Saturday, December 3, 2016
Joined Apr 19, 2009
721 Blog Posts

$1,400 is Key Here

Gold shorts

The 1,350 to $1,400 area is going to be important here.   We banged against $1,400 a couple of times over the past two days and were not able to surpass it until this  early this morning, when we had a quick break and then a jet to over $1,420.  There was a lot of selling into that break, and so a retest of $1,400 will be increasingly important to see if this will be a failed bear flag or an actual recovery from the recent oversold condition. 

We are as of this writing, trading at $1,407.

There is a possibility that we could snap back extremely hard on this recent down-plunge.  There are stories all over the internet about large physical purchasing going on.  This could be anecdotal (well, it IS anecdotal), or it could reflect the difference between the paper and physical markets.   If the last couple of days action was a desperate move to combat an imminent physical delivery problem (as some have speculated), we could see a torching of the shorts like none have encountered since early 2009.   Stay vigilant and nimble here.


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  1. JakeGint

    Tested once already… circa 9:30 am.


  2. Hawaiifive0

    Testing now @ 12:00 am.

  3. Hawaiifive0

    or pm.

  4. drummerboy

    try to buy some phyzz on wed. he doesnt know when the shortage for ase’s will subside,if ever for a while.walked away with a bunch of pre 64’s 1.1 oz for 19 bucks and no premium.he’s never seen it like this,and he has been in the community for 4 decades……paper is pulling away from phyzz,and no one can keep or get any stock,this could close these small dealers,just like the only gun shop in my village,which is in crook county also,and very controversial,shuttered it’s doors just this week…………cant get we go senator, if these arent red flag signs,i don’t know what the hell do you pay 60 smackers for an ase.wild.

  5. HitTheFan

    For those holding physical, further downwards price movements would be most welcome.

    The lower the gold price goes, the more strain there is on the paper markets. Mines will stop production. Buyers will be out in their droves.

    Sadly, I don’t think now is that time, we have a few more years of ‘normal’ bull market stuff, before the final separation I reckon.

    Note to silver buyers…the East and central banks only want gold. Silver purely an industrial metal, and where is the global economy headed….?

  6. Obummer gonna win
    Obummer gonna win

    I recall when silver went from $50 to $40 in 2 days, there was the same issue with physical silver. The reason for it is simple. Dealers don’t want to sell their physical metal when it could pop right back up again.

    The point is that it “could.” As with silver at that time, gold will falter.

  7. the man

    who the fuck really knows how much physical demand is really there. fucking no one, that’s who

    • drummerboy

      so lets see it’s been a good three days since you just posted this comment.and physical is quite hard to come by.there is so much demand,right now,it’s unbelievable. when the price for silver is double what spot is,well,you can take it from there is all i got to say.

  8. TJ

    Hi Jake, do you think now it’s safe to add RGLD here, means it turn around, or wait to see ? Thanks.

    • Jakegint

      I don’t think it’s going to be “safe” until it retests at least once and is back above $65 a share. That said, I don’t have a problem with putting in a starter here, with a stop below the lows.


  9. Hawaiifive0

    What about GDX, GDXJ and SIL? Safe yet? So far I have only LEAPS.

  10. ultramarine

    I’ve started a small position in SLV at $23.14. I’m hoping for mean-reversion up to $24.74 or $25, perhaps the 20-day SMA. Appears short-term support is $21.96 or so.

    • ultramarine

      Hah, so much for mean-reversions. I wish I had read Chess’s bear-flag article on the miners first.

  11. ultramarine

    Welp: Goldman Sachs has removed their short-recommendation on gold, per today’s Bloomberg article:

  12. ultramarine

    Sold my silver (SLV) for a 1% gain. It didn’t bounce back quickly as I had hoped, and appears to be holding in a narrow range, like before the last big drop. I planned this as a very short-term trade.

  13. Jakegint

    Tomorrow will be the test. Going through $1500 would be critical.