A highly engaging and informative interview with Eric Sprott from Palisade Radio
A Massive Move In Precious Is Coming
After the collapse of Lehman and the “official” great financial crisis, gold ran up 260%, silver soared 500% and the mining shares per the HUI moved up 418% – many junior mining shares spiked up multiples of the HUI’s percentage move.
Now that the systemic problems are worse than in the middle of 2008, we believe this current move in the precious metals sector will easily exceed the move it made from 2008-2011. We are confident that the returns in PMOF since the beginning of 2016 are an appetizer that precedes the main course. – Precious Metals Opportunity Fund quarterly investor letter
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…
Just a quick note on this referendum as we are in the final minutes of the voting. My sister’s friend is in the army. They came over for dinner tonight and he was asking about the vote and what my thoughts were. I then returned the question and he had said that 90% of the lads in his camp, which are in the hundreds, were all voting to leave. Their reasoning, in a British army camp of lads aged between 18 and 35, was because they don’t believe they should be getting webbed up in wars that we shouldn’t be fighting. He said they pretty much all can agree on the fact that the wars are dictated by Washington, via Brussels, and what they say goes and its not something they support. These were his words and I have to agree. – A British friend of the Shadow of Truth
The elitists had a lot to lose if the BREXIT referendum succeeded. Just like AP declared Hillary the nominee did BEFORE the Calif primary, the WSJ sent out an online article yesterday afternoon saying the REMAIN vote had won. But this last-gasp attempt to rig the vote failed.
The elitist narrative said that BREXIT would take down the British economy. The details of this were never explained but NWO’er, George Soros, warned as much last weekend. This was just another scare tactic used to cover up the fact that a BREXIT would undermine considerably the western elitist holy grail of a one world, one Government system.
The Ruling Body of the EU is the European Council, often described as the supreme political authority. Its members are not elected. It’s the fortress of totalitarian political control the western elitists have been methodically imposing on Europe, the UK and the U.S for several decades. If anything, the BREXIT victory represents a last gasp attempt to preserve democracy and Rule Of Law.
At the root of every political upheaval is indeed are hidden economic issues. The BREXIT should undermine the effort of the western elitists to impose the TPP Treaty, which is designed to advance the confiscation of individual self-determination. But more significantly is the issue of gold and silver:
The day that QE2 was announced by the Fed. That day, that morning, they were just beating the living daylights out of gold. People on the site were like “oh boy, this is going to be terrible”. I said NO, this is what the banks do. They try to reset the price as low as they can before the news because they know they are trapped. – Craig Hemke, Shadow of Truth
This is exactly what has transpired over the past week leading up to the BREXIT vote. Same game, different scenario. Craig went on to say “Ahead of what they knew was going to be gold bullish regardless of the outcome.” [BREXIT vote]
Since the end of 2014, there have been several notable indicators signalling a high degree of stress between the fraudulent paper bullion market used by the Central Banks to suppress the price of gold/silver and the available supply of physical metal to deliver into the paper claims.
One such indicator that is now stretched to an extreme is the Comex, where the amount of paper silver contracts issued represents over one billion ounces of silver. This is more than seven times the total amount of physical silver reported to be sitting in Comex vaults. It’s 45 times more than the amount of “registered” (available to be delivered) silver on the Comex. It’s 25% more than the annual global production of silver.
Likely, the most significant collateral damage inflicted on the NWO’ers by BREXIT is that it will destroy the ability of the western Central Banks to manipulate the price of gold and silver. The Shadow of Truth hosted Craig “Turd Ferguson” Hemke of TFMetalsReport.com to discuss this overlooked significance of the BREXIT victory (Part 1 followed by Part 2):
In real terms, most international fiat currencies could come to be near valueless when measured against gold and silver…And of course that climate will cause the utter collapse of the global stock markets, not to mention impact most severely our societal stability; all as direct consequence of the delusionary monetary practices employed for decades. – Safewealth newsletter
Sell please. I’m buying. There’s a lot of analysis out there with highly flawed assumptions. The biggest problem with this analysis – Seeking Alpha link – is that the author assumes the Fed will raise interest rates. That won’t happen until the entire is system is forced into a reset from a collapse. The Fed knows this and has no interest in hastening that reset.
Just like the continuous threat of raising interest rates, there’s been a continuous threat of “gold is overbought, too many longs, market is going to cliff-dive at any moment” like this article pouring forth (click to enlarge image). Where was this story-line when gold was being hammered daily as if the market was trying to dig a hole to China for the price of gold?
The gold net long is “stretched?” That meme is now quite tired. Put it to sleep please. Analysts with a longer track record in this sector than the author of the above article have been instilling the “net long” fear into the market for nearly three months now. Where’s this overbought sell-off?
They key to finding profit opportunity is to think outside the box. Based on my findings, there is a lot of institutional cash on the sidelines waiting to buy into the pm sector on any pullback. That’s why the metals have popped after that manipulated take-down on Monday – a takedown fueled by the “net long is overstretched” commentary that littered the airwaves last Friday after the COT report was released. (click image to enlarge)
This market has been surprising everyone to the upside and will continue to do so. At some point the lemmings who blindly soak up the “market is overbought” fairy tale will be running to catch the train. That’s when the real fun begins.
Currently gold is behaving similarly to the way it behaved back in 2003 when it was trying punch through $400. The “overbought” garbage was permeating the media back then just like now. In fact, Robert Prechter issued a call for gold sell off to $50. How’s that call look? Shortly thereafter the market blew through $400 and eventually hit $1900. I would suggest that the author in the article linked above was not around back then and thus has no context for what is happening now. (CLICK ON THE IMAGE TO THE RIGHT TO ACCESS IRD’s MINING STOCK JOURNAL)
Nearly 40 million ounces of paper silver were launched at the Comex yesterday in the space of seven minutes, which triggered a 92 cent waterfall in the price of silver; over 118 million ounces of paper silver were dumped on the Comex today (April 22) between 11 a.m. and noon EST. This market intervention typically occurs after the bona fide physical precious metals in the eastern hemisphere have shut down for the day.
The baseline assumption of modern financial theory is that fiat money is sound and markets are efficient. Neither of those suppositions are valid. The markets have been completely stripped of any legitimate price discovery function. You can’t tell me with a straight face that Tesla, which is now burning cash at a rate of half a billion a year is worth $33 billion – or 8x revenues – any more than you can tell me that junior mining stock with $500 million in proved gold/silver resource in the ground is worth only $24 million.
Gold and silver have been “climbing a wall of worry” for several weeks now. The traditional signs of an imminent manipulative attack on the metals (open interest of shorts vs. longs on the Comex, chart formations, etc) have defied the behavioral patterns of the past 15 years. Several “chartists” and Wall Street analysts, notwithstanding their boorish market prediction revisionism, have been been humiliated by the price-action in gold/silver since mid-January.
Several of us who have researched, traded and invested in the precious metals markets since the inception of the precious metals bull market believe that the bullion banks may have a bigger problem with sourcing physical silver for deliveries right now than with gold. The Comex bullion banks have been hitting the price of silver hard with paper contracts the last two days, in a desperate effort to beat down the price appreciation of silver during the overnight physical market activities of the eastern hemisphere bullion markets. (click image to enlarge)
Currently there are are 56,863 open May silver future contracts representing 284.3 million theoretical ounces of physical silver on the Comex. Against this is 31.9 million reported ounces of physical silver in Comex vaults that have been designated as available for delivery against these open contracts. In other words, the bullion banks have thrown nearly nine ounces of theoretical paper silver at the market for every ounce of alleged physical silver that could be delivered into these contracts.
Tuesday is options expiration day for May Comex gold/silver options. Typically options expiry is one of the triggers for a heavy onslaught of bank manipulation on the Comex. With a brief glance as the put/call open interest in May silver options, it looks like the bullion banks – i.e. the entities that are short May silver options – are motivated to push silver below $17 (based on the amount of open calls vs puts at $17) by the close of silver trading on Tuesday.
Similarly, “first delivery notices” for Comex gold/silver contracts go out after the close next Thursday. With the paper open interest in silver as of today 900% greater than the amount of physical silver designated as available for delivery, the Comex bullion banks will make every effort to shock and awe the hedge funds into liquidating their long paper silver positions. We saw this yesterday with the 92 cent silver smash going into the Comex open. Silver open interest dropped over 14k contracts yesterday. This is one of the many manipulation games the bullion banks have been playing with the hedge funds over the last 15 years.
Because the CFTC and the Justice Department look the other way when it comes to enforcing market regulations as they should apply to the Comex – because those same regulations are actively applied to every other CME commodity product – true price discovery in the gold and silver markets has become an impossibility. But we have 5,000 years of historical evidence which suggests that market interventions always fail. And when they ultimately fail, they fail spectacularly.
India’s jewelry industry is re-opening after a strike since March 1st that shut down India’s gold import machinery. A sleeping elephant is waking up starved for metal as India heads into its second largest seasonal buying period of the year. This will make it more difficult for the banks to manipulate gold/silver prices using paper, which means the illegal trading activity of the next few days may be the banks’ last opportunity to cap the metals until India goes back into hibernation in the summer.
I added to high octane junior mining stock positions in the fund I co-manage today and I will be presenting an insanely cheap junior mining stock with 5 million ounces of proved gold, have of which is in the form of gold-equivalent silver ounces in my next issue of the Mining Stock Journal next week. For a limited time, all new subscribers will have access to the back-issues published since the March 4 debut.
The character of the precious metals market has changed. The manipulation efforts using paper derivatives masquerading as gold and silver futures contracts is losing traction. I believe that the supply/demand dynamic in the physical gold and silver market is beginning to drive the price. Control over the price of the metals is likely shifting from NY/London to Moscow and Shanghai. I’ll have more to say about soon.
The News Doctor’s Eric Dubin posted commentary and analysis of the blatant paper attack on the price of gold and silver that took place about 40 minutes into the floor trading session on the Comex on Thursday morning (April 21). The initial price attack occurred in the space of about seven minutes in which $2 billion of paper gold and 1,218 tonnes of paper silver were dumped on the Comex. Over the last five years, an attack like this was usually the start of bigger systematic price-takedown of the precious metals over a period of several days. However, in the last couple of months, the market seems to shrug off these paper attacks and head higher.
“We’re setting up for an epic battle, and if silver keeps motoring forward, we may very well have an $18 handle on silver smack in the middle of the expiring contracts window. Buckle-up! There’s going to be fireworks, one way or another” – Eric Dubin, The News Doctors You can read the rest of Eric’s commentary here: The Precious Metals Bull
The price of gold ran up 20% since the beginning of 2016 through early March. In response to “overbought” readings in the popular momentum indicators, the superficial gold commentators become short term bearish. Additionally, based on what appeared too be a heavy “off-sides” in the bullion bank net short position vs. the hedge fund net long position in Comex gold futures, per the Commitment of Traders report, the “big price correction” side of the ship deck became heavily mobbed with short-term timing forecasts.
About two weeks ago, I decided to roll up my shirt sleeves and dirty up my hands with the COT data compiled by my business partner going back to early 2005. What I found in terms the current net short / net long positioning between the bullion banks and the hedge funds might surprise a lot of observers. Of course, I presented the information to the subscribers of myMining Stock Journal in the March 17th issue (along with a relatively undiscovered “de-risked” junior mining stock idea with substantial upside, risk-adjusted).
As it turns out, while the net short position of the criminal banks is above the average net short position from 2005 to present, it’s not even remotely close to the net short position historically that has signaled an imminent price-smash operation. Currently the net short position is 200k contracts. But the highest that net short since 2005 has been is well over 300k. The net short position was well over 200k for large portions of 2010.
In other words, while there is some concern that the cartel is set up to force the price of gold lower by bombarding the Comex computer system with paper gold detonators, the comparative historical statistics suggest that gold has lot more upside and the open interest has a lot of room to expand before the cartel is in a position to throttle gold lower.
In fact, a case can be made that the current pullback in the price of gold may be winding down – click on image to enlarge:
As you can see in the graph above, gold has nearly pulled back to its 50 dma (dark blue line) and the momentum indicators (RSI, MACD) have moved from “overbought” to a neutral position. The RSI may be actually be turning back up (green box).
As we’ve seen with official intervention in all markets, it’s nearly impossible to forecast directional moves with any degree of accuracy. However, there’s a case to be made that the cartel is having problems forcing the price of gold lower. On several occasions in the last two weeks, gold has been slammed in overnight trading only to snap-back. Monday was a prime example, as gold was smacked hard for $10 down to $1210 in Asian trading but bounced back to close nearly unchanged from last Thursday’s close of $1221.
The fact that Indian jewelers are still on strike and thereby choking off Indian imports makes gold’s resilience even more remarkable. At some point, India will have to start importing heavily in order to facilitate seasonal, festival-related gold buying in May.
Even more interesting is the behavior of the mining stocks. The HUI index ran up 83% from Jan 19 to March 16. A price correction had to be expected. While it looks like the miners are still vulnerable to a bigger price decline than the current 7% pullback, don’t forget that the HUI more than doubled between late October and December 31st in 2008.
I’m preparing to chat with the CEO of junior gold mining stock that has been largely unnoticed by U.S. investors, retail and institutional. But a strategic buyer recently bought a 20% stake in this company and also plunked down a considerable sum of cash for a 1.5% net smelter royalty. I will be presenting this idea in the next issue of the Mining Stock Journal, which should be out either Thursday or Friday. This issue will also include proprietary market commentary and other “goodies.”
The 50 day moving average in gold has turned up and it has bullishly crossed through the 100 dma – it has also bullishly crossed through the 200 dma…It’s almost like the HFT hedge fund programs have been flipped from “sell every rally” to now “buy every dip” because the technical picture is so good. – Craig “Turd Ferguson” Hemke on the Shadow of Truth
The debate raging in the precious metals community is if and when the a big raid on the precious metals market will commence. Today, for instance, gold had drifted higher in overnight trading only to be smacked pretty hard when the Comex opened. That’s nothing new. But what’s new, given the way in which the precious metals market is set up right now, is that after being taken down $12 by the criminal traders on the Comex, gold grinded higher until it was only down a couple bucks by the time the stock market closed. Even more interesting is that fact that the mining stocks (HUI Amex Gold Bugs Index) rejected repeated attempts to take them into negative territory and they finished up over 6 points – 3.6% – on the day.
The trading pattern of the precious metals sector – at least for now – has defied all expectations of the market given that the technical factors currently in place have historically ushered in a vicious takedown of the sector.
This data that I refer to when I talk about the bank picture, whether its the Commitment of Traders report or the Bank Participation report, it’s all dubious crap anyway because it’s generated by the criminals at the CFTC…when they crank out these reports, we’re supposed to take them seriously in the first place? The CFTC is a criminal co-conspirator [in the precious metals manipulation scheme] – Craig “Turd Ferguson” Hemke, SoT
A big variable in the expectation of a big sell-off in gold and silver is the COT “structure.” As of last Tuesday, the “Commercial Sector,” which is primarily the bullion banks, is net short 171,000 gold future contracts. The hedge funds segment of the COT is net long 104k gold future contracts. The “other reportables” and “non-reportable (retail trader) segments make up the rest of the long side of the bullion bank short position.
The net short of the bullion banks is 17.1 million ounces. Currently, the Comex vaults are showing 377k ounces of gold in the “deliverable” account and 6.8 million total ounces. This ratio of short interest to the amount of physical underlying is absurd. Technically it’s illegal because, as Craig discusses in the interview (see below), the CFTC continuously defies the laws in place and enables the banks to skirt mandated position limits on the Comex.
What will happen if one of these days the hedge funds decide to stand for delivery? If just 50% of the hedge funds stand for delivery? While it’s true that in any given delivery period that, at most, 1% of the long open interest stands for delivery, the laws of probability suggest that one of these days a significant portion of the longs will decide to take delivery. This will bust the Comex.
In the interview session below, we discuss this issue with Craig and several other factors right now that are affecting both the markets and the Central Banks ability to manipulate the markets. At some point the demand for physical gold/silver will break the system:
Someday something will change and the confidence scheme will fail. Every uptick [of gold] increases the pressure on that confidence scheme which is why the banks are fighting it so hard…in the end they are just not going to be able to…Craig “Turd Ferguson” Hemke on SoT
Betting against gold is the same as betting on governments. He who bets on governments and government money [fiat currency like the U.S. dollar] bets against 6,000 years of recorded human history. – Charles De Gaulle
Silver, for 6,000 years of human recorded history, has been “poor man’s gold.” In fact, based on everything I can find on the topic, silver was used as currency before gold. Buying silver with the gold/silver ratio at 80 is like buying gold on steroids.
Charles De Gaulle is the person who is credited with forcing Nixon to “close the gold window” in 1971. De Gaulle had figured out the U.S. had issued far more debt to foreigners than it had in gold to back that debt, per the requirement of the Bretton Woods Agreement. De Gaulle had been quietly exchanging Treasury debt purchased by the French Government for gold, per the terms of Bretton Woods. Before De Gaulle had a chance to clean out the Treasury’s gold, Nixon unilaterally and illegally terminated that portion of Bretton Woods. To this day I have not read a reasonable analysis which explains why the rest of the world enabled the U.S. to get away with this.
The massive issuance of paper claims on the stock of physical gold and silver supposedly available to deliver into those claims should they be exercised has risen to proportions which would make the Johnson and Nixon Governments blush. Meanwhile the visible inventories of gold and silver continue to diminish (see this, for instance: Deliverable Silver Stocks At The Comex Reach Historic Low).
it seems a small portion of the U.S. public understands the reasoning behind De Gaulle’s assertion above and has been converting fiat dollars in poor man’s gold, as U.S. minted silver eagle sales hit an all-time high for the month of February: Sales Of Silver Eagles Smash February Record.
If the percentage of the public – currently estimated at maybe 1% – that is buying gold and silver were to increase by just a few percentage points, the monstrous paper gold/silver short position underwritten by the bullion banks and the entities standing behind the bullion banks will go from potentially unmanageable to catastrophic.
Many of us think silver will be the ultimate “Achilles Heel” of these entities who have been aggressively manipulating the price of gold and silver since 2011. While the impending move by Governments to a “cashless” banking system will likely cause a run on cash at the banks by the public, I believe that the run on cash will be followed by a run on gold and silver.
Paper money eventually returns to its intrinsic value – zero. – Voltaire
Something feels “different” about the way the precious metals are trading. This is reinforced by trading action in the mining stocks. The silver junior stock I recommended in the Jan 10th issue of the Short Seller’s Journal is now up 50%. It could easily be a 5-10 bagger from here. I recommended another silver stock, an emerging producer, in the current issue. I also featured a short idea this week that could quickly shed 50% once this latest short-squeeze bear market rally subsides. Today might have been the start of that. You can subscribe to the Short Seller’s Journal by clicking HERE or on the image to the right.
Concerning gold and noting that this is Friday, “they”…and we’ve no idea who “they” are, but we do indeed know that “they” exist… are out there again making mischief as they have tried to do so many times in the past. Fridays “They” wage war on gold. – Dennis Gartman from his Jan 29 “Gartman Letter”
With the entire precious metals community is still discussing the fraudulent LBMA a.m. silver fix, I happened to notice that the HUI gold mining stock index quietly is up 20% since January 19.
What I find interesting about this is that if this were a stock like AAPL or AMZN, for instance, CNBC/Bloomberg News/Fox Biz would be falling all over themselves with the declaration of a new bull market in those stocks. Instead with regard to mining stocks – crickets.
Perhaps even more interesting is this graph to the left, which shows the performance of the HUI from the inception of the precious metals bull market vs. the S&P 500 over the same time period. This is yet another example of information that will never be presented on the adult cartoon channels also known as financial news programming. Since the end of November 2000, the S&P 500 has traveled from 1314 to its current 1919, or 46%. But the HUI mining stock index has moved from 42 to its current 120, or 285%. That fact would probably surprise a lot of people.
Turning to the quote at the top of the blog, you’ll note that until very recently Dennis Gartman habitually used to lift his leg and urinate on the investment community, which he referenced simply as “bugs” (as in “goldbugs”). He used to veto with an iron fist any notion that the precious metals market is manipulated. Wonder what all off a sudden gave him religion?
Here’s another fact that might surprise a lot of people: It’s now being estimated that India imported at least 110 tonnes of gold in December. In addition, Swiss and Hong Kong gold exports to China reached a record in December. It’s estimated that China and India combined imported 300 tonnes of gold just in December. That goes a long way toward explaining why the amount of gold made available for delivery on the Comex has reached a low level not seen in decades and the paper to gold ratio has reached a level that is mindblowing.
The point here is that, just like the true underlying fundamentals of Amazon.com’s business model and financials do not fit the market valuation given to its stock, the underlying fundamentals of the physical gold do not fit the price as reflected in the fraudulent paper markets controlled by the LBMA and the Comex. If anything, yesterday’s LBMA silver fix reflects the endemic corruption in the paper gold/silver market. It also reflects the extreme degree of desperation to control the precious metals markets by the western bullion banks. The bottom line is that they are running out of physical metal with which to perpetuate their fraud.
Thus I’m not surprised that the mining stocks, as represented by the HUI index, are up 20% in a short period of time. The mining stocks are at their most oversold and undervalued in U.S. stock market history, especially when evaluated in relation to the price of gold and silver. But don’t wait around for Maria Bartiromo or Joe Kernan to start promoting the mining stock sector – that will never happen. As Dennis Gartman has noted, it’s a war on gold. But my best guess is that the key battles are now being won by the “bugs.”