Thursday, October 20, 2011

Gold and Silver Update*Update

I wanted to plug Turd Ferguson's, "TF Metals" site tonight.

Turd's site is about one of ten that I read daily and weekly. It is excellent and I love the comments. Turd and the commenters keep the trolls to a minimum. Many of the players are futures players- although the incredible margin hikes in silver have literally ruined that market. The ratio, 1 actual dollar in your account for every 6 dollars of silver controlled by a contract (at 30 bucks an oz.) has essentially ruined the small speculators. The good news is that the silver market has been turned over to only strong hands which means the volatility is likely gone.

Remember a simple rule. Banks hate precious metals. Metals are real money. They are the competition. Every time you buy metal- you are shorting worthless and unbacked currencies.

The CFTC has voted for position limits. No longer can giant commercials force the price of metals down with unlimited and naked selling. They will have to prove they have the underlying commodity. Precious metals markets have been manipulated by commercial banks for years. This is a very positive development for precious metals although I expect banks to find a way around new position limit rules.

Yours truly and a few of his friends signed the petition for position limits.

I don't know all of the nuances of the new position limits and the deadline is kind of murky. I do know that the big commercial shorts have to unwind their positions. I look to places like TF Metals to interpret this for me. Turd believes, and so do I, that banks are going to try and force metals prices down as much as they can so that they can cover their outstanding short positions at more accommodating prices.

I only buy physical. I am waiting to buy my last huge chunk of silver. One hundred ounces will take me to 350 ounces of silver- that was my original goal over a year ago. Any price in the 26 range means I buy. That simple. I am only looking for two more ounces of gold. Gold at 1500 means I buy. My original goal was 10k of each metal. I am toying with buying an oz. or two of platinum. Platinum has really been taken out lately.

Trust banks to give us the price we want. Don't worry as they push that price down. They are going to try and exit their obligations just as cheaply as they can. That may be the last cheap entry point in a world gone completely berserk. I expect the FED not to do anything or announce anything (did you see that CPI report?) until its member banks unwind their positions. Quiet. When the big commercials are about out, say hello to a smoldering euro, printing gone bananas, and QE3. I believe that 2012 will be one of the most rewarding years ever- for precious metals buyers.

*Found this Elliott wave gem suggesting a gold downside of 1200 possible. Food for thought. 

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