The FOMC’s Cirque du Merde

Investment Research Dynamics

Silver continues to trade DIFFERENTLY, in a positive manner that it has not done in YEARS. The potential for the silver price to explode in the very near future is all there.  The shares continue to maintain their own positive tone and refuse to give up much ground on corrections. – Bill Murphy from GATA’s Midas report

Nearly the entire precious metals investing community looks at the Comex options expiration and the Fed’s FOMC meetings with trepidation, as historically those two events have triggered a massive Comex paper attack on the price of the metals.  Having both events back to back in the same week elicits even more fear.  Of course, Goldman Sachs commodities clown, Jeffrey Currie, was on CNBC again today calling for $1000 gold.  This guy has absolutely no shame about continuously making an idiot of himself with his price predictions for gold.

I exchanged emails with Bill Murphy on Tuesday morning because the precious metals, especially silver, were unexpectedly buoyant in the morning.  I wrote last week that the Comex bullion banks, based on the put/call open interest for May silver, were incentivized to make sure silver closed below $17 today for options expiry.

I emailed Bill asserting that “they” can’t keep the metals down.   Gold spiked at 9:00 ESTon no news or event that would have triggered a spike The 5-minute graph indicates that it started to move up and then short-covering kicked in. Silver started to move and then there’s a red bar and then silver pops. That tells me that they tried to hit silver to keep it from popping but short-covering still kicked in. (click on image to enlarge)

The 60 minute bar chart of silver shows silver oscillating between $16.80 and $17.30 sincelast Tues, with a move up that was slammed with a paper hit on Thursday. But silver refuses to go lower at the direction of the Fed/bullion banks. At this point silver could break either way. They are very desperate to keep it from breaking up, but they seem incapable, at least for now, of forcing it lower.  (click on image to enlarge)

The charts smell of serious desperation. Most gold commentators are pointing at the COT structure and sweating bullets. That side of the ship is too crowded in my opinion. We may well get another surprise move higher tomorrow after the FOMC’s Cirque du Merde show is over.  Gold and silver are definitely behaving differently than we’ve seen over the last 5 years.  The criminal bullion banks seem to be having trouble pushing them lower.

Last week I was invited on a Denver-based radio show, Wake Up With Steve Curtis.  We discussed a lot of the factors that are underpinning this surprising strength in the precious metals. You can listen to the podcast here:

I will be publishing the latest issue of the Mining Stock Journal on Thursday. I’ll be featuring a relatively undiscovered junior mining company that has 5+ million proved ounces of gold and silver in the ground. You can access this report here:  Mining Stock Journal.  I am sending the back-issues to new subscribers but this won’t last much longer.

“Looking forward to the next mining recommendation.  I sold my TAHO Sep 12.50 for a nice profit and need  a place to put some of it.”  – Subscriber “Ed”