The Silver Signal Suggests Bottom Is In

"Unlike an animal, man is not told by drives and instincts what he must do. And in contrast to man in former times, he is no longer told by traditions and values what he should do. Now, knowing neither what he must do nor what he should do, he sometimes does not even know what he basically wishes to do. Instead, he wishes to do what other people do -- which is conformism -- or he does what other people wish him to do -- which is totalitarianism." … Viktor Frankl

GO GATA!

There is still a lot of nervousness in the markets after yesterday’s gyrations, especially in gold and silver. The Gold Cartel used many of their patented maneuvers the past couple of trading days to influence prices down, all except for one: PLAN A, which they saved for this morning…

Gold rose to $1583 when the cabal forces went to work. The price fell back to $1769 before rebounding again. As mentioned yesterday, the dropping price of silver yesterday was the tip off what The Gold Cartel had in mind for gold. Yet, when the price of gold flushed out its last $10 on the downside, the price of silver stopped going down. This morning silver was higher when gold was selling off and refused to go down anymore. Then its price rose to $27.26 before calming down. Gold followed silver up and went back to $1580.

Both gold and silver made modest new highs as the day wore on, but both retreated off those highs. All eyes seem to be on the FOMC meeting, so it’s time to wait before commenting further, except to say the results of the 10 yr T note auction were astonishing…

3:03 10-yr Treasury auction yields 1.459%, with bid/cover 3.61 vs average 3.05
Allotted at high 51.68%
Indirect participation 40.58% vs average 40.07%
Direct participation 45.41%
In reaction:
2-year (2/32) to yield 0.29%
3-year (1/32) to yield 0.37%
5-year +1/32 to yield 0.62%
7-year +8/32 to yield 0.94%
10-year +13/32 to yield 1.46%
30-year +30/32 to yield 2.56%
Dow (37.84) to 12,615.28

* * * * *

* * * * *

* * * * *

,
If anybody needs further evidence why gold predominantly sells off from the London AM fix to the PM fix, or why gold seems to suddenly get weak around 9:00 AM NY time this should be helpful. This is from the onlygold.com site, with their take on the matter:

""our entire PM forex future position is locked and JPMorgan is liquidating our position at a loss without our consent"

"This London P.M. or afternoon fix gold spot price, actually is set during the U.S. morning, about 9:00 A.M. Eastern Standard Time. The London P.M. fix, of all the gold spot prices, is the price at which the world’s largest size gold purchases and sales are accomplished on any given day.

This is the one price of gold in U.S. dollars which is quoted daily, and familiarly, around the world

. During the U.S. trading day, we do business based on the latest Comex spot gold price."

There is no doubt that the 2 biggest, most watched barometers of inflation expectations are the London PM fix and the Comex pit close. These are therefore heavily managed, and hence the feeble PM fixes and the 1% rule for Comex sessions. Whenever all eyes are watching the cartel is there there to pressure longs and obfuscate reality.

Speaking of pressuring longs I also did a cursory examination of post-Thanksgiving trading since 1998. There were no surprises here either, gold almost always gets bullied. Out of the 14 year period 9 years were either down, or unchanged, and 5 years were up. The total losses for the 9 years was a cumulative -$80.10, while the cumulative gains for the other 5 years was only +$25.65. Even that is misleading, as one year alone (2007) accounted for nearly HALF of all gains in that 14 year post-Thanksgiving period. You would have never known gold rose 650% from 1998 to 2011 if all you had to look at was post-Thanksgiving trading at the Crimex. Thanksgiving has been primarily a "Rubin" turkey sandwich with all the fixes.
James Mc

An FYI for you from Lois…

As I mentioned yesterday, PFG Precious Metals is under the umbrella of PFG Best.

I have just finished listening to a video featuring Lauren Lyster. Starting at the 6:00 timeline of the video she speaks with the CEO Christopher Olsen of Treasure Island Coins who has dealt with PFG for years. He is a Physical Metals dealer.

He explains very thoroughly what went on yesterday regarding the Physical Metals and how they were effected. Almost needless to say, he explains JP Morgan involvement in what happened.

At 09:30 on the video you will hear -

Most widely quoted gold spot price : The 2nd London fixing.

As there was no direct reference to QE coming, the prices of gold and silver were predictably slammed. Gold fell to $1566 and silver to $26.76 due market disappointment. Both of which were new lows for the day. SO interestingly enough, silver turned right around again to go positive. Yesterday, the terrible price action in silver foretold what was coming in gold. The way silver (up 10 cents over that Comex close) is trading now with gold down $11 lower than yesterday’s Comex close tells me we are seeing the worst of it today and that tomorrow gold and silver should move back up.

In some ways this FOMC meeting material is old news in that three of those Fed Governors were just out there yesterday talking about more stimulus being needed. It would be typical of The Gold Cartel/JPM to have been informed of the FOMC material in advance. Thus, they sold yesterday and are most likely buying back today as spec longs pitch their positions.

James Mc…

Turkey with all the "fixes"

Bill

14:08 Follow-up: Fed Minutes indicate that a few members thought more stimulus was still likely necessary -- 19-20 June meeting

The latest minutes noted that "almost all members" again agreed to indicate the FOMC expects conditions to 'warrant exceptionally low levels for the federal funds rate at least through late 2014'
The lack of any commentary on potential QE3, which is what the market had hoped would be discussed, is causing a negative reaction in stocks
Dow has moved down about 45 points since the release, and is now (80) pts to 12571
€/$ is lower; last 1.2216
10-yr yield 1.50%

The gold open interest rose 2493 contracts to 429,854, which tells us the main reason for yesterday’s price reversal to the downside was what The Gold Cartel set in motion. Had it been mostly due to liquidation of long spec positions at PFG Precious Metals the open interest would have fallen, and sharply so to account for the kind of action we saw in gold yesterday to the downside.

The AM Fix was $1576.50 and the PM Fix was $1577.

The silver open interest went up too, plus 1754 contracts to 124,109.

The FMOC minutes just came out…

14:00 Fed Minutes indicate that a few members thought more stimulus was still likely necessary -- 19-20 June meeting