward momentum as the second Greek election approaches in mid-June.

The US economic calendar appears broadly supportive of an improving risk appetite profile. Durable Goods Orders are expected to rise in April after a sharp dip in March, the Kansas City Fed manufacturing activity index is forecast to rise in May after two consecutive months of losses, and weekly Jobless Claims numbers are set to yield a modest but broadly positive result. While Initial Claims are expected to hold at 370K for a second week, Continuing Claims are due to edge lower to 3250K.

WTI Crude Oil (NY Close): $89.90 // -1.95 // -2.12%

Prices continue to test resistance-turned-support at 90.49, with a break lower initially exposing the 61.8% Fibonacci retracement level at 88.54. Near-term resistance lines up at 92.51, a former support marked by the December 16 low, with a push above that targeting the February 2 low at 95.41.

Daily Chart - Created Using FXCM Marketscope 2.0

Spot Gold (NY Close): $1561.45 // -7.05 // -0.45%

Prices recoiled from resistance marked by the 1600/oz figure as well as the 50% Fibonacci retracement level at 1599.17, taking out support at 1582.10 marked by the 38.2% level and exposing the next downside objective at 1560.98. A break below this boundary exposes the 1522.50-1532.45 area. The 1582.10 level is acting as resistance.

Daily Chart - Created Using FXCM Marketscope 2.0

Spot Silver (NY Close): $28.18 // -0.29 // -1.00%

Prices are reversing lower from resistance at 28.70, with sellers once again aiming to challenge support at support at 27.06. A break lower exposes the 26.05-15 area. Alternatively, a reversal back through resistance on a daily closing basis targets the next upside barrier at 28.70.

Daily Chart - Created Using FXCM Marketscope 2.0

COMEX E-Mini Copper (NY Close): $3.396 // -0.092 // -2.64%

Prices are testing through support at 3.438, the 100%Fibonacci expansion, with a break below that exposing the 123.6% level at 3.327. Near-term resistance lines up at 3.537, the 76.4% expansion level.

Daily Chart - Created Using FXCM Marketscope 2.0

--- Written by Ilya Spivak, Currency Strategist for

May 24, 2012 - 1:15pm

The CME's Daily Delivery Report

The CME's Daily Delivery Report showed that 1 gold and 27 silver contracts were posted for delivery tomorrow. The link to what little action there was, is here.

After a big withdrawal on Tuesday, the GLD ETF had an authorized participant add 87,364 troy ounces of gold yesterday. There were no reported changes in SLV once again.

The U.S. Mint had a smallish sales report yesterday. They sold 2,000 ounces of gold eagles and 100,000 silver eagles.

The Comex-approved warehouses finally updated their Monday depository numbers for silver...and the net amount was about 114,000 ounces added. Then later on Wednesday they stuck in the Tuesday update as well. On that day the Comex-approved depositories received 13,894 troy ounces of silver...and reported shipping 745,297 ounces out the door. The link to the report is here.

By Ed Steer Gold & Silver Daily

May 24, 2012 - 1:16pm

Courtesy of Ed Steer Ted Bytker

Silver analyst Ted Butler posted his mid-week commentary on his website yesterday...and here are two free paragraphs...

"The price action this week has been horrid. It is horrid because the crooked commercials on the COMEX have made it horrid. There is no legitimate economic justification for the price decline since Feb 28th other than the price action was created to permit the commercials every opportunity to scare and induce others into selling COMEX contracts so that the commercials could buy. Almost every day the price of silver and gold seem to be put lower in thin overnight trading. Almost every day we start out “in the hole” where it is a struggle to get back to unchanged. This is not accidental, it is a deliberate plan to demoralize and keep silver investors confused. It is shameful that the CFTC has been captured by the crooks and is content to look away."

"The good news is that the commercials have succeeded in buying record amounts of silver (and gold) contracts. It’s impossible to pick the timing of the next rally, as we are in a sort of “no man’s land” currently, where technical type buying won’t come in until the moving averages are penetrated to the upside. There still doesn’t appear to be much speculative selling remaining in silver and gold after the orchestrated take down of the past couple of months, but neither is there any impetus for technical buying below the moving averages. In this environment, it’s not hard for the commercials and HFT practitioners to put prices sharply lower at will. About the only sane reaction to all this is to accumulate and hold physical silver for the long haul, as the short term manipulative games won’t last forever."

Here's a chart that Washington state reader S.A. sent me yesterday. It's titled "European Exposure". The imbedded preamble pretty much describes the situation.

Here's a chart that reader 'David in California' stole from somewhere yesterday. It shows that a gigantic pennant pattern has been formed in gold. Is a big up-move just ahead? Let's hope so.

May 24, 2012 - 1:19pm


I Think About JP Morgan's Trading Loss The Same Way I Think About Cockroaches

Fusion IQ CEO Barry Ritholtz told Yahoo! Finance's Matt Nesto that he believed the unstable nature of JP Morgan's $2 billion-plus made the stock an uncertain investment in the future.

Ritholtz said his firm loaded up on JP Morgan early in the year because it was the "best house in a not great neighborhood." Although he was happy with the stock's rally earlier in the year, Ritholtz said he pared back on his JPM position when the stock fell after the bank disclosed its trading loss and now owns about 1% of the company.

"The question is, 'Is this $2 bill loss going to be $3 billion, $4 billion, or $5 billion?' I don't know. The lesson we learn about cockroaches is that there's never just one," he said.

He added that the type of bets and risk the bank took on with exotic products such as derivatives made the industry hard to understand and invest in.

"The reason to own banks is that they used to be a safe, money making machine," he said. "The old joke was 'borrow at 3%, lend at 6%, be on the golf course at 4 o'clock.' That's how bankers lived. It was a boring, highly profitable business. And now, these banks seem to think they're hedge funds."

Posted on

The link is here.

May 24, 2012 - 1:20pm

Euro Zone Crisis

Euro Zone Crisis Boils as Leaders Argue, Failing at Pact

With Greece’s membership in the euro zone teetering, fears of bank insolvency rising and Europe’s leaders bickering about what to do, the euro crisis is once again intensifying and threatening to undermine fragile growth globally.

At a summit meeting in Brussels on Wednesday, regional leaders failed to signal any significant new steps to stimulate the sputtering regional economy or resolve the competing agendas of President François Hollande of France, who favors stronger action to spur growth, and his German counterpart, Chancellor Angela Merkel, who has opposed aggressive moves to ease the pressure on Europe’s weakest economies.

Yet, the urgency for a solution to the region’s debt crisis, now in its third year, may never have been greater.

Posted on The New York Times website

The link is here.

May 24, 2012 - 1:28pm

Would somebody please remind the US Peso that its dead!

It keeps trying to rise.. Too bad the big drop the last 2 hours.. they have to do their thing..

Look at them paint the tape! now gold is below yesterdays close

May 24, 2012 - 1:31pm

@thurd aye

Of course you can see the future, if you're smart enough and lucky enough and look hard enough. Otherwise what's the point of all this? You just can't be sure you're right.

May 24, 2012 - 1:44pm

New Thread

New Thread

RaRaRasputin icar
May 24, 2012 - 1:56pm


Espérons que vous avez raison!


May 24, 2012 - 9:19pm

So why don't the idiots

trading the paper, wake up and buy the real stuff. It is not subject to the monthly raids when you have it in hand. Buy what you can afford, when that happens, their will be no more left for them to trade. I know the wealthy have created a market that they can control. If their is no entity on the other side of the trade, their is no market. Instead of trying to make a few bucks trying beat them at their house game, invest the money in the real stuff. After that, the real market will start shining.

Let the market makers start playing with themselves and see how far they come.

May 25, 2012 - 1:17am

@Porky - Turd Nailed It

@Porky wrote - You know Turd, I sat there yesterday thinking the same thing (ish)...and today was even worse. The naked affrontery of it it all. Bare faced larceny. It is incredible to behold. Perhaps I am late to the party but I have now concluded these are not markets which can be traded. Doh!! Finally I hear you all shout. Nonetheless I still have a position in the red and so will be trying to trade out. Not sure why you'd say that. These markets are eminently day-tradable. $27 move down and $10 move up? Divergence signals work marvelously - IF you're willing to trade both sides of the market. If you can only trade long, then I guess it's difficult for you. Trading with the trend - i.e., down - is the name of the game for right now. When we're back in an uptrend (later this year, or perhaps even next year), then trading with the trend on the long side will be the easy thing to do, just like it was in 2010 and 2011.


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Key Economic Events Week of 4/15

4/16 9:15 ET Cap Util and Ind Prod
4/17 8:30 ET Trade Deficit (Feb)
4/17 10:00 ET Wholesale Inventories
4/18 8:30 ET Retail Sales (March)
4/18 8:30 ET Philly Fed
4/18 10:00 ET Business Inventories (Feb)
4/19 8:30 ET Housing Starts and Building Permits

Key Economic Events Week of 4/1

4/1 8:30 ET Retail Sales (Feb)
4/1 9:45 ET Markit & ISM Manu PMIs
4/1 10:00 ET Construction Spending (Feb)
4/1 10:00 ET Business Inventories (Jan)
4/2 8:30 ET Durable Goods (Feb)
4/3 9:45 ET Markit & ISM Services PMIs
4/5 8:30 ET BLSBS

Key Economic Events Week of 3/25

3/26 8:30 ET Housing Starts (Feb)
3/27 8:30 ET Trade Deficit (Jan)
3/28 8:30 ET Q4 GDP final guess
3/28 10:00 ET Pending Home Sales (Feb)
3/29 8:30 ET Personal Income (Feb)
3/29 8:30 ET Consumer Spending and Core Infl. (Jan)
3/29 9:45 ET Chicago PMI
3/29 10:00 ET New Home Sales (Feb)

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