Forget Prayer, It's Lamb Slaughter Time: A Rational Man's Response To All Time High Gold Shorts

Tyler Durden's picture




 

Two days ago we suggested that "they better pray there is no short squeeze." Today, following the just released latest CFTC Commitment of Traders data which showed that the Comex gold short position grew once again to a new all time high of 79,416 shorts, all prayers are now off. If we may be so bold as to we suggest, the time has come to upgrade to the sacrificial slaughtering of at least a lamb on the altar of Saint Ben, because even the tiniest hint of a forced cover will now result in the biggest rip your face off levered short squeeze seen in the history of the yellow metal. Maybe throw in an ink cartridge or two for good measure...

 

Short positions in gold have risen 25% in the last 3 weeks

 

Chart: Bloomberg

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Fri, 05/24/2013 - 18:50 | 3597243 OldPhart
OldPhart's picture

How can they lose?

It's all a rigged game anyway.

Fri, 05/24/2013 - 18:54 | 3597251 Say What Again
Say What Again's picture

I'll pay up to get a front row seat for this show!!!

Fri, 05/24/2013 - 19:20 | 3597316 bullionbaron
bullionbaron's picture

Which group of traders does the COMEX short position in the Zero Hedge article represent? COT report is here: http://news.goldseek.com/COT/1369424121.php

Fri, 05/24/2013 - 19:40 | 3597358 CitizenPete
CitizenPete's picture

yeah... What he asked.

Fri, 05/24/2013 - 20:08 | 3597428 AllThatGlitters
AllThatGlitters's picture

As one who tends to be a bit of a contrarian, I love seeing things like this. 

But I don't like seeing that others are seeing it.  Puts me in a quandary.

The chart looks horrible - http://www.pmbull.com/gold-price/

And several 1 ounce gold bars are still offered on that page for under $30 over spot.

That would normally be attractive to me, but then I pause and ask:

Why aren't the dealers seeing this obvious scenario?  Are they long futures as a hedge?

Wouldn't they normally be short as a hedge, to protect their inventory?

That short position is SO incredibly extreme now that I have to wonder if something is different and somebody is in the know?

- Oops, I said it.  That's my answer. Nothing is ever "different this time."  I'll buy and wait for the squeeze!

Fri, 05/24/2013 - 20:43 | 3597451 Manthong
Manthong's picture

Bring it, MF's.

the ad pains me, but the message is important..

http://www.youtube.com/watch?v=73OiRZf7DsM

 

this works, too..
http://www.youtube.com/watch?v=514IEcgz1Q8

Fri, 05/24/2013 - 21:14 | 3597558 UnpatrioticHoarder
UnpatrioticHoarder's picture

MF Global.... LOL OK I finally get the joke

Fri, 05/24/2013 - 21:24 | 3597580 philipat
philipat's picture

The Bullion Banks are net Long. The only question is will they be able to resist the temptation to scalp the Hedgies? Remember they need The Fed as the (Virtually only at present) source of profits from all the free money. Maybe the Hedgies know that and the bet actually is that the BB's will continue to help The Fed manipulate PM's downwards?

Fri, 05/24/2013 - 21:48 | 3597608 Manthong
Manthong's picture

At least it ain’t anything like Lunic Totalitairian Communist Monetarianists (LTCM)

Fri, 05/24/2013 - 23:00 | 3597763 markmotive
markmotive's picture

This is what lambs to the slaughter looks like...Rush hour in Toronto:

http://www.dapperplanet.com/2013/05/photo-rush-hour-in-toronto-like-lamb...

Fri, 05/24/2013 - 23:15 | 3597788 Manthong
Manthong's picture

geez.. wtf is that line for?

Fri, 05/24/2013 - 23:23 | 3597797 silverserfer
silverserfer's picture

gold going down cause the stock market is going up DERRRRRRRRRRRR! Lets short DERRRRRRRRRRRR! Jim Cramer DERRRRRRRRR! Whopner on at 2:30 its 2:15 got to find a tv yeah. DERRRRRRRRRRRRRRRRRRRR!

Fri, 05/24/2013 - 23:43 | 3597842 Manthong
Manthong's picture

was that going to a coin shop???

if so.. holy smokes...

Fri, 05/24/2013 - 23:57 | 3597861 strannick
strannick's picture

Meanwhile Inspector Clouseau Shill-Chilton just keeps shrugging his shoulders, ''manipulation and excessive short positioning is difficult to prove'''...

Sat, 05/25/2013 - 00:16 | 3597888 HulkHogan
HulkHogan's picture

I compared this chart to the price of gold over the same time. Every time the short interest went up, so did the price... except for this current move. I think gold is heading lower, unless a black swan comes to the rescue.

Sat, 05/25/2013 - 01:27 | 3597950 Pinto Currency
Pinto Currency's picture

 

If gold rockets and bonds collapse then it is time to shut down the financial system and call it market failure.

Time then to implement collectivism as the final solution.

The plan is to kill the dollar: https://www.youtube.com/watch?v=ILKolTI1s50

Sat, 05/25/2013 - 01:37 | 3597969 James_Cole
James_Cole's picture

Don't get why Tyler keeps bringing this up as if it's a good indicator? All it suggests is dangerous market - could move rapidly up OR down.

Sat, 05/25/2013 - 03:00 | 3598003 The Navigator
The Navigator's picture

Short it all you want - I know what real money is (Au Ag) and I know what bullshit is (paper fiat).

The truth will win out.

When?

When the elite have scared all the chickens out at the lowest price.

Fuck You Bernanke, Fuck you.

Sat, 05/25/2013 - 07:29 | 3598099 GetZeeGold
GetZeeGold's picture

 

 

Your grandkid's tax dollars at work.

 

Thanks Ben Shalom.

Sat, 05/25/2013 - 09:33 | 3598200 presk_eel_pundit
presk_eel_pundit's picture

It'd be nice if there was a chart going back 40 years so we could see the rise and fall in the 70's and early 80's.

Sat, 05/25/2013 - 12:45 | 3598426 TraderTimm
TraderTimm's picture

@James_Cole

I'll field this one.

Tyler has brought us some rather good articles over the years, but when it comes the minute wiggles of < insert trading vehicle >, his anchored bias is decidedly lower and never to the upside (Unless its something that supports an overly-down market thesis.)

While most traders realize this bias is dangerous to profitability (opportunities occur when markets rally OR decline) the ZH view is - its all going to shit, we really don't know when - so hell, lets just say its going lower, and if it pops, we'll just exclaim its a totally rigged piece of shit, and we'll move on to something about the Euro.

While I believe that financial markets are indeed in a sorry state, I find it rather offputting that every decline is siezed upon as "THE MOMENT", only to be casually forgotten when the disaster fails to pan out as planned. If anything, the chart being shown should be considered not just as a "crowded trade", but the alternate but never-discussed probability of "what if they are RIGHT".

We now return to the current thread of everything is doomed, already in progress.

Sat, 05/25/2013 - 13:47 | 3598515 James_Cole
James_Cole's picture

 

If anything, the chart being shown should be considered not just as a "crowded trade", but the alternate but never-discussed probability of "what if they are RIGHT".

But they have been right, short interest has been way up for a while and correct for the whole stretch.  No doubt people are looking at Tyler posting this and thinking 'great I'm gonna go buy a bar and then in a couple weeks these short positions will be creamed and the price will skyrocket and I'll be rich.' When I look at it I think 'wouldn't want to be holding physical with a chart like that, at least not in the near term.' 

 

Sat, 05/25/2013 - 15:48 | 3598668 Not My Real Name
Not My Real Name's picture

When I look at it I think 'wouldn't want to be holding physical with a chart like that, at least not in the near term.' 

For those with strong hands, near-term is irrelevant.

Sat, 05/25/2013 - 02:11 | 3597988 Pseudonymous
Pseudonymous's picture

He is simply an accomplice to the manipulation. He is the propaganda guy for the manipulating club. Deal with it. It doesn't change the basic fact that manipulation is unsustainable in the long run.

Sat, 05/25/2013 - 09:10 | 3598176 FranSix
FranSix's picture

Here is the exact location.  You can see that there is construction in the vicinity of Union Station, the corner of Front & Bay sts. which is directly across from the Royal Bank Plaza, even though this streetmap photo is somewhat dated:

http://goo.gl/maps/fHMuY

I think the post 'lambs to the slaughter' without any explanation or even disclosing the location is meant to be a cynical attempt to gloat at workers in the financial sector, who are presently under the gun being replaced by foreign workers overseas.

The Royal Bank was scandalized by summarily firing employees in favour of cheap foreign labour in India.

Sat, 05/25/2013 - 03:58 | 3598027 Jafo
Jafo's picture

How do you manipulate a trend?  I didn't think that was possible with present technology.  I thought that you could only accelerate the trend or retard the trend but that you could not change the trend until it was on time or on target (or both).

Sat, 05/25/2013 - 07:32 | 3598104 GetZeeGold
GetZeeGold's picture

 

 

Short real money with paper. Walk around back and buy the real stuff at discount prices.

 

Keep doing that until the whole system collapses......walk out smelling like a rose.

Sat, 05/25/2013 - 10:01 | 3598230 Crash Overide
Crash Overide's picture

It's a setup, follow the money...

Sat, 05/25/2013 - 08:07 | 3598122 spine001
spine001's picture

The market is so levered that when the correction comes people will struggle not to get squeezed out of their positions on margin calls and will need to sell gold like crazy to stay solvent. Cash during this brief transition will be at a premium and everything will deleverage. Those who survive the margin calls and are able to stay and stand the shit storm will experience an incredible ride up us CBs fight the deflationary wave. To cover their gold positions during the deflationary part of the incoming crisis they are using shorts. These guys are in another league with regards to taking risk with respect to most of us. They are playing with somebody else's money. For us the best we can do is keep our powder dry and be ready to take advantage of it.

Until next time,

Engineer

Sat, 05/25/2013 - 08:12 | 3598129 Ban KKiller
Ban KKiller's picture

You have been looking at the past to see the future...I agree. Even fiat works for a SHORT time after the "correction".

Sat, 05/25/2013 - 08:23 | 3598138 spine001
spine001's picture

Another thought that just came to mind is  that the value to compensate for the excess shadow credit and the value those who trade it right at kaximum leverage needs to come from somewhere (value redistribution) therefore whatever happens must hurt th3 big guys. There isn't enough value in the hands of the dam money. Not for the typebof correction thatt is coming. So watch out because either the hedge funds or large mutual funds will end up being on the wrong side big time.

Fri, 05/24/2013 - 20:19 | 3597454 idea_hamster
idea_hamster's picture

Someone needs to find a pic of Lambchop getting the business for this article -- sacrificial lamb + muppet = LULZ!

Fri, 05/24/2013 - 23:35 | 3597808 Manthong
Manthong's picture

Sheri was a neat person..  met her once... she is in peace with lamb chop now.

edit.. crap... like I figure most of the middle class will be,

Sat, 05/25/2013 - 03:18 | 3598014 putaipan
putaipan's picture

god bless j.p. patches and gertrude/stan can the animal man!

Fri, 05/24/2013 - 20:42 | 3597506 Quinvarius
Quinvarius's picture

It is never different.  It is the same as any industry short dogpile led by gs.  It ends in a rally.

Fri, 05/24/2013 - 20:50 | 3597514 SAT 800
SAT 800's picture

The Silver futures chart is even crazier. In thirty years of trading this stuff I've never seen anything like it. The total number of open positions, or active contracts, actually went up at a steeper angle than the price came down; for say, the last half of April, first half of May; like that. Crazy. I already bought a contract; I put in a Hail Mary order at $21.00 even; and it got filled. WTF. whatever. It'll be interresting.

Fri, 05/24/2013 - 21:14 | 3597559 KnightTakesKing
KnightTakesKing's picture

You gonna take delivery at 21?

Sat, 05/25/2013 - 00:05 | 3597875 fourchan
fourchan's picture

i picked up a hundred more ounces today, fuck the fed.

Sat, 05/25/2013 - 06:39 | 3598068 Manthong
Manthong's picture

FtFF..      F t Fed/Feds

that sounds like a nice acronym

Sat, 05/25/2013 - 11:49 | 3598337 jerry_theking_lawler
jerry_theking_lawler's picture

wow, that's a coincidence.....i picked up 100 million trillion ounces today......they promised delivery in six months.

Fri, 05/24/2013 - 22:35 | 3597716 dogbreath
dogbreath's picture

you need 10k more than the margin requirement

Fri, 05/24/2013 - 21:12 | 3597553 greatbeard
greatbeard's picture

From the Bloomberg article in your link:

'Bullion has tumbled 18 percent this year as some investors lost faith in the metal:"

Total, unmittigated, horseshit (no offense entended to horseshit).  That takedown wasn't "some investors" losing faith, it's was a planned take down by someone very powerful.  It was no loss of confidence but a play to try and make people lose confidence.  It isn't working.

 

 

Fri, 05/24/2013 - 21:21 | 3597576 CitizenPete
CitizenPete's picture

Definately a takedown

Fri, 05/24/2013 - 23:19 | 3597799 wee-weed up
wee-weed up's picture

Just like the Obama Admin lackey-IRS trying to take down the Tea Party groups...

Sat, 05/25/2013 - 06:49 | 3598070 Manthong
Manthong's picture

horseshit has utility value and can promote green sprouts..

unlike certain paper products contaminated with dictatorial crony ink.

Sat, 05/25/2013 - 10:03 | 3598234 greatbeard
greatbeard's picture

>> the Obama Admin lackey-IRS trying to take down the Tea Party groups...

Feh, one corrupted, self serving bunch of sociopaths attacking another.  Meaningless in the scheme of things.  I know there are good and decent folks in the TP, but in general, they are no  better than any other group in our country.  Same could be said of the OWS folks.  Give them the power the Obama administration has and they'll abuse it just the same.

Fri, 05/24/2013 - 23:24 | 3597813 Mrs. Haggy
Mrs. Haggy's picture

With all the chaos, sometimes you have to just stop and take a look around.  Survey the scene as you personally see it and not listen to anything but your own instincts.  Everyone that I know just keeps stacking;  nobody is even close to wavering, including myself.  I can't be spooked if nobody in my personal life is spooked.

Sat, 05/25/2013 - 07:34 | 3598076 fuckitall
fuckitall's picture

Look folks, with a printing press you can distort any market in your favor. 

They don't have physical to back their shorts, it's just a paper game, brain-dead sheeple will believe it, sheeple always get sheared, don't pity them, don't try to educate them, it's their fate. 

They're gonna kill the dollar, they said so, they're doing it.  As the dollar dies they must prevent masses fleeing to PMs, they've unleashed a tsunami of MSM negativity toward PMs along with their printing-press-fueled market manipulation. 

Sure they can pay off in dollars, they have boatloads of dollars available, contracts say they can pay off in dollars if needed. 

It's not about the metal, it's about the message, 99% will believe it, enough to keep PMs down while they finish killing the dollar and bring in their new currency whatever it is. 

The goal is prevent flight to PMs (and other commodities) during the transition, keep people's money in stocks, bonds, etc, where they control the exchange from dollars to whatever. 

They can't do that with PM holders nor any other commodity holders.  Those things will skyrocket when the dollar dies, unlike stocks, bonds, etc. 

Ok, stocks will rise, but bonds won't.  Bonds are X number of dollars, worth something, worth nothing, whatever, doesn't matter, dollars wlll be worthless when the new currency is brought in, yes bondholders will be royally fucked, why they're making bonds so attractive now, sucker sheeple in and shear 'em good in the currency exchange.

How much you wana bet those "excess reserves" parked at the Fed won't be parked there much longer?  How 'bout quietly turned into PMs?  One of their "other reasons" for keeping spot price down? 

Yes Fed's balance sheet will be worthless when the dollar dies.  So what?  They don't care.  It's just a game to them anyway.

Sat, 05/25/2013 - 09:43 | 3598214 lakecity55
lakecity55's picture

Yep.

My grandpa was born in 1900.

He collected Au and Ag in small quantities all his life. He left those to me. When he passed, the PM and numismatic values were higher than when he started. He never paid any attention to the markets concerning PMs (except he kept more Ag after 1964 cupro-nickel issuance).

I have done same. Now at 60, my stash is more valuable than when I started as a kid. I'm still looking for that 1909-S VDB, however.

The stash just grows and hopefully another set of kids will have it. It has been quite useful.

Ignore the markets, just

Keep Stackin!!

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