Tag Archives: Comex default

Gold And Silver: Patience Required

I wanted to share a discussion on the metals that I had with GATA’s Bill “Midas” Murphy this morning.  I had emailed him to ask him if he knew of any reasons the metals were getting slammed today because the dollar was down a bit, the economic reports were poor  and the stock market was selling off –  all three occurrences of which are precious metals-friendly.

As Bill suggested, silver is under more pressure today than gold, with JPM going all out to get the speculative traders to sell, which helps JPM push the price down.  If you look at short term chart, it would appear that silver is forming a head and shoulders “top” formation, something which JPM is trying achieve, as Bill correctly pointed out.

However, technical formations almost NEVER work in the metals. Typically doing the opposite of the what the  formation is indicating works the best over the last 15 years. That would imply a big upleg coming, which supports my view based on the fundamentals, which would support the view of another big move higher on the horizon.

I think JPM is doing whatever it can to minimize the damage from the inevitable. The biggest seasonal physical buying period starts in another couple weeks. Next week is options expiry for Sept silver. They probably want to push silver below $19.50 if they can because the Sept silver put/call structure currently is favorable to the call-writers (i.e. JPM) is silver closes below $19.50 on the 25th. The problem is, the way the economy and the political system is melting down, they can’t control the possibility of a random news event hitting the tape that would send the metals soaring. I believe there’s high probability a news event like that could happen at any time.

Interestingly, the o/i for gold is coming down a bit earlier than usual for the typical contract “roll” period (for Aug) and the Sept silver o/i is coming down. They are covering for a reason, I believe.  (click image to enlarge)

Untitled Silver is up 42.4 % since Dec 14, 2016. That is a HUGE run.  If you look at a 1-yr graph, silver is trending sideways consolidating that gargantuan move it made in just 7 months.  JPM and all of the other technical analysis cretins out there want us to believe that silver is forming a head n shoulders top formation. But it’s not.  It was in danger of going parabolic, something we DON’T want to have happen. Yes, silver could go parabolic up to $50 and still be insanely undervalued relative to the supporting fundamentals, but the huge hedge fund trading algos would not treat it that way.

Silver looks like it will pullback to its 50 dma, which is around $19.15 right now. As long as it holds that level – and they may crush it below that level with A LOT of paper for a few days, it will be ready for the next upleg. Since mid-Dec, we have been in an uptrend that is bouncing off of the 50 dma and moving higher.  The RSI and MACD momentum indicators are signalling the probability that the current move is becoming “exhausted,” with probability weighted toward a move higher soon.

At some point we might see a 200 dma correction. But silver could correct to its “chart” uptrend line around the $17 and still be up 24% since Dec 14.  Anyone who would sneer at that ROR belongs in an asylum or is an internet blog terrorist.

Both gold and silver are in the process of making an eventual move that will shock and awe.  We’re now aware that some of the biggest, most influential money manipulators in the world are shoveling fiat currency confetti into big positions in gold and silver – including the nefarious Rothschild clan:  LINK.  These guys are not buying gold for just a double or triple. They’re buying it because they know that the global fiat paper currency experiment is coming to an end.  And along with it so is the debt-fueled lifestyle America has enjoyed since 1971…

Full Metal (Gold And Silver) Price Manipulation

I’m not sure of the significance of 20 minutes past the hour, and I’m sure it has some sympbolic meaning to the gold manipulation cabal, but for the last week the price of gold has been getting slammed with an avalanche of Comex confetti at regular intervals at 20 minutes past the hour.

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THAT is not the graph of a market that is allowed to trade freely.   But notice how gold bounces back sharply from every take-down attempt.  This is especially significant given that this is one of the slowest seasonal periods of the year for the buyers of physical gold and silver.

This morning (Tuesday morning) was particularly blatant.  Gold had traded steadily higher overnight from $1344 (December futures basis) to $1364 just after the Comex floor opened for business (8:20 a.m. EST/6:20 a.m. MST).

Whenever the elitists start to lose control of gold, they roll out one of their Fed stool pigeons to threaten the world with a 25 basis point (one quarter of one percent) rate hike at the next FOMC meeting (September).   Today’s park bench popcorn scavenger was NY Fed President, Bill Dudley, who stated on Fox Business that a rate hike in September is “possible.”  I guess that means September’s meeting is a “live meeting” – a phrase Dudley and SF Fed Prez, John  Williams, propagated the mainstream media propaganda meat grinder with in May – LINK .

But gold shrugged off Dudley’s empty, Straw-man threats and closed today respectably up about $5 from the close of yesterday’s afternoon “access market” trading session.  I still believe that gold could see $1500 by Halloween despite the Comex B-52 paper bombs being dropped religiously on the market.  And we are just one economic, political or societal catastrophe from gold making a rapid run toward $2,000.

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Buy every manipulated sell-off in gold and silver.  It’s the true “TINA” idea.

A lot of readers have asked me if it’s too late to buy mining stocks at this point. I refer them to a long-term graph of GDXJ so they can see where the junior miners have been relative to the level at which they bottomed. It’s a prototypical chart of a market that is in the early stages of a massive move higher. The key is to identify the exploration companies that have a high probability of hitting the proverbial pot of gold. The last 5-years caused a lot of damage to the junior sector, but there’s a lot of companies with “a pulse” that have been revived, albeit significantly undervalued from a risk/return standpoint.

My Mining Stock Journal is focused on finding companies that are currently overlooked by the mainstream mining stock analysts and newsletters. As an example, I presented a stock idea in mid-April that is up over 280%. It recently doubled in price shortly after a major newsletter service poo-poo’d the idea. I draw on several seasoned veteran contacts plus 15 years of experience researching and investing in this sector. You can access the MSJ – a bi-weekly report – here:   Mining Stock Journal.

I just received your August 4 Stock Journal and before getting to your suggestion and half way through your guidelines for picking stocks I wanted to write this first. I have attempted to find those obscure companies and must say it is most difficult. Upon reflection I should have just waited on your bi-weekly report because your picks have been awesome. – “Jim”

Mining Stocks Look Ready To Explode Higher Again

The news that China has been to some degree crowded out this year by Western demand for gold is of minor importance compared to this further evidence that the mighty double-digit growth 15+ year surge in Chinese domestic gold production seems at last to have topped out. This means Chinese appetite for gold will increasingly have to be met from overseas.  – John Brimelow   JB’s Gold Jottings report  LINK

It was reported by Reuters Africa yesterday that Chinese gold production in the first half of 2016 was up slightly from the same period in 2015.  2015 production was down .4% from 2014.

If the amount of China’s domestically produced gold begins to decline, China’s enormous demand for gold will require a lot more gold imported from the rest of the world.  This will make things interesting – given the already enormous supply/demand deficit in deliverable physical gold  – because we know that, based on retail gold coin sales in the  U.S., Canada, England and Australia,  retail demand in the west is picking up quickly.

Let’s examine the phrase, “deliverable physical gold” for a moment.  It’s well understood that the amount of legal claims to deliverable gold written on pieces of paper – Comex futures, LBMA forwards, lease agreements, hypothecation agreements, OTC derivatives, etc – exceed the amount of available deliverable physical gold by an unaccountable amount.

For example, the total paper gold open interest on the Comex exceeds the amount of gold that has been made available for delivery by a multiple of 35.  But we can’t account for the amount of LBMA forwards, lease/hypothecation claims and OTC derivatives gold liabilities. Therefore,  the total physical gold supply deficit is unaccountable.

With gold in a state of scarcity and with the mining stocks historically undervalued in relation to the price of gold and silver, the mining stocks have the potential to make a move that will rival the move made by the internet stocks in from 1998 – 2000.  James Dines is the first to have made this prediction over 16 years ago. The only difference, of course, is that the revaluation in the mining stocks will be based on measurable intrinsic value whereas the move made by the internet stocks was a modern version of the Dutch Tulip bulb bubble.

All this is to suggest that mining stocks appear ready for another big upside move (click on graph to enlarge):

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At some point soon, the mining stocks are going to undergo another significant upward revaluation, which will reflect the increasing amount of stress that is going to be exerted on the market for deliverable physical gold. This “stress” will only be relieved by a much higher price for gold and silver.

While I’m not making an official price forecast, I would not be surprised to see $1500 gold and $25 silver by the end of October.

Click on the banner below to find out how you can take advantage of junior mining stock ideas that have significantly outperformed the market.

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Will Silver Hit $54?

With all the action in silver and gold on Sunday night July 3, 2016 we, at Shadow of Truth, thought we would provide a quick update on what has happened and what could potentially happen. Silver, in particular, looks very, very bullish. Dave breaks down all the technical charts and Rory provides some color commentary.

Some of this was inspired by our friend Jesse, Jesse’s Cafe Americain, in a recent article, Silver Cup and Handles Project to a Price Target of $54, Jesse shared the following:

I know some of you have been projecting these nested ‘cup and handle’ formations on your own, because several readers have sent their examples to me and have asked for comments.My first comment is the most important and I wish you to take it to heart.

Projections such as this are not forecasts, because the chart formations in these examples for the most part have not been ‘activated’ and are therefore merely potential things, possibilities, lines on a page subject to a great many exogenous forces and variables, including human and institutional decisions.

Only the cup and handle ‘a’ on the chart below has been activated and achieved fairly quickly I might add. We are now working on ‘b’ and it will not be activated unless the price of silver takes out 21.50 or so.

And then and only then if the price of silver in dollars holds that level with the kinds of retracements and pricing action one would expect to see as a confirmation of it can we say that the chart formation is active and ‘working.’ And even then it could fail. Continue Reading>>>

If you look at the following charts the picture it paints seems to be fairly clear. The first chart, weekly silver movement, clearly shows the first line being broken. The second line, approximately $27.00, is the next line of resistance. Once that line is broken, according to technical analysis, silver should run to the mid $30’s before it meets the next line of resistance.

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Will any of this happen? Your guess is as good as mine. What is 100% clear and undeniable – the first line of resistance has been broken and the algorithms should be entering the market. If silver stays above $20.30 overnight Monday July 4, 2016, the algo’s should kick in and it should be game on.

Gold And Silver Investors Smell Central Bank Blood

The mainstream narrative that gold/silver moves inversely with stocks because the metals are a “risk off” trade has imploded. Since late January, when the S&P 500 began to “recover” from its 11% New Year’s plunge, the precious metals and the stock market have been rising in correlation, with the precious metals significantly outperforming the stock market since mid-February:

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As you can see, the move in the metals accelerated since the BREXIT vote.  The latest Central Bank induced market spike has pierced the boundaries of absurdity:

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The immediate “snap-back” in the stock market after a two-day post BREXIT vote 5.3% plunge in the S&P 500 has violated the sensibilities of all but the most idiotically apologetic stock market perma-bulls (Mark Zandi, Cramer, Suze Orman, Liz Sonders etc).

It’s clear that the Central Banks are desperate to keep the stock markets from plunging, despite the fact that the deterioration of economic and financial fundamentals globally – including and especially in the U.S. – has begun to accelerate.

Smart investors smell Central Bank blood and the latest market intervention just reeks of desperation.  This is the dynamic that is propelling gold and silver higher, despite the preponderance of bearish calls from all corners of the market, including many precious metals market analysts.

The Central Banks went overboard with the latest round of stock market intervention.  The recent increased movement of investment funds from fiat-based “assets” into gold/silver reflects the more widespread perception that the Central Banks are trapped by long series of bad policy decisions.  The obvious conclusion is that Central Banks are now forced to hyperinflate the money supply or face a total stock market collapse.

Of course, the hyperinflation of currencies will do nothing to stimulate real economic growth or fix the completely unmanageable global debt and derivatives problem.

Perhaps the poster-child example of the damage done to the markets by radical Central Bank intervention and manipulation is Tesla (TSLA).  If not Amazon, TSLA is perhaps the greatest stock Ponzi scheme in U.S. history.  Aside being riddled with total accounting fraud, TSLA is technically insolvent and overloaded with debt that it will eventually impale itself on.  It was reported today that the test driver in a TESLA self-driving car was killed when the car crashed into tractor-trailer at high speed.  The test-driver was watching a movie in the car.  At least he didn’t know what hit him.

TSLA stock in a freely trading market would have been decimated today on that news.  But today it’s trading unchanged from yesterday’s close.  The only bigger tragedy than this fact is the death of someone who put their faith in Tesla.

Tesla would not exist in its present form if it weren’t for the extreme Central Bank intervention and manipulation of the capital markets.  It certainly would not have had the capital to work on an auto-piloted car given that its core business model lost nearly a billion dollars last year. This is the type of “blood” in the streets to which the price of gold/silver is responding.

If  you review a long term graph of gold/silver vs. the S&P 500 (on your own), you will note that  best price performance periods for the precious metals have been preceded by a short period of time in which the metals are highly correlated to the upside with the stock market…

MSJ is a great resource!!!  – Johnny – You can subscribe to my Mining Stock Journal here: LINK – or my Short Seller’s Journal here:  LINK.    I am currently offering new MSJ subscribers all of the back-issues (March 4th debut).   I also offer a 50% discount on the second subscription to anyone who subscribes to both (email me for the discount link).

I must say that Tesla is a perfect example of how screwed up the stockmarket is. Only bad news for the company like the purchase of the bankrupt company, Solar City. Wheels falling of the cars and bad suspension on cars that are almost new. Death accidents with malfunctioning auto pilots. Risks of lawsuits due to this. And the stock goes up- how retarded is this? No fundamentals matter at all. I´m really enjoying the silver rally and I bet you do as well. All the best from the negative interest rate Sweden.

Central Banks Are Losing Control Of The Gold And Silver Trading

Note:  the current delivery-month for Comex gold is June – I absent-mindely reference July as the current gold delivery month in the podcast below.

The trading patterns in gold/silver are starting to reflect the real possibility that the Central Banks are losing their ability to use paper gold/silver derivatives a price manipulation device.  Nowhere is this more evident than on the Comex, where the ratio of paper gold/silver futures vs. the amount reported physical gold/silver available for delivery into those paper claims is at historically high levels.

Elijah Johnson of FinanceAndLiberty.com invited me on to his podcast show to discuss the precious metals market, along several other topics.  Elijah posted the portion of the show in which we specifically discuss Comex gold trading because it coincides with the strong move higher made by the metals this week.

If the CFTC passed a regulation prohibited the issuance of gold/silver Comex contracts in excess of 120% of the amount of underlying physical gold/silver it would probalby cause a doubling of the price of gold and a quadrupling in the price of silver…

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Stunning Development In Comex June Gold Deliveries

If the Comex were allowed to issue paper contracts representing no more that 10 or 20% of the actual amount of gold held by Comex vaults, what would the price of gold be?

1.176 million ounces of gold have been delivered – or should I say “delivered” – for the June contract six days into the June contract delivery period.  I don’t follow the delivery patterns as closely as I used to, but this is a massive amount of stated deliveries.  Even more interesting is the fact that there’s still 6,683 Juno contracts open representing 668,300 ozs of potential deliveries.   This is a relatively high number of contracts still open this far into the delivery period.

One other interesting point of note is that over the last few months, a couple new “players,”  beyond the standard Comex bullion banks (JP Morgan, HSBC, Scotia) have been participating in the deliveries:  B of A (Merrill), International FCStone Financial, Morgan Stanley and SocGen.   All four of these have been taking an increasing amount of deliveries the past couple of months, primarily on behalf of customers (vs. for their own house account).

I have no idea what would be triggering this sudden increase in delivery activity on the Comex – other than the obvious.   And who knows to what extent the physical gold is actually being moved from the accounts of the delivering parties to segregated accounts of the parties taking delivery.   It would be even more interesting if a lot of this gold was being removed from the Comex, which would reinforce the likelihood that it really exists in unencumbered physical form.

On another note, the stock portfolio portion of the fund I co-manage was up 4.7% today vs. the HUI up .23% and the GDXJ “junior” ETF up 1.7%.  We own highly concentrated positions in true junior exploration stocks.  My point here is that a lot of money is flowing into the highest risk/return segment of the mining stock sector.  In my opinion this is a signal that the “smart” money is expecting a big move in the entire sector.

I publish the Mining Stock Journal, which is a bi-monthly subscription report which features a junior mining stock in every issue.  I try to find lessor known ideas because I want to put my money in good ideas before the wider universe of newsletters begin to discover them.   The next issue out this Thursday will be featuring a very small silver exploration company that appears to have found what could be very large silver (polymetallic) deposit.   You can access the Mining Stock Journal here:   MSJ Subscription Link.   I am sending all-back issues to new subscribers.

Considering the research and content, both the Mining Stock Journal and Short Seller’s  Journal are remarkable bargains.  – from subscriber “Jay”

 

Silver Remains The Cheapest Investment On Earth

As discussed earlier, today’s price-action in the paper Comex gold market is nothing that a reflection of the Fed’s desperate attempt to keep the price of gold from breaking out above $1300.   The reason for this is that a break-out above $1300 would trigger a lot of computer-generated buying and likely catapult gold in the $1500’s rather quickly.   If you notice, since the end of April the Fed has slammed gold as it traded above $1290.  $1300 was rejected on May 2nd and 3rd.  It’s similar to when gold was punching on the ceilings set at $400, $500, $600 etc back in the mid-2000’s.

Silver is a much smaller market and is used for more than just a currency and wealth preservation asset.  Depending on the relative strength of the economy, up 70% of all silver is used for industrial applications.  At the margin, a small incremental shift in the demand curve for investment silver has the potential to bury the issuers of uncovered paper silver (Comex futures, OTC derivatives, LBMA forwards, etc).

When the Fed/ECB/BOE/BIS loses control of the precious metals derivatives markets – an event which could easily occur this year – silver’s rate of appreciation will stun most observers/commentators.   The SGT Report invited me on its podcast show to discuss the precious metals market and the insidious corruption that has engulfed the U.S. system.

You can subscribe to the Mining Stock Journal using this link – new subscribers will receive all of the back-issues (March 4, 2016 debut):   MINING STOCK JOURNAL

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Rigged HFT-Driven Paper Trading Drives Gold Lower Today

I want to preface this commentary with the “proviso” that I have no idea how violent to the downside this attack on the precious metals will get.  No one does.  It could end today;  it could end at the 50 dma (approx $1,248 on the front-month paper gold instrument traded on the Comex);  it could go all the way down to the 200 dma.  Even the banks who are driving this activity have no way of knowing.

I am using every step down in gold to move more money into my BitGold account.  The Untitledaccount functions almost like a checking account.  You get assigned individual kilo bars or interest in a kilo bar when you move money into the account.  You benefit to the upside when gold shakes off the intervention and moves up again.  You also can get a Mastercard that lets you access the funds easily.  The best part is that BitGold operates outside of the Central Banking system.  Click here – BITGOLD – or on the image to the right to get started.

Gold began selling off as soon as the Globex Comex computer system opened for the week UntitledSunday evening (6:00 p.m. EST).  But the distinctive “waterfall” price plunges did not begin until about 30 minutes after the open of the Comex floor trading at 8:20 a.m EST (Click on the image to enlarge). This trading pattern is characteristic of the paper bombs the bullion banks throw at the market in order to trigger the stop-losses set by the hedge funds.  The trading is mostly computer-based.  Trading volume was light compared to the spike up on Friday after the jobs report, which makes it easier for the banks to plunge the market.

Note:  if anyone wants to learn about the mechanics involved in “plunging” the markets, read “Reminiscences of a Stock Operator” by Edwin Lefevre.  It’s the unofficial biographical accounting of Jesse Livermore. It’s a must-read for anyone who wants to understand the extent to which the current market is rigged.   The only difference between now and the 1920’s is that now the Central Banks are directly behind the activity and they are driven by an entirely different motive than that of Jesse Livermore.

Speaking of the jobs report, the most idiot attribution for the sell-off in gold comes from Investing.com – LINK – which “informs” us that gold futures fell overnight because “investors viewed Friday’s jobs data as less disappointing than first thought.”    I don’t really know how to respond to that assertion other than to question the author’s relative level of intelligence.

This is an HFT computer algo attack operation. They have a problem with the physical market. I surmise that it’s worse in silver than in gold. Gold is now only 1.4% away from a 50 dma “correction.” The 50 dma has been pretty good support. There’s a good possibility that the 50 dma will “stop” the sell-off. If not it will drop pretty quickly to the 200 dma. Either way, the only way to take advantage of this is to add to positions with every “step function” price plunge lower. The market sentiment levels per Marketvane and the HGNSI are still not even remotely close to levels that indicate a contrarian sell-off is likely.

In fact, if anything, the continuous flooding of anti-gold propaganda from the media and Wall Street convey a sense of desperation from the powers that be that derive their “power” from an ability to control fraudulent fiat currency.