Perfect Storm Sees Gold & Silver Surge – Chavez Gold Action Leads To Backwardation, Short Squeeze And ‘Havoc’ Concerns

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Fri, 08/19/2011 - 07:56 | 1576418 bullionbaron
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Would like to see the HUI break this H&S pattern and pass the 610 mark, we may then be able to have a run in Gold stocks:

Gold stocks the cheapest they've been since early 2009:

Fri, 08/19/2011 - 08:01 | 1576428 Haywood Jablowme
Haywood Jablowme's picture


This parabolic stage is gonna be one hell of a ride.  YEEEEE HAAAAWWWW !!!!!

I've been waiting for $100 swings for a few short years now.  Let's do this shit.


Fri, 08/19/2011 - 08:40 | 1576576 dollarmite
dollarmite's picture

Reality bitches

Fri, 08/19/2011 - 10:46 | 1577227 zorba THE GREEK
zorba THE GREEK's picture

Backwardation: Greek love making. Those who shorted gold are going to get backwardated.

Fri, 08/19/2011 - 11:28 | 1577467 Strider52
Strider52's picture

I've heard it many times: You will not get rich on gold, it only stores value, but doesn't pay dividends, and doesn't make a profit. Plus, you can't eat it.

  Well, the Precious is up 50% in one year. I don't think the dollar has depreciated 50% in that same time. But I'm no math genius. Oh, wait...I am.

  Lucy, you have some 'splainin to do.

Fri, 08/19/2011 - 12:51 | 1577904 DosZap
DosZap's picture


I've heard it many times: You will not get rich on gold, it only stores value, but doesn't pay dividends, and doesn't make a profit. Plus, you can't eat it.


And like the USD IS, and DOES???.


Fri, 08/19/2011 - 08:06 | 1576452 snowball777
snowball777's picture

Fuck paper.

Fri, 08/19/2011 - 08:42 | 1576586 Pladizow
Pladizow's picture

Hopefully this will wake the big boys up, i.e., institutional investors, biillionairs, hedge funds, etc.... to the fact that if they want to move the market (and we know they do) then they should deal in physical!

Fri, 08/19/2011 - 08:47 | 1576597 Sathington Willougby
Sathington Willougby's picture

in Amerikant, paper fucks you!

Fri, 08/19/2011 - 09:02 | 1576618 Pladizow
Pladizow's picture

A university professor did a study where he left 10 students dispersed around New York City with the simple instruction of "find each other". Seemingly impossible?!

However, they all did. Because they all went to Grand Central Station - a historical focus point.

Gold is and will further replace US Treasuries as a focal point and everybody out of fear will rush to meet everyone else there.

"A rally lead by fear will be far stronger then one lead by greed" - James Dines

Fri, 08/19/2011 - 09:54 | 1576901 Manthong
Manthong's picture

Good perspective.. thanks.

From the Ackerman piece:

“Grandma and Grandpa … they are on the other side of the Federal Government’s good fortune, unable to generate a livable retirement income on a million-dollar nest egg."

When grandma and grandpa figure this out, today’s prices will be cheap.


Fri, 08/19/2011 - 10:20 | 1577008 snowball777
snowball777's picture

If they can't figure out how to live decently with a paid-off home, a mil, and SS checks, then Grandma and Grandpa should go buy some Medicare D-subsidized Viagra and fuck themselves repeatedly.


Fri, 08/19/2011 - 09:04 | 1576667 Sudden Debt
Sudden Debt's picture

I hope that's not your plan on how to spend your weekend...


Fri, 08/19/2011 - 09:39 | 1576821 Oh regional Indian
Oh regional Indian's picture


Paper cuts, FTW!

Vivek (My real name, in case anyone is wondering, Hello!)

Fri, 08/19/2011 - 11:32 | 1577491 Strider52
Strider52's picture

Fight Club Rule # 2: Nobody uses real names at Fight Club.

Fri, 08/19/2011 - 07:56 | 1576422 sunnydays
sunnydays's picture

Blythe having fun this morning?

Fri, 08/19/2011 - 09:03 | 1576661 Bullionaire
Bullionaire's picture

JPM:SILVER now negative for 18 days.


Suck on THAT, Blythe.



Fri, 08/19/2011 - 09:14 | 1576708 fuu
fuu's picture

Which I believe is longer than when silver was on the way to 50 this spring.

Fri, 08/19/2011 - 08:02 | 1576438 Turd Ferguson
Turd Ferguson's picture

DO NOT be a smartypants top-caller. Sit back and relax while the world burns.

"A correction remains a real possibility but buying and holding bullion remains the best strategy in today’s volatile markets."

Fri, 08/19/2011 - 08:07 | 1576456 cossack55
cossack55's picture

Have you got my fire extinguisher, Turd?  If so, keep it.

Fri, 08/19/2011 - 08:42 | 1576577 Smiddywesson
Smiddywesson's picture

Exactly.  The list of lifeboats remaining is becoming alarmingly short.  The healthy currencies like the swissy don't want survivors swamping their currency, and the dollar is being debased.  That leaves gold and silver, and though they can supress silver, they are buying gold.  How do you hold down prices when everyone is swarming into the boat, including yourself?  Central banks are buying, and now here comes the public!!!


I really have to laugh at the deflationist who said gold would tank along with everything else because debt default is inherently deflationary.  They completely missed the fact that the world is awash in paper and there will be nowhere else to hide than PMs.  It doesn't matter how much wealth destruction there is, there's still plenty to push up the gold market.  Academic idiots.

Fri, 08/19/2011 - 09:26 | 1576760 oddjob
oddjob's picture

You are a smarty pants chartist unnecessarily worrying investors about manipulated short term drops in the PM prices. Is there a difference?

Fri, 08/19/2011 - 09:33 | 1576790 sunnydays
sunnydays's picture

charts and graphs for the day, month 6 month and year of commodities - shows who - Blythe must be sweating right now.

Fri, 08/19/2011 - 08:01 | 1576440 PaperBear
PaperBear's picture

Intra-day highs for Gold of $1,878/oz and for Silver of $42.72/oz.


Fri, 08/19/2011 - 08:46 | 1576595 Smiddywesson
Smiddywesson's picture

I don't think we will see that for a while yet.  Continued central bank acquisition depends upon keeping gold and silver under control, and they have unlimited fiat.  They will fight back, perhaps using up another two of their precious margin increases.  That would be sweet, because next week we would be right back at the same price and they would have two less margin increases in their gun, and they know it.


Fri, 08/19/2011 - 08:03 | 1576442 scatterbrains
scatterbrains's picture

One day we may see  1 grain ingots replace the $20 dollar bill which translates to $9600 per ounce.   I don't watch ebay pricing very closely but it seems lately that  1 grain size transactions are becoming more popular to the common man... or so I'm thinking.

Fri, 08/19/2011 - 08:04 | 1576443 snowball777
snowball777's picture

Do you get the feeling that La Cucaracha timed this for maximum impact?

"Stand and Deliver!"

Fri, 08/19/2011 - 08:05 | 1576449 lolmao500
lolmao500's picture

Silver needs to go above 60$ to be back at reasonable levels and gold/silver ratio.

Fri, 08/19/2011 - 08:22 | 1576516 FranSix
FranSix's picture

The Gold/Silver ratio should continue to correct in the onset of credit quality breakdown.  The next correction level for the Gold/Silver ratio is very probably the 89-week EMA on the weekly chart.  The technicals on the Gold/Silver ratio are that gold will continue to gain on silver in coming weeks.

Backwardation in Gold is not great for the price advance, because every backwardation in Oil prices, Copper prices, Silver prices have all preceded a correction.  The more chronic the backwardation, the more meaningful the correction.

So far, the backwardation is only brief.  The spead between spot and futures is not meaningful enough to coax out gold into the markets.

Fri, 08/19/2011 - 08:51 | 1576605 bankrupt JPM bu...
bankrupt JPM buy silver's picture

Ya thats b/c they raise margin 15 times in 4 days, thats why there are artificial corrections

Fri, 08/19/2011 - 08:52 | 1576609 Smiddywesson
Smiddywesson's picture

The definition of a "correction" is rapidly changing in gold.  It seems TPTB are rapidly becoming TPTW (the powers that were) in this market.  I'm not saying there won't be any corrections.  I'm just saying they will be sharp and brief, and won't help keep the prices from climbing.

Fri, 08/19/2011 - 11:16 | 1577395 FranSix
FranSix's picture

I can see gold challenging the inflation adjusted 1980 high of $850 (~$2300/oz. U.S.)and then backing off to consolidate.  The timing of this move is difficult to discern as gold has been appreciating during market down days in a very aggressive fashion. 

Hopefully it will let off some steam in the meanwhile, but a crash will bring gold prices down.  I presume the low should be in the $1500/oz. range.

Fri, 08/19/2011 - 17:39 | 1579135 akak
akak's picture

The so-called "inflation adjusted" 1980 high of ~$2300 in gold is only adjusted for the fraudulent, manipulated and low-balled CPI figures.  In reality, the TRUE inflation-adjusted 1980 price peak of gold would be more on the order of $3000 per ounce.

Fri, 08/19/2011 - 12:49 | 1577902 DosZap
DosZap's picture


<Backwardation in Gold is not great for the price advance, because every backwardation in Oil prices, Copper prices, Silver prices have all preceded a correction.  >

Sure it is, it means we get ANOTHER, yet another shot at BTD!.

Fri, 08/19/2011 - 08:06 | 1576451 Sudden Debt
Sudden Debt's picture

160 times more paper silver than physical....

100 times more paper gold than physicla....



Fri, 08/19/2011 - 08:09 | 1576464 cossack55
cossack55's picture

Its funny, I keep my paper gold and silver in the bathroom and my phys gold and silver buried in 4" PVC.  Why is that?

Fri, 08/19/2011 - 08:33 | 1576556 Stumpy
Stumpy's picture

You think vaccum sealer bags will do the trick? I used four layers. I worry about the winter though.

Fri, 08/19/2011 - 08:53 | 1576614 Smiddywesson
Smiddywesson's picture

Gold doesn't tarnish and squirrels won't eat it.  It's safe

Fri, 08/19/2011 - 09:58 | 1576928 cynicalskeptic
cynicalskeptic's picture

I don't know about that........    seems like some of the gold stored in COMEX vaults is foil covered chocolate.

Fri, 08/19/2011 - 08:06 | 1576453 thunderchief
thunderchief's picture

I hope they do it.  And I hope it leads to other countries doing the same.  The banks have multiple owners on each bar.  That is the only way to have such a bloated paper market.   Get in line for cash settlements Soveriegn Nations.

Fri, 08/19/2011 - 08:06 | 1576454 stateside
stateside's picture

Many gold juniors traded in Canada are off 50-75% this year.  Many with 43-101 rated 500,000-1,000,000 ounce deposits have a market cap of less than $15/oz with gold trading at $1,850.  There has never been such a disconnect in the history of gold/junior gold stocks.  Either gold will trade down to $500/oz, or we are on the cusp of one of the greatest bull markets of all time in the Canadian gold juniors that will make the internet stock craze look like child's play.



Fri, 08/19/2011 - 08:31 | 1576549 Stumpy
Stumpy's picture

Let's say I don't regret conselling my girlfriend buying a considerable chunk of her retirement funds on ZJG (BMO Junior Gold). Don't look at it for 10 years babe, and then, thank me.

Fri, 08/19/2011 - 08:48 | 1576599 mayhem_korner
mayhem_korner's picture

She's gonna want a Kardashian-sized engagement ring, y'know.

Fri, 08/19/2011 - 09:08 | 1576681 Stumpy
Stumpy's picture

She's a low-maintenance-cost darling. A saver, not a spender. And she's disgusted by celebrity gossip. A keeper!

Fri, 08/19/2011 - 09:19 | 1576737 Flakmeister
Flakmeister's picture

Hell, don't look at it for 10 months...

Fri, 08/19/2011 - 09:54 | 1576907 Frog-And-Toad
Frog-And-Toad's picture

Can you please elaborate on what a junior miner/junior gold is?  I am unfamiliar but interested

Fri, 08/19/2011 - 11:19 | 1577410 Roger Knights
Roger Knights's picture

Seniors are the large miners; the ETF for them is GDX.

Intermediates are smaller; their ETF is GDXJ (misnamed "Juniors")

Juniors are smaller still; some are producers, some are explorers. Both can be found in the ETF GLDX.

Fri, 08/19/2011 - 08:33 | 1576559 Flakmeister
Flakmeister's picture

I concur.... There are companies that are hideously cheap.

Fri, 08/19/2011 - 09:40 | 1576824 Oh regional Indian
Oh regional Indian's picture

Unless they are hideously hedged?


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