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I don’t need to tell any of you who were paying attention about Friday’s crater job on the precious. Coming about on the Friday before options expiration week, at at the end of a long and dreary down cycle, it certainly looked nicely timed to shake the trees loose of many golden and silver ducats. Friday was a nice day to make that first physical purchase and tomorrow morning may be even better as a result of the follow through.
I’m holding on to what I’ve got for the almost inevitable mean reversion play here. The precious miner bullish percentage index (“$BPGDM“) is at absolute ZERO. The last time we hit zero on that scale was in December of ’08, at the very nadir of the financial meltdown. What’s more the Hulbert gold sentiment rating is off the chart completely (yes, below -20, otherwise known as “uncharted territory.”) We lost another $50 tonight before the rebound, and we could even see $1400 tomorrow. Is this the time to give up the ghost? No, it’s blood in the streets time. You know what Mr. Rothschild said about the time to be looking to buy, right? Consider that the Buying on Weakness number for GLD was its highest ever on Friday at $144 mm in block trades. That’s the big boys out collecting.
The best bet right now is physical, and or waiting for the turn, with wariness and apt cunning. Fly got some AG on Friday, and while he may have been a touch early, I think he’s got the right idea. The fast flyers will rebound 20+% when this plunge is over. I also like the fat dividend alpha males like AEM and NEM here… they too have been beaten down over-harshly.
Hang on, folks, we’ve been through these before.
Best to you all.
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Yeah Jake. So good to hear from you. I’ll be adding to my 2015 SLV LEAPS either tomorrow or sometime next week. They should be at bargain basement prices. If I don’t make money on them by 2015, I’ll eat my hat, the only thing I’ll be able to afford to eat.
I have some good recipes, including
“Chapeau au Crow.”
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NUGT may have to do another reverse split before this week is over. lol
NUGT “investors” deserve what they get.
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gold 61.8 fib of entire bull market = 1285
50% = 1088
silver 38.2 = 21.52
program your black boxes
$HUI 38.2 = 266.20
Yep, yep and yep.
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Interesting Article: GLD Holdings Plunge
(Excerpt)
Extreme GLD selling on a daily basis is also a fantastic contrarian indicator itself. I generally consider GLD differential selling pressure on any given day material if it is big enough to force GLD’s holdings down by more than 0.5% that day alone. And big GLD holdings liquidation days are over 1.0%. Clusters of these near gold lows are major bottoming indicators, they reveal sentiment in gold has grown too bearish to persist.
Since the February gold capitulation, we’ve seen 3 separate trading days where GLD’s holdings fell more than 1.0%. They are pretty rare over GLD’s 8.4-year history, only occurring 51 times or about once every 40 trading days. The last time a similar cluster was seen was actually in October 2008 during the stock panic, just before gold started more than doubling in its next mighty upleg that was being born in despair.
So historically big GLD liquidations, both in individual-trading-day and multi-month-trend terms, have actually been very bullish contrarian indicators. This precedent completely contradicts many of the gold bears dominating the financial media, who claim excessive GLD selling is bearish rather than bullish. In reality, stock traders panicking out of GLD shares is an indicator of fear reaching irrational extremes.
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Sure hope you’re right. I am not selling my PM holdings, but I don’t like the larger picture. Gold and silver down heavily and the rest of the market almost shrugs it off? (I had posted a similar thought on Chess’ blog earlier in which I was worried, but now I’m leaning towards scared.) Copper and oil have dropped a lot, but so far everybody blames it on a bit of a China hiccup. The premium on CEF has been running between 1% and -1%, but hit -6% on Friday; nearly a record, the only time I’ve seen it lower was two days in May 2011. Don’t know what it all means, but between China’s lack of growth, and Japan’s huge stimulus, and Europe’s picking up Cypriot gold for a song, I don’t think it’s good news for US stocks. Guess we’ll see if the US economy surprises to the downside.
US Stocks have had a nice run. They are due at least a pullback here.
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doesnt anyone see what they are doing. tankers are bumping into each other all over the world,that countries are turning away because of a glut.now throw gold crashing into the mix,against the very countries that “don’t”want to settle in the green back no mo. were seeing it in real time.do we honestly think that the uk,and the us will let the reserve currency go by the way of the dodo…….the brics and the piigs think so.
It won’t be up to the USA or the UK, events will overtake them.
It’s simple:
Deflation leads to
More and more QE
leads to currency debasement
leads to higher prices
leads to yet more deflation
leads to more and more QE
and onwards until…
hyperinflations!
They will not sit back and allow deflation to take down their system (via bad debts, banks etc), they will print at all costs, and kill their currencies.
The exception is the ECB, different mandate, different approach altogether, allowing reality to happen, but saving the currency. And check out the ECB’s physical gold reserves, marked to market each quarter, gold is heading back into the centre of things, but free-floating.
The paper gold markets will eventually crash (yes, crash) as big money rushes for physical gold, selling the Comex/LBMA paper, so hold your physical then, it will not be the gold bubble bursting, but the opposite.
OK, now you know!!
Nothing is over until we decide it is!
Who’s with meeeee???
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Interesting notes on AG… 200 week EMA = $12.51.
61.8% fibonacci retrace on the $3– to 26.88 move?
$12.12
I’ll throw that chart up tonight.
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and i’ll continue throwing up.
Doubled my money in PPC and will use it ‘buy the blood’.
Kind of like going back to the American Heart Association after donating a few pints and paying thousands of dollars for the blood i just donated.
BTW — AG lows of today was $12.11
Currently trading at $12.66.
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I bought it at $12.30 on it’s way up…before it went down, again.
this is the disconnect that i want.i just cant believe it’s being done. the ever elusive crash and inevitable realization that paper metals trading is the complete sham that it is. jake,people want physical delivery of their investment,now look at the shitstorm it created.what a lovely site to behold.bernanke isnt printing any money,that another lie. i say this because for the last two years,every fresh crisp 5,10,20 bills still have paulsons name all over them. i challenge anyone to go to their bank to find out……..
The currency part of the money supply is less than 3%, Drummer.
Its the “button pushing” liquidity that’s coming in at $85 bn a year.
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Now hold on a minute Jake-
Take a look at this:
http://2.bp.blogspot.com/-qTCtf46ra4E/Ti_-Oi4atiI/AAAAAAAAD_w/X4nBMthaIn8/s1600/bernanke+trillion+dollar+bill.jpg
LOL
During summer 2008 SLV lost about 50% and October 2008 looked liked no bottom I ever seen.
Infact it looked like Silver goes way down from there. Position in SLV bought anytime during that bear would still be profitable btw.
Fast forward to today.
Buy low – sell high?
This is definitely low, it just have to slow down…
Specifically, I will not be buying today. All PM’s are facing margin liquidation which will happen after 2pm. We had it on Friday, and today futures traders are facing a total loss of their margin.
Rivers of blood!
Don’t get swept away…:-)
PS. Was it germans?
I think the German demand for their gold certainly has something to do with it.
Gotta get that supply back somehow…
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Um, I meant the title of your post. Pearl harbor – germans – japs?
But since you touched Germany repatriating their Gold, I have a theory. For one, if you know that several countries (not hedge funds) may be in position to sell gold in order to repay money they owe to you? Will you help them sell gold at highest prices to somebody else, or at lowest print directly to you?… and blah-blah-blah (add your favorite conspiracy theory).
But really I simply think that this support level was too widely watched, accumulated alot of stoploss orders and now we have a cascading effect. Gold-bugs suffered for too long, capitulating. May last for days-to-weeks, may be over tomorrow
We are looking at transfer of shares from weak hands to strong ones.
Oh, sorry! I see you are talking about the above headline….
That was a joke.. it’s from a famous comedy movie here in the States called “Animal House.”
You should rent it!
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oops
I was confused about the same thing. Because clearly you know your history better than to think the Germans not the Japs bombed Pearl Harbor.
You guys gotta start watching more classic American movies.
Ha, it’s a bit amusing, because “Animal House” is iconic in the U.S. It’s probably been seen by every US male under the age of 55 years old (I think it came out in 1979).
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CME hiking margins on gold and silver right in the middle of a massive sell off. No, we are not at all biased here. No sir…
And yet gold is rebounding mightily.
They want to make sure only the bigs can buy I guess.
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Jake, what’s your opinion on the gold conspiracy stuff i.e. http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/4/12_Former_US_Treasury_Official_-_Fed_Orchestrated_Smash_In_Gold.html
when Savage opened up his supposedly ‘unmonitored chat’ comment section, I wrote one comment poking fun at his constantly & without fail blaming ‘manipulation’ for gold falling and his subsequent wrong calls.
therefore he booted me from his service with insufficient refund
c’est la vie claire
Really? I am surprised at that.
I can talk to him for you if you like.
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appreciate the offer … but that’s ok … probably he was feeling the heat
He shouldn’t cut off your sub, however!
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he could have notified me of his not appreciating my dissent … I’m sure I got too sarcastic … I was tired of reading ‘manipulation’ in every report … I don’t see you blaming unseen forces for underwater trades
Senator Gint,
Thank you for the ‘buying on weakness number’ link.
I had been looking for that for awhile.
No problem… ask and I will try to find an answer.
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Jake, any thoughts on the “all-in sustaining cash flow” metric many of these miners are using now? Do you view that as their true cost of production or is it fancy accounting work?
On another note, ABX trading at late 90’s and early 2000’s levels, when gold was in the $400’s. Yes, production costs were much lower then, but this seems a little absurd. Just hedge funds blowing up and margin liquidations? Or what say you? Thanks for your observations as always Jake.
I think this kind of behavior is irrational… and an opportunity.
But wait for a swing low!
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Futures Magazine “How the Gold Market Was Crashed” http://www.futuresmag.com/2013/04/15/how-the-gold-market-was-crashed
http://thefundamentalview.blogspot.co.uk/2013/04/shedding-light-on-how-gold-market-was.html
Read this link too, don’t believe all you read on the internets.
thanks for the links, but something is going on.
Interesting… certainly gives one pause, doesn’t it?
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