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Silver & Gold Surge On POMO; DeMark Tells Santelli "Big Move Coming"

Tyler Durden's picture


Despite numerous "13s", infamous technical analyst Tom DeMark tells Rick Santelli, the Fed's liquidity pump has negated every one of these 'potential sell' signals and stocks have "unusually" kept going. DeMark goes on to note several analogs and trendlines that look extremely familiar; warning that the convergence of all these signals is notable and suggest "something comparable to 1929". Unable to get a word in edgeways, Santelli is more intrigued by DeMark's call on precious metals as he notes with downside limited, there is "a big move coming" for gold to the upside in 2014. Precious metals prices started to accelerate as POMO started (and again when it ended) and are extending the gains post DeMark (Silver +4% from early lows).


DeMark on the equity market analogs and Gold's coming big move...


As we noted previously, the Ghost of 1929 is re-appearing in many signals.



and the longer-term trendlines are converging...unless... it is different this time...


Precious Metals are shifting notably today with Silver surging 2.7%!


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Mon, 12/16/2013 - 13:47 | 4250924 Tinky
Tinky's picture

A big move coming in gold in 2014? Wait – I'm utterly confused. Our own, recently appeared ZH PM guru Satoshi has repeatedly warned of a further decline in gold prices.

Very confusing indeed.


Mon, 12/16/2013 - 13:50 | 4250927 Herd Redirectio...
Herd Redirection Committee's picture

I hope everyone remembers to check for tungsten this Christmas!

Mon, 12/16/2013 - 13:54 | 4250949 DoChenRollingBearing
DoChenRollingBearing's picture

Buy gold!  With FIAT$ or with BTC!

Even the mainstream money managers are OK with 5% of assets in physical gold.

Yet, how many Americans actually own investment (non-jewelry) gold?  1% is the number I have seen the most before.  

Join the 1%!  Be your own central bank!  Buy gold!

Mon, 12/16/2013 - 13:56 | 4250954 malikai
malikai's picture

Gold's looking pretty strong today.

Mon, 12/16/2013 - 14:04 | 4250975 knukles
knukles's picture

Well, the one thing that might mess up the gold rally is the Obiecare concern, which is the irresponsible over use of the system by an uneducated public which will drive up costs for those who have to pay for the subsidy of others!.
Why just the other day, a
woman goes to the hospital.
"What seems to be the problem?" asked the doctor.
"Something is terribly wrong; I keep finding postage stamps from
Costa Rica in my vagina."
The doctor looks and says, "Those aren't postage stamps, they're the stickers off your bananas"





Mon, 12/16/2013 - 14:09 | 4250998 Alea Iactaest
Alea Iactaest's picture

Just one thing? USD strength would do it, too. Of course if I was living in Euro-land I might seriously consider loading up, what with the coming IMF (non) confiscation and the potential for some serious devaluation when the ECB starts printing. Or there's a soveriegn default (impossible, I know) which triggers a margin call or twenty and the whole rehypothecated house of cards comes tumbling down.

Happy 2014!


PS - Greenie for making me laugh.

Mon, 12/16/2013 - 14:24 | 4251044 BaBaBouy
BaBaBouy's picture

SWITCH Time From Virtual CoinBits, To Real Metal???

Just Askin...

Mon, 12/16/2013 - 14:33 | 4251090 Keyser
Keyser's picture

Someone heard you as bitcoin is down this morning and gold/silver are up. 

Mon, 12/16/2013 - 14:37 | 4251106 kralizec
kralizec's picture

Fucking pop up ads are way the fuck up!

Mon, 12/16/2013 - 17:18 | 4251764 MeelionDollerBogus
MeelionDollerBogus's picture

I can't see any.
adblock + noscript + firefox = doesn't happen

Tue, 12/17/2013 - 00:42 | 4253001 13thWarrior
13thWarrior's picture

Add Self-Destructing Cookies Extension as well.

Thu, 12/19/2013 - 01:34 | 4253216 MeelionDollerBogus
MeelionDollerBogus's picture

ooooh sweet, didn't know about that one. I'm about to embark on messing with ssh + foxy proxy in a bit too (as shown by

* edit: just installed it. Works like a dream, thanks for the tip

Mon, 12/16/2013 - 17:33 | 4251827 Greenskeeper_Carl
Greenskeeper_Carl's picture

firefox+ghostery for me. also, no popups. ever

Mon, 12/16/2013 - 16:03 | 4251457 Atlasshruggedme
Atlasshruggedme's picture

Metal is always better then bitcoin. Keep in mind that until bitcoin is welcomed at your local Target and Liquor store, its real value is hidden. Take your gains and buy real metal. But never hurts to leave a bit in the coins incase the Fait tanks.

Mon, 12/16/2013 - 14:55 | 4251162 BandGap
BandGap's picture

Barely disgusting enough to be shared.

Mon, 12/16/2013 - 17:18 | 4251755 MeelionDollerBogus
MeelionDollerBogus's picture

That's mah knucks, always raising the bar!

Mon, 12/16/2013 - 15:47 | 4251379 rodocostarica
rodocostarica's picture

And Fonestars portfolio is getting hammered.

Mon, 12/16/2013 - 14:04 | 4250983 cro_maat
cro_maat's picture

I'm diversifying into Bearings! I just put 2 into the forks of my CB 200 that I am rebuilding with my sons and I may need 4 more for my long board.

DoChen - I consider you the CB of Bearings. Are you a Bearing Mint and what premium do you charge for being the official bearing diversifier on ZH?

Mon, 12/16/2013 - 14:10 | 4251001 max2205
max2205's picture the fucking dip

Mon, 12/16/2013 - 16:01 | 4251440 DoChenRollingBearing
DoChenRollingBearing's picture

Diversification is a good thing!  Bearings made of 52100 steel count.  Especially in another country (Peru).  

DoChenRollingBearing charges nothing for opinions here on Zero Hedge.  As the old joke goes:

"Everyone is entitled to my opinion!"

Mon, 12/16/2013 - 17:14 | 4251744 MeelionDollerBogus
MeelionDollerBogus's picture

is this a confirmation you actually got physical gold delivery using btc?

I've been curious to see how your experiment went.

Mon, 12/16/2013 - 18:10 | 4251950 DoChenRollingBearing
DoChenRollingBearing's picture

Not yet, but I have reason to believe it will be soon.  I will announce it very publically, whether I get the Au, or whether I get the "Dumbass of the Month" award...

Mon, 12/16/2013 - 14:02 | 4250969 superflex
superflex's picture

Unless you have ultrasonic equipment or are willing to drill your bars, that aint gonna happen.

XRF is only good for the first milimeter or two.

Mon, 12/16/2013 - 14:55 | 4251169 BandGap
BandGap's picture

I don't think XRF even works that deep.

Sound should work, the layers will reflect sound at the interface.

Mon, 12/16/2013 - 17:15 | 4251740 MeelionDollerBogus
MeelionDollerBogus's picture

conduction test & magnetic slide test.
Tungsten can't replicate gold's properties in this regard and it's not just surface deep.

Mon, 12/16/2013 - 14:25 | 4251057 Papasmurf
Papasmurf's picture

Our own, recently appeared ZH PM guru Satoshi has repeatedly warned of a further decline in gold prices.

I thought Shitaso had been discredited by ZH members and considered a contrary indicator now.

Mon, 12/16/2013 - 14:34 | 4251097 Keyser
Keyser's picture

Correct, just like GS and JPM. Do whatever they say no to do. 

Mon, 12/16/2013 - 15:39 | 4251336 BigJim
BigJim's picture

Hell no! 'Shitaso' has given tremendously valuable advice - like, buy timberland in the Pacific NE for $200 an acre, sit back, and you'll make a fortune when you sell it for £10,000 an acre!

His other smart observation is that if you can get gold at around $800 an ounce... well, you could make a killing!

The man is an ace arbitrager, that's pretty clear.

Mon, 12/16/2013 - 19:10 | 4252147 Catflappo
Catflappo's picture

If he is indeed 'right' about stocks, then it looks like they need to rally a further 25% into January before they crash.

So S&P500 @ 2250, here we come?

Wed, 12/18/2013 - 15:15 | 4258056 papaclop
papaclop's picture

Just buy the metals. Since'08 the Fed's balance sheet has gone from $800 billion to $4.5 trillion. Its just a matter of time before the metals go nuts.

Mon, 12/16/2013 - 13:49 | 4250925 SAT 800
SAT 800's picture

It's a plausible thesis. The problem for the metals is the ETF's. When people de-invest in them it releases supplies on the market; I've been surprised at the relatively small price reverses caused by the net ETF sell offs in 2013; so far, the market is resilient. Un-fortunately it's always impossible to predict whether recent "floors" in prices will hold up or not.

Mon, 12/16/2013 - 13:51 | 4250938 Winston Churchill
Winston Churchill's picture

Opex tomorrow.Overnight slamdown.Got to keep it down until year end.

Mon, 12/16/2013 - 14:17 | 4251024 InjectTheVenom
InjectTheVenom's picture

tomorrow ?     you sure  ?     check your date  (and plz correct me if i'm wrong, thanx !)

Mon, 12/16/2013 - 15:05 | 4251208 tenpanhandle
tenpanhandle's picture

GLD never held the supply it purported to have.  It was largely a demand sponge. IMHO any real gold has already been redeemed and now it is a purely paper proposition.  Like Ft Knox GLD has no GOLD.

Mon, 12/16/2013 - 13:48 | 4250929 Strider52
Strider52's picture

I've been hearing this rally-cry for months now. The Monkey Hammer always wins. Until it doesn't, which could be years away.

Mon, 12/16/2013 - 14:00 | 4250962 Platinum
Platinum's picture

True, and I'm going to continue to buy like a banshee until that day comes.

I sense a PM run early in the New Year.

Mon, 12/16/2013 - 16:09 | 4251475 DoChenRollingBearing
DoChenRollingBearing's picture

FOFOA says buy as much physical gold (which I would extend to platinum, but that's me, NOT FOFOA) "as you understand".  I buy as money comes in.  There is no harm in buying gold whenever you can.

Mon, 12/16/2013 - 14:16 | 4251038 Sleepless Knight
Sleepless Knight's picture

Time to Spank the Monkey!!

Mon, 12/16/2013 - 14:21 | 4251054 Yardfarmer
Yardfarmer's picture

uh, not so fast Strider.

The large U.S. bullion banks have been net long gold futures since June. Now the entire Producer Merchant class of traders is collectively net long gold futures. Incidentally a new Bank Participation Report is due out Friday for Tuesday positioning.    

So what do we make of the facts above?  Something has changed in the view of the largest traders of gold futures.  Gold has been sold down long enough and far enough that the gold trade itself suspects it has little in the way of downside left.  Are they right? (They certainly were in 2008.)

And, is gold about to work its way back up to a point where the Producer Merchant net hedge position can return to where it seems “comfortable?” – Back to the range of between 140,000 and about 200,000 contracts net short? 

If so, both gold and the Producer Merchant net hedge position have a lot of chart real estate to cover.  The charts above strongly suggest that the gold trade is expecting such a reversal too.  The question is not if, but when. 

- See more at:

Mon, 12/16/2013 - 15:01 | 4251186 cro_maat
cro_maat's picture

JPM brokers are now telling their best clients to buy physical gold. My bullion dealer on Wall Street sold 55 Gold Eagles for $70K in cash on Friday to a JPM client. Other clients are now showing up to buy physical as well!

Mon, 12/16/2013 - 15:29 | 4251307 tocointhephrase
tocointhephrase's picture

I guess they would get the axe if they were advising clients to buy physical silver

Mon, 12/16/2013 - 15:10 | 4251233 tenpanhandle
tenpanhandle's picture

Didn't you read Knuckles up above Strider?  Monkey Hammering is weakening. The monkeys are starving because the bananas are starting to smell fishy to them.

Mon, 12/16/2013 - 13:53 | 4250931 SheepDog-One
SheepDog-One's picture

'Analyzing markets of the past decades'....I completely ignore this, as long as the FED has it's hooks in everything manipulating every last thing I'm not holding my breath for any 'big PM moves' anytime soon except maybe for 'down'. Fughedaboudit.

Mon, 12/16/2013 - 14:42 | 4251134 kill switch
kill switch's picture


We can ignore reality, but we cannot ignore the consequences of ignoring reality..Ayn Rand



Fiat always goes to zero!!!! Keep Stacking_ SheepDog-One.... I also suffer a little from collapse fatigue,  but it will come, as dark clouds are forming.

Mon, 12/16/2013 - 15:47 | 4251364 Captain Kink
Captain Kink's picture

taper of any kind slams gold to new lows below 1200...perhaps as low as 900, depending on pace of taper.  no taper and we rally to 1450-1500, and fairly quickly

seems pretty clear that a straddle is the way to play, short term.


long term, own Phys

Mon, 12/16/2013 - 13:53 | 4250937 Magnix
Magnix's picture

Its about time!

Mon, 12/16/2013 - 13:53 | 4250939 ParkAveFlasher
ParkAveFlasher's picture

Wake me when...when...oh don't bother waking me.  The hell with it!

Mon, 12/16/2013 - 13:51 | 4250941 arkel
arkel's picture

But POMO has been going on for while. What changed today? In any event, my gut tells me this up move will be negated with some overnight selling. 

Mon, 12/16/2013 - 13:53 | 4250944 fonzannoon
fonzannoon's picture

Between this guy, a guy named Turd and the bitcoin rally it seems assured the stars have aligned for gold. Also my dog took a shit on a gold colored candy wrapper today. 

Mon, 12/16/2013 - 13:57 | 4250956 Meat Hammer
Meat Hammer's picture

Soft-serve consistency = bullish for gold

Solid log = bearish for gold

Either way you look at it, you'd be about as right as these "experts".

Mon, 12/16/2013 - 14:10 | 4251002 Tinky
Tinky's picture

At the risk of being pedantic, was it an OhHenry! bar wrapper?

Mon, 12/16/2013 - 14:37 | 4251107 Kilgore Trout
Kilgore Trout's picture

Hundred Thousand Dollar Bar or Payday?

Mon, 12/16/2013 - 14:23 | 4251064 TeamDepends
TeamDepends's picture

If it is a Golden Retriever count us in.

Mon, 12/16/2013 - 13:56 | 4250945 Meat Hammer
Meat Hammer's picture

DeMark is wrong.  Any surge in gold will get the immediate fury of the monkey hammer a-la millions of ounces sold in milliseconds. 

ZH, I love and hate you.

Mon, 12/16/2013 - 14:10 | 4251005 angel_of_joy
angel_of_joy's picture

Paper "ounces", that is. Same substance as USD bills... and about the same usefulness.

Mon, 12/16/2013 - 15:01 | 4251187 BandGap
BandGap's picture

One of these days there will be nothing to counter-attack with. Methinks the lines are getting thin to hold this part of the dam back. The time is fast approaching where TPTB will have to define and refine their daily beatdowns. Whack-a-Mole has allowed the moles to reproduce.

Mon, 12/16/2013 - 14:10 | 4251016 max2205
max2205's picture

Down n 10% tuesday pre market for the metals....stick to coffee for now

Mon, 12/16/2013 - 13:57 | 4250953 bks
bks's picture

The day no one on Zero Hedge mentions gold is the day I buy some.



Mon, 12/16/2013 - 14:02 | 4250973 Quinvarius
Quinvarius's picture

You will buy gold much higher.  You will overpay when you do.  You will still come out a winner in the end.

Mon, 12/16/2013 - 14:26 | 4251072 eclectic syncretist
eclectic syncretist's picture

When so many are down on it, I will continue to buy.  JPM has only 70,000 registered ounces left at COMEX now

Mon, 12/16/2013 - 14:01 | 4250959 Tinky
Tinky's picture

The real real story is not any $25 bump up or down in price, but the fact that the manipulators have been unable to push it down below $1200. There have been repeated attempts, and they have all been thwarted.

So, while that is not to say that gold's value cannot, or will not drop below $1200 in the near term, it is a strong sign that the power of the manipulators to push the price down has probably reached its practical limit. And, needless to say, that is quite bullish for future prices.

Mon, 12/16/2013 - 14:02 | 4250970 Meat Hammer
Meat Hammer's picture

I kindly disagree.  I don't think they've been unable, I think they've been unwilling.  If they were to shit on the price and take it down below, say, $1,000, people would be buying with both hands.  I think we're going to see small ups and downs as TPTB make millions in milliseconds going long and short for quite some time.  

Mon, 12/16/2013 - 14:09 | 4250990 Tinky
Tinky's picture

That's a very peculiar perspective, given that bullion has been selling like hotcakes all along this downdraft. There are many reasons why it would benefit TPTB to see gold under $1200 (let alone $1000), and yet they have been unable to keep it at those levels.

The willingness is there, all right, but their power is diminishing.

Mon, 12/16/2013 - 14:15 | 4251027 Meat Hammer
Meat Hammer's picture

I shirley hope you're right, Tinky.  

Mon, 12/16/2013 - 16:17 | 4251498 MeelionDollerBogus
Mon, 12/16/2013 - 14:06 | 4250991 samcontrol
samcontrol's picture

so wHy is your crystal ball better than mine? range bound heh? jjaja.

mine says we don't go sideways as you suggest for sure...It's way
up or way down.

Mon, 12/16/2013 - 14:10 | 4251007 fonzannoon
fonzannoon's picture

It will be below $1,150 this time next year. 

Mon, 12/16/2013 - 14:23 | 4251067 kito
kito's picture

tulips will be regulated as currency next year.

Mon, 12/16/2013 - 14:34 | 4251100 Clowns on Acid
Clowns on Acid's picture

fonz - how can anyone look 1 year ahead and make a forecast on anything financial when all know it is a binary Fed decision.

Does the Fed:

  1.  Continue QE. PM's get bid. Gold to test 1500, if Fed loses control of Bond mkt.. GLD to 1800.
  2. Not continue QE, with mthly 10-15B / mth taper. Gold to 900. 
    • Fed reinstitutes QE because of falling asset prices. Gold from 900 to 1500. See # 1.
  3. Fed accepts lower growth and lower asset prices. S&P to 1250, Gold to 850.


Mon, 12/16/2013 - 15:01 | 4251198 samcontrol
samcontrol's picture

change 1500 to 1900 and i,ll agree.

Mon, 12/16/2013 - 18:35 | 4252034 bombdog
bombdog's picture

3. Fed accepts something that makes it impossible for the US Government function. Bond market dies. Dollar Dies. Unless of course they find an asset to back the dollar to restore confidence... hmm... let me think... nope they sold all the gold to the Chinese for all the worthless dollars that came back home. Game over. Civil war.

Mon, 12/16/2013 - 14:37 | 4251113 Keyser
Keyser's picture

Based on what analysis or is this just crystal ball?

Mon, 12/16/2013 - 14:49 | 4251150 fonzannoon
fonzannoon's picture

I base this on the fed having gained control of the markets. they are the not so invisible hand now. so if i were the fed i'd take another 10% off gold. I'd put the 10yr around 3.25% and i'd ramp up the S&P another 15% next year.

everyone in every other asset class including cash will continue to feel the pain until they join the party.

forget about JPM and their net long crap. it means nothing

Mon, 12/16/2013 - 15:04 | 4251211 Bay of Pigs
Bay of Pigs's picture

How can miners stay in business operating well below production costs? They have lost billions the last two and half years.

Another entire year of increasing losses?

Mon, 12/16/2013 - 15:12 | 4251247 fonzannoon
fonzannoon's picture

BOP the miners are happy eating shit. So they will probably continue to. The smart ones will hedge by shorting the shit out of the papoer markets, they should be doing this already.

Mon, 12/16/2013 - 18:27 | 4252017 bombdog
bombdog's picture

It's true the miners have never been as clever as Wall street banksters, but since they were already short via a hedge book what possible use would there be getting shorter? Earth to fonzanoon... to sell something you have to own it first. To mine it and sell it you need a profit. Those paper markets are a derivative of the real thing - and if there aint no real thing then there aint no derivative.

Mon, 12/16/2013 - 19:09 | 4252145 fonzannoon
fonzannoon's picture

LOL yeah earth to me. Buy those miners my man. Go get em.

As far as them not being clever, earth to bombdog, they are an extension of the cartel.

Mon, 12/16/2013 - 16:13 | 4251494 MeelionDollerBogus
MeelionDollerBogus's picture

maybe certain governments will buy them up for pennies, closed, instead of "nationalizing" except it is by another name.

Mon, 12/16/2013 - 18:20 | 4251996 bombdog
bombdog's picture

And after that? Isn't that the same stupid ass idea the Fed had anyway? Don't forget there are actually rational investors out there making rational choices as the real economy is dying. You think dollar holders aren't rational people watching these clown motherfuckers doing exactly what you are talking about for the last 5 years? The Fed has painted itself into a corner and people notice these things, even if the QE crackhead junkies don't.

Mon, 12/16/2013 - 14:54 | 4251158 Crash Overide
Crash Overide's picture

"It will be below $1,150 this time next year. "


...and after the fiat collapse $1,150 could buy you a house.

Mon, 12/16/2013 - 16:11 | 4251484 MeelionDollerBogus
MeelionDollerBogus's picture

not quite. More in the range of 2500 to 3000.

Mon, 12/16/2013 - 14:07 | 4250992 samcontrol
samcontrol's picture

so wHy is your crystal ball better than mine? range bound heh? jjaja.

mine says we don't go sideways as you suggest for sure...It's way
up or way down.

Mon, 12/16/2013 - 14:13 | 4251020 Meat Hammer
Meat Hammer's picture

It's just a hunch based on the ups and downs we've seen this year.  

Mon, 12/16/2013 - 15:04 | 4251206 samcontrol
samcontrol's picture

tell that to my miners .

Mon, 12/16/2013 - 14:01 | 4250960 PeeramidIdeologies
PeeramidIdeologies's picture

Something to be considered is that although the Fed excludes food and energy from core CPI, gold is taken into account.
Must maintain 2% somehow....

Mon, 12/16/2013 - 14:03 | 4250967 ebworthen
ebworthen's picture

C'mon 1929 and 1932!

Mon, 12/16/2013 - 14:27 | 4251081 eclectic syncretist
eclectic syncretist's picture

Note that the scales for the two bull markets aren't normalized.

Tue, 12/17/2013 - 23:52 | 4255931 slvrizgold
slvrizgold's picture

Yeah, but they're not to far apart with regard to scale.  And I'll bet the average PEs and yields today are as bad or worse than 1929.   

Mon, 12/16/2013 - 14:08 | 4250972 Bryan
Bryan's picture

If there are predictions of a market downturn in mid-Jan 2014, then I will predict here and now that the Fed with throw everything it has at the market before then to attempt to disprove the theorists and quiet the sheep.  It won't work of course, but expect it anyway.

Mon, 12/16/2013 - 14:42 | 4251126 Keyser
Keyser's picture

Q4 2013 corporate earnings have been guiding lower and are going to suck big time. I don't think the Fed has the ammo to turn around sentiment once confidence is lost. Especially considering the big guns with hair triggers to sell at the hint of a market move. 


Mon, 12/16/2013 - 14:03 | 4250977 samcontrol
samcontrol's picture

besides the manipulation i just can't help feeling this Rubber is streched way to far...

$50 silver is inevitable . At this point i don't care when. I'm "guessing " sooner rather than later..
sprott funds with no PREMUIM now , are cheap. PSLV is "la no brainer " trade at these levels. My idiotic 2 cents.

Mon, 12/16/2013 - 14:26 | 4251077 eddiebe
eddiebe's picture

Sure, silver will be $50., it's just that the dollar will be worth a nickel.

Mon, 12/16/2013 - 15:24 | 4251274 tenpanhandle
tenpanhandle's picture

You got that backwards.  A nickel will be worth a dollar.

Wed, 12/18/2013 - 00:04 | 4255968 slvrizgold
slvrizgold's picture

Look at a Morgan dollar.  Count the grains.  That's what a dollar is.   It's not even one ounce.   Less than one ounce of silver used to buy a LOT of stuff.  And it will again.  It won't take a decade I guarantee that.   Right now the amount of silver in a Morgan dollar buys a cheap pizza or a dinner for 2 at McDonalds.   SILVER IS WAY UNDERVALUED.   A 100 oz silver bar will buy a decent car in the future.   1000 ozs of silver will buy a nice house in the future.   

If you had 1 million dollars you could take delivery of 50,000 ozs RIGHT NOW.   Do you know how much silver that is and how hard it is to move 50,000 ozs (that's over 1.5 TONS!)   It's a LOT.   There are millons and millions and millions of people with "millions of dollars" but I bet the number of people with 50,000 ozs is small enough to fit inside high school basketball gym.  

SILVER IS UNDERVALUED, OVERSOLD, AND UNDEROWNED.   Whether the next $5 move is up or down does not change this fact.

Mon, 12/16/2013 - 14:33 | 4251091 Papasmurf
Papasmurf's picture

How much of Sprott's own cooking is Eric eating?  He was out of PSLV earlier last summer.

Mon, 12/16/2013 - 14:09 | 4250982 Hongcha
Hongcha's picture

We will bump along around the bottom here, perhaps for years.  Production costs is a fairly hard-set bottom one would think.  Here is another way to look at it - if PMs have lost all their cachet, all their mojo, then they have been reduced to nothing more than expensive electronic components; in which case they are just another commodity and a price more or less at the cost of extraction and refining is the bottom.

From what I hear, Ag actually gets consumed as a component and is far less cost-effective to try to recycle.  I personally am going to buy both at every opportunity although sadly I failed to get my wife to agree to put 5% of our cash into gold bullion.  Not too happy with that but so it goes.

If one is pessimistic enough to believe that the price is going even below production costs, why not sell everything you have?  You are a beaten animal.  Ahmad and Xiang at that CASH-4-GOLD sharing space with the hairdresser down the street, will be happy to take it off your hand.  Ahmed and Xiang represent billions of foreign people on the other side of earth who feel differently than you.

Mon, 12/16/2013 - 14:10 | 4251000 samcontrol
samcontrol's picture

name anything range bound for years ????!!!!

Mon, 12/16/2013 - 16:14 | 4251490 Herodotus
Herodotus's picture

Why don't you tell your wife that you want to put 5% of your cash into gold jewelry but you need her help to pick it out. 

Wed, 12/18/2013 - 02:49 | 4256250 slvrizgold
slvrizgold's picture

I was starting to thumbs down ya Hongcha, but when I read it all the way thru I flipped it up.

Mon, 12/16/2013 - 14:07 | 4250987 Greenskeeper_Carl
Greenskeeper_Carl's picture

I just wish they would stop calling a 15 $/.70 move in gold/silver a "surge" or a spike. It is neither. Eventually, yes, the Pomo will lose its mojo, and the paper games will stop being effective, and we will actually see a "surge" or "massive spike" in the PMs, but stop being so damn melodramatic with these little moves. Sounds like fucking king world news. Honestly, they can keep these prices at this level for a good while. I've pretty much given up on the miners, so ill just keep buying up physical

Mon, 12/16/2013 - 14:13 | 4251026 dick cheneys ghost
dick cheneys ghost's picture

paging Mr Pink........

Mon, 12/16/2013 - 14:24 | 4251056 Mike in GA
Mike in GA's picture there's a sick sector.  With all the talk of the gold price "bumping along the bottom at extraction costs", shouldn't miners soon be considered a "buy at the low" play here?  And yeah, they've been headed toward this low for a couple years or so now, but if one believes that gold will go on a moonshot one day soon, a few bucks in the miners will pay off strong. 

If we have a 1929 repeat, the miners will be sent into the valleys of penny stock land.  That's when pennies grow to dollars.  Be nice to have some kind of winner out of the oncoming disaster. 

Mon, 12/16/2013 - 16:11 | 4251476 MeelionDollerBogus
MeelionDollerBogus's picture

pretty sure AGQ tracks silver price better than the miners & agq calls for 2016 will pay off for much smaller input way, way more than miners.
a single 25 strike 2016jan call is ask= 3.30 right now.
Let's say with fees you're +3.5 to +4 on the break-even, but silver hits 70 in that time, and I think it could hit 100.
70 silver : agq to 205; 100 silver: agq to 418; profit: 17600 to 38900$. From an input of maybe $350.
No silver miner will return you that 111x multiplier. That's ONE unmargined contract.

Mon, 12/16/2013 - 14:12 | 4251018 debtor of last ...
debtor of last resort's picture

Up to $17- 1800. After that, downhill again, on paper. Patience & Fofoa is my take. As long as there's paper, we will read asswipes.

Mon, 12/16/2013 - 18:16 | 4251968 DoChenRollingBearing
DoChenRollingBearing's picture

+ $55,000

That is a fantastic article by FOFOA.

Mon, 12/16/2013 - 14:15 | 4251037 Seasmoke
Seasmoke's picture

I think.......nah I'm all out of New ideas.

Mon, 12/16/2013 - 14:23 | 4251050 Sufiy
Sufiy's picture

Bitcoin meltdown in China down to $670 now at BTC China on unconfirmed rumours that Exchanges will be banned to make payments

Central Banks Launching Worldwide Coordinated Attack On Bitcoin

Central Banks are getting all together now to celebrate Federal Reserve 100 Year Anniversary. If somebody thought that Bitcoin with other "listed" 42 Crypto-Currencies can challenge the banksters for real, please think twice and take at least the profit! We need more smart people with capital to join the real values when Gold and Silver will be shining again after Special Op "Gold 2.0" to distract 99% from Gold will be over. FED is still silent, but crackdown on Bitcoin is already in place. NowCentral Banks of Australia and New Zealand have issued Bitcoin warning.All these actions are coordinated, as you can see now. Pump it Up and Crash it hard - how many will be left to support the brilliant idea? We will note one more time very important coincidence: according to the reports JPMorgan is Net Long Gold now. Crashing Bitcoin will send Gold much higher, maybe JPMorgan knows something the others don't?

Mon, 12/16/2013 - 16:07 | 4251467 MeelionDollerBogus
MeelionDollerBogus's picture


fonestar : where is your value now?

bitPonzi crash

Mon, 12/16/2013 - 16:19 | 4251520 BigJim
BigJim's picture

I'm pretty sure Fonestar bought for pennies, and then followed the Rothschild dictum of leaving the last 10% for the next guy, ie, he sold at $1100. At which point he followed Satoshi401's sage advice and bought some prime Pacific NE timberland at $200 an acre, and, with his spare change, a few hundred ounces of gold at $800/oz.

So, even if we ignore his bigtime BTC winnings, this means he made at least 100,000% already, on just the land and gold alone, ok?

Mon, 12/16/2013 - 16:49 | 4251623 Keyser
Keyser's picture

I believe you are giving fonestar more credit than he is due. Although it is a nice trader's dream. 

Mon, 12/16/2013 - 14:21 | 4251051 yogibear
yogibear's picture

Bernanke, Yellen and the rest of the Fed is going full Zimbabwe.

Print like mad men even while the dollar crashes and everyone is dumping the country with most debt.

If China and Russia want to take down the US, help the Federal Reserve destroy it's currency. The US will be forced to sell it's national assets and will no longer be able to afford it's military.

Mon, 12/16/2013 - 18:16 | 4251970 Non Passaran
Non Passaran's picture

Will Alaska go to the Russians or to the Chinese?

Mon, 12/16/2013 - 14:23 | 4251052 I am a Man I am...
I am a Man I am Forty's picture

comparing 1928-1929 to now is absurd, and any market action is coincidence, how many billion of dollars were being pumped into the market by the fed in 1928/1929?? how many HFT algorithms were in the market?  what percentage of trades were performed by HFT??  not sure how you compare the two when the dynamics are so different.  

Mon, 12/16/2013 - 15:07 | 4251221 BandGap
BandGap's picture

The correlations are not absurd. I will give you that conditions have changed, metrics modified and outputs finagled. The overriding variable, however, is HUMAN NATURE. That never leaves us.

I, too, am surprised by the correlations (they appear to be above a 90% level). If I disguard my strict thinking and accept them as REAL, a whole new vista opens up. History DOES repeat itself.

Mon, 12/16/2013 - 15:49 | 4251387 BigJim
BigJim's picture many billion of dollars were being pumped into the market by the fed in 1928/1929?...

The Fed was pumping credit big time in the latter half of the 1920's, and then raised rates in 1929 when they decided it was getting a bit frothy. Too little, too late; we know how that ended.

Mon, 12/16/2013 - 16:05 | 4251458 MeelionDollerBogus
MeelionDollerBogus's picture

long-term repeating market-action is never a coincidence.
It's a sign of manipulation & over-all unchanging human planning strategies.

Mon, 12/16/2013 - 14:26 | 4251069 starman
starman's picture

a big bowel movent that is coming!

Mon, 12/16/2013 - 14:38 | 4251096 Hongcha
Hongcha's picture

All hail the all-powerful Fed.  Like a dog beat good & proper.

Oh; and BTC is doomed in China.  Does anyone think the Party is going to let that genie out of the bottle?

Mon, 12/16/2013 - 14:40 | 4251125 squid427
squid427's picture

I am a noob investor with limited resources. I am hoping that silver could come down maybe to the $18 range to load up. Do you guys think that might happen, or be agressive and buy now?

Mon, 12/16/2013 - 15:09 | 4251220 Crash Overide
Crash Overide's picture

Price is "fixed" so who knows, but there is a real limit to how far down it can go because the cost of actually mining it and getting it into the market comes into play here. I think mining costs are anywhere from $15-$20 and ounce but varies by volume and production efficiency so at some point if it went too low there would be no supply or market at the "fixed" price.

I am not an expert so feel free to tell me I am wrong, I just think it's common sense.

Mon, 12/16/2013 - 15:53 | 4251399 BigJim
BigJim's picture

Oh yeah??? I have it on Good Authority that The Shit Is Everywhere, and Only Costs $5 to Get It Out of the Ground!

... paging Mathman and the various other anti-PM trolls we've seen off over the years...

Mon, 12/16/2013 - 15:09 | 4251228 BandGap
BandGap's picture

I have bought anywhere from $15-38 in the past 5 years. It's on sale right now.

Mon, 12/16/2013 - 16:00 | 4251442 MeelionDollerBogus
MeelionDollerBogus's picture

I'd say it's time to ease in now. 18 is unlikely.
Within 2 years I see 100/oz, within 1 year probably 60/oz.

Higher prices mean lower amounts to purchase - unless you get richer in the same period.

Mon, 12/16/2013 - 17:09 | 4251716 SolarSystem1932
SolarSystem1932's picture


Before you buy anything, the first question you should mentally resolve becomes the price at which you sell it.   If you expect to sell silver at $40 an ounce, what difference does the current price make?   You are very new if you believe purchasing silver is an "investment". Until you remove that paradigm, stick with beans and bullets.

I'll give you the same vote of confidence I make to my friends. BUY NOW, and if a future price drop bothers you, I'll buy it at the EXACT price you paid for it....just an offer for my friends, as I do not know you.

Get it! Got it! Good!

And quit using stupid words like "noob".

Rhymes with "boob", "tube" and "lube"...


Mon, 12/16/2013 - 18:12 | 4251960 Non Passaran
Non Passaran's picture

No, when if/it hits $18 that'd be time to sell the entire stash before the price hits $17.

Mon, 12/16/2013 - 14:51 | 4251149 squid427
squid427's picture

I love getting down arrowed for asking questions.

Mon, 12/16/2013 - 15:10 | 4251224 Crash Overide
Crash Overide's picture

Just keep buying Silver and don't worry about the price so much squid.

Mon, 12/16/2013 - 15:48 | 4251378 Wen_Dat
Wen_Dat's picture

Use it as a savings account. If you would save $100 a month in cash, buy that much in silver (each month) instead. Do not go all in!!! Spoken from experience, my cost is around $32 due to this. Thankfully didnt buy gold until 1375, oh wait

Mon, 12/16/2013 - 16:02 | 4251445 BigJim
BigJim's picture

 I love getting down arrowed for asking questions.

Commenting on getting down-arrowed around here will just get you down arrowed more (and I shall be down arrowing my own post to show that I keep the faith in this regard; and I urge my fellows to do the same). But +1 for the sarcasm!

THAT SAID - if you have spare cash every month, BTFD. Lots of smarter poeple than me debate over whether gold and silver has more potential upside. Silver has a lot of industrial demand, and stockpiles - supposedly - are shrinking annually; Gold has an increasing stockpile every year but could really come into its own if there are any currency crisis and it gets fully or even partial remonetised.

I have both... just keep enough dry powder that you don't have to sell any ounces at lower prices than you bought. THAT is really, REALLY depressing.

Much as I hate to admit it, I would recommend thinking in a 3 to 7 year time frame. If you're likely to need to sell some to raise cash before then, you could take a hit. TPTB are amazingly adept at suppressing the price and have kicked the can a lot longer than most of us thought possible. Maybe they'll fail in the next year or two; I hope so; but I wouldn't count on it.

Tue, 12/17/2013 - 01:13 | 4253062 All_Your_Base
All_Your_Base's picture

I agree with BigJim. I down-voted him.

Mon, 12/16/2013 - 14:52 | 4251152 Spungo
Spungo's picture

Something weird is going on. I had a big 10% trailing stop purchase order on silver mining companies and it actually went through. Did someone forget to manipulate the price of silver?

Mon, 12/16/2013 - 15:11 | 4251240 robertocarlos
robertocarlos's picture

This PM surge always happens the day after Rudolf the Red-nosed Reindeer airs. Burl Ives is convincing. I also need to visit the dentist.

Mon, 12/16/2013 - 16:28 | 4251551 GrinandBearit
GrinandBearit's picture

LOL - funny.

Mon, 12/16/2013 - 15:30 | 4251311 Apostle of Unknown
Apostle of Unknown's picture

If the bottom is not already here, I dare suggest for the first time since long that we're very close. If not in price, then definitely in time. Going forward, I think it's going to be very difficult for the price to go much lower, let alone to stay down for a prolonged period of time.

The case has been built up very slowly over the past year. For starters, as was the case in June, we really are again at the point where mine supply will start to go offline.

Second, the last 6 months we have seen so many days of negative GOFO rates. Negative GOFO in itself doesn't signal imminent default as is being claimed on some of these PM blogs. If that was the case, you would start to see visible stress in many other parts of the gold market. But when this technical backwardation persists for weeks and months and just keeps coming back, it does actually mean *something*. Especially when it keeps happening at the same time when relentless divestment in GLD provides a small but undeniable additional supply.

So really, what happens when these fickle GLD "investors" decide to turn around and become a marginal source of demand? GOFO suggests that this might not be possible at current prices.

And then there's the incredible bearishness, the huge speculative short positioning in derivatives, the farcical calm in bond and stock markets, the inductive reasoning behind this confidence (jusqu' ici tout va bien... jusqu' ici tout va bien... jusqu' ici tout va bien... look it up). And to top it all off, since mid-late November we're seeing quite an impressive tax loss selling storm.

Some of these problems for gold have been around for longer than a year now. But at some point they *will* provide the first stage fuel for an increasingly powerful rocket. Once the inflection point has been reached, the miners and gold itself will start to go up again "despite" this or that problem, instead of "because".

Early 2014 actually looks fairly plausible to me. At any rate, I can't see this going on for much more than another year.

Mon, 12/16/2013 - 15:32 | 4251312 squid427
squid427's picture

Thanks for the advice crash

Mon, 12/16/2013 - 19:36 | 4251622 WhiteNight123129
WhiteNight123129's picture


1. Chec the price of Tobacco and M1 since 1950

2. Processed Tobacco has the most stable demand no substitution, no cycle. It is clockwork to measure other commodities.

Right now Silver is affordable in Tobacco Terms, actually it is cheaper than in 1950.


In tobacco terms, Silver is neither in a bubble neither expensive. Granted it is not as cheap than in beginning of 1999-2003, but it quite cheaper than between 1950-1965 pre-bretton Woods trouble.




Mon, 12/16/2013 - 18:37 | 4252040 Whiner
Whiner's picture

Whe has a fiat curreny been replaced buy a gold backed currency? I am all for, but too lazy to research! Reightmark for Marks.

Tue, 12/17/2013 - 23:43 | 4255901 the grateful un...
the grateful unemployed's picture

yes but Bernanke knows what to do this time, he is student of the depression, and since mopping up afterwards is also their policy, (not avoiding bubbles) when the markets crash this time they simply cancel the trades and reliquify the major losers. (in the past they closed the market for a couple days, but that simply isn't enough) and obama will be proud that he saved the stock market.

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