By SD Contributor SRSrocco:
As we can see from the action in Sept 2011, right before gold went vertical, the commercial net short positions were at a peak. But, when the price moved up it caused a HUGE SHORT SQUEEZE, forcing the commercials to cover.
Here we can see that the BULLS won the battle. Presently, the gold price could go either way as we are seeing extreme high levels in the commercial net short positions. However, if we do see large buying coming in from the Hedge Funds and etc, it could cause a huge short squeeze, similar to what took place back in Sept 2011.
Well, it looks as if gold production from the Top 5 gold companies declined 5% in the first half of 2012 compared to the same period last year:
Barrick had less gold production due to less ore processed and GoldCorp was dealing with the drought in Mexico which cut back their production. Regardless, it will be difficult for these top 5 miners to make up the shortfall in the second half of 2012… especially with 39% of the gold production offline in South Africa.
If global gold production increases in 2012, it will be due to increases in other countries and in smaller gold producers. We shall see.
WHERE’S THE PRICE OF GOLD HEADING??
That’s a good question. According to Clive Maund, both gold and silver are overbought and have extremely high COMMERCIAL NET SHORT POSITIONS:
Of course Clive is guilty of reading the gold and silver charts in a vacuum. If we look at one of Gene Arensberg’s charts from GotGoldReport.com, we find that during the big move up in Gold in Sept 2011, the commercial net short position actually declined:
The Pink line denotes the gold price, while the Blue line is the COMMERCIAL NET SHORT. As we can see from the action in Sept 2011, right before gold went vertical, the commercial net short positions were at a peak. But, when the price moved up it caused a HUGE SHORT SQUEEZE, forcing the commercials to cover.
Here we can see that the BULLS won the battle. Presently, the gold price could go either way as we are seeing extreme high levels in the commercial net short positions. However, if we do see large buying coming in from the Hedge Funds and etc, it could cause a huge short squeeze, similar to what took place back in Sept 2011.
On-the-other-hand, if we do get a correction… it won’t be much. Anyhow, we are in it for the long term. We got Ben Bernanke on our side.
IS THE US MINT ON VACATION??
The last time the US Mint updated their gold and silver eagles sales was back on Tuesday, Sept 25th. For some very odd reason, they haven’t even updated in the beginning of a new month. This is very strange if you ask me. I have never seen a new month come and go without an update either on the first or second day of the month.
I just contacted Michael White, PR spokesperson for the US Mint about the delay in updating their figures… all I got was an answering machine. I left a message. Maybe we may see an update here soon.
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/images/live/s_silv.gif)
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Love your articles SRSROCCO! Keep up the great work!
Yeah, if they ever have to cover, look out!
It’ll be a delight to see the bastards squirm!
Squirming bastards? I remember them. They were the opening act for Oingo Boingo.
Once again Doc and SRSRocco bring us the best and most up to date info. Thanks!!
Let us hope the Morgue gets their coconuts squeezed in a vice in silver and gold!!
I would enjoy seeing em’ sons-a-britches lose their shorts! and their undies.
Until something is done about the huge JPM short position nothing will change. They will continue to drop the price at will and make money on the panic sellers.
No panic selling here. If the cartel sells, I will sell when if I can get out before they bottom it out.
Great article as always, SRSrocco.
I agree, the silver price can go either way and will do so in the coming days. The chart is very confusing, on one hand it looks like an explosion is coming very soon while on the other it hints a correction for the reasons Clive mentioned. I think that we go down first before we go up. Let me explain why.
Everybody and his sister took positions after the QE3 announcement. Some ‘fresh’ money got in the silver/gold market. What is the best way for the cartel to steal everybody’s money in a way that nobody can expect? You guessed it right, a USD rally.
It also appears that the QE3 news effect is already priced in. Therefore, no price progression at the last 2 weeks or so. Time for correction here?
More concerns about Spain may hit the Euro very hard, USD will then rally putting pressure on precious metals. Spain concerns me the most to be honest. As we’ve seen in Greece’s case, the bad news come and go while putting a lot of pressure on the Euro and the markets. Spain is bigger so the effect will be bigger.
I know we all want to see our silver goes higher and higher in price. It will eventually, no question about it. Until it does, I would welcome any opportunity to purchase more of it in lower prices.
Fact: QE3 is open ended. The true amount printed is at this time unknown? So how can you factor the unknown?
No one can tell what would be silver’s price in the future which is why you should not trust people that say that silver will hit 50$ in December or something similar. “The only way that you can predict the future is by creating it”. All we know is that everything’s prices will go higher in the future and not just silver due to inflation but we don’t know what the prices will be.
I just read Franklin Sander’s daily commentary, looks like others read it too. You are right about the short squeeze. For that to happen, state pensions funds need to start buying PM’s. This is the only fresh money out there. Hedge funds, IMO, are playing the USD Index card to cash in when the Central Banks smash the PM price. They know that this will happen thus the massive short positions. The PTB run the ECB/Federal reserve thus control currency valuations. To summarize Franklin, small players already have their bets on the dollar decline, as in stack accumulation, which is priced in PM. Ok now what. We are going to see a smash down to June levels or lower?
I also have been noticing alot of rhetoric about how the gold price is/trying being/to be decoupled from the USD Index. I have also noticed that the gold price moves have been closely connected to USD Index, lately. Which is it? I think the Central Banks, the ECB/Federal Reserve, will play this Index card as their most effective weapon to hurt the little guy and make a small fortune in short positions. A headfake on the Gold/USD Index connection. I anticipate a dollar index “rally (really manipulation)” to smash those who have bets in place for the dollar demise and line the pockets for the commercial short positions. Yes, this will be a time to stack, but the only way for Americans to smash the Central Banks control of the Dollar Index and the naked shorting in PM’s is to use state pension fund money and buy PM’s by the truck load. This will change the game. State retirement managing firms MUST start buying PM’s to short circuit this pattern or else there will be no small player left or atleast holding a commodity that is grossly undervalued. This is the only power the people have. If the state pension funds moved their money around, they could manipulate the markets, and get rich. If the PTB rally the dollar, smashing stackers, and crash the stock market, they will effectively have eliminated the only threat to their total control.
Like the PTB said, if you can figure out what they are doing, you to can make a fortune. If we take state retirement money, we can burn them forevermore.
Remember we just broke out of a ~15month wedge/triangle in August with them unable to break $26 to the downside. It is a little unlikely that we would experience any significant pullback so soon. I think we’ll see $36.90-$37.80 in the near future, if not Friday. Thats the next resistance I have..
Resistance is what the cartel decides is resistance. If that is $35.50, you see it then. It won’t touch $37.00 until maybe late November. Until then, the price will most likely return to $30.00.
At the bottom of this article are 5 similar articles. Article 5 (http://www.silverdoctors.com/massive-gold-short-squeeze-imminent/) is Turd from TF Metals, on 3 May 2012, the day before the BLS/NFP report. He says a masive short squeeze is coming, starting the next day, 4 May. The very opposite happened. Price went from 30.33 on 3 May to 27.31 on 15 May, 11 days later.
A few days earlier, on 29 April 2012 Maund sent out a major bull alert to go long silver. On 29 April silver was 31.04, and then it was 27.31 on May 15, 16 days later.
Now we have more expert opinions on what will happen after tomorrow, one from bull Rocco, and one from bear Maund. One of them will be right, and will remind us at convenient times in the future of his uncanny predictive powers. The loser will never ever remind us of the day he got it flat out wrong.
I remember going massively long at 31.07 on Maund’s 29 April alert, and taking a fat hiding as the price plummeted, finally hitting a low of 26.33 on June 27, taking my biggest loss ever since I started trading silver.
What’s always interesting is reading the comments on articles. Take Turd’s 3 May blind guess that silver was about to rocket. The comments were excited, some for, some against, none knowing actually what was going to happen – all just opinions and hot air, like a bunch of bored housewives gossiping and rumor mongering at a tea party, or a bunch of drunk men at a bar predicting the Super Bowl outcome based on their expert opinions. It’s human nature, isn’t it, to spout irrelevant opinions, to at least have our tiny voices heard in this infinitly enormous univers, trying to lend importance to the brief and insignificant time we spend on this 4 billion year old earth. Shakespeare puts it so well, commenting on tales men tell of their lives ” it is a tale told by an idiot, full of sound and fury, signifying nothing”
And make no mistake, I too am full of opinions. It takes very little for me to volunteer an opinion. I like to let people know how well informed I am, and what a clever fellow I am actually. And if there are some pretty girls around to hear me, my opinions come thick and fast and loudly.
The most relevant comment on Turd’s fateful 3 May article was from RJRG, who said he prefers physical over digital, and then tongue in cheek says “oh wait, I’m on the wrong site, thought I was on my porn page”. Now there’s an honest reflection of the baseness we humans privately consist of, after all our boastful public opinionating is done with. Good man – he really made me laugh!
So, let the chips fall where they may tomorrow. Place your bets ladies and gentlemen, and pray to your chosen god to favor your opinion.
Turd is just another (expert) or actually clueless silver promoter who recently has climbed on the silver bandwagon.
And this bandwagon was over populated in 1995. Still we have new names and faces, but the hype is just old news parroted by these young guns who have arrived a bit late for me.
DCA is likely the BEST buy strategy in a manipulated market.
I do it (buy) when I have the money. Fortunately, I have not had
much to spend when the prices were peaking. However, now, at $35,
it seems like a great buy signal, watching all the short selling and
virtually NO downward movement resulting. BUY, BUY, BUY!!!
somethings being squeezed gold shooting upwards gold 1790 silver 35 …. is this the breakout were waiting for
NO!
We are seeing the mother off all ponzi schemes play out.
SRSrocco, interesting article as always. October is a quiet month for metals and maybe the price will drop. Who knows. November traditionally however is an excellent month for precious metals. I guess the message is stay away from paper trading the markets and just stack physical after any price smackdown. The NFP data comes out tomorrow so anything could happen.
I came across this three way discussion between Kent Moors, Chris Martenson and Keith Fitzgerald about the upcoming energy, environmental, economic crisis. I thought it was very interesting. They talk about unsustainable exponential energy, environmental and economic growth. They also discuss EROI and a potential water crisis as water aquifers dry up.
http://moneymappress.com/pro/Pyramid0712MMR2Y.php?code=PPYRN906&n=PYRAMIDMMR12EADMMP
We are barely in the bull market and people are asking the same silly questions. The next phase is institutional buying. And NO ONE is buying. SO…………, the manipulation continues and if you pay attention to the past actions of the cartel, you can anticipate their future reactions to come.
Short squeeze IMMINENT!!!!! As in hours, days, weeks, years????? Not even close. Nothing imminent on the horizon, except the price falling back to $30.00 by the election.
…can they short sell enough to do that? I’d say NO
welll maybe nothing is going to happen at all … maybe were all just smoking the pipe in vain but gold has only been higher than this for a few days last year … we pass 1800 we start challenging the highs of last year … silver will move much quicker when it gets its shoes … and gold will give him those shoes … once new territory is breeched by gold, silver will sing …
Gold is way too expensive compare to silver and it’s very hard to buy a small piece of it. I’ve tried to buy a 1/10 ounce of gold last week so I went through four coin shops. Three of them don’t have one anymore and then other one is closed. I think that the one that is closed got bankrupt since it didn’t open for one month. Even if they had one, they would of sold it with a high premium. As for silver, it is more available than gold in coin shops but silver is also getting harder to find.