Turd's Corner

Craig Hemke, I came to know him when he was known as chartist Turd Ferguson, a successful blog writer with a lively community of enthusiastic followers.

Searching for a Low in Gold​

After finishing 2023 on an uptick, the COMEX precious metal prices are once again moving lower and dragging down investor sentiment. Last year we endured similar periods, and most were followed by significant price rallies. As such, are we on the doorstep of the first rally of 2024?

Where are we currently in terms of RSI? COMEX gold is at 46, but COMEX silver and the GDX are at 33. So, we're not yet screaming "OVERSOLD" and "BOTTOM" but we're getting close.
What other signs are out there? Let's look at a couple of other indicators and "fundamentals".


First, as we wrote last week, the markets and the investing public were in major need of a reset of their rate cut expectations as the year began. That has now taken place. Where "the markets" had been almost 90% certain of a fed funds rate cut in March, the consensus is now a more reasonable 40%.


Another factor that has been hindering price the first three weeks of the new year has been a rally in the dollar index.
Take a look below. Yes, this has been a solid bounce in the index, but for now it's just that—a bounce within an ongoing downtrend. Until it makes a new "higher high" above 104.50, technical analysts will note that the current pattern can be interpreted as simply another "bear flag" consolidation before the downtrend resumes. If the index rolls over here and begins dropping toward 101 again, the COMEX metals will catch a sustained bid.




The prices of COMEX gold and silver have also moved into areas where we should expect some support. You might expect this after the losses we've seen over the past three weeks. Of course, the charts can never fully tell the tale and lower prices might still be coming, but $2000 gold and $22 silver have been significant support levels before, and I expect that to continue.






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I used to follow him on ZH before he went solo with the original blogsite.
He did very well launching off the back of his following on ZH. Full credit to him.
He helped a lot of us to better understand the underlying / underhand ways the metals were 'managed'
And 'Turds Bottom' was a ledgendary call that has been hard for him to follow.
Now full time doing analysis he has that burden of having to come up with something a bit eye catching every week, to keep his paying customers happy. A lot harder than just sharing thoughts on ZH when there seemed to be something relevant to say.

rblong2us said:

And 'Turds Bottom' was a ledgendary call that has been hard for him to follow.

Click to expand...

yeah, but even more I remember that like wise legendary comment of one of his blog followers "... Turd's bottom should be a good entry point..."

A Busy Week for Gold​

Wednesday brings the conclusion of the January FOMC meeting, but before we get there, we'll also have an employment update from the monthly ADP survey as well as the Chicago Purchasing Managers Index. However, it will be the FOMC meeting that really shakes things up.

While there is a 98% chance that the Fed will hold the fed funds rate unchanged, what Jerry Powell says and how he says it will make all the difference. As of Monday, the 29th, there's about a 50/50 chance that the Fed will begin cutting the fed funds rate at the next FOMC meeting in March.



Where will those percentages stand by late Wednesday? If the percentage likelihood of a rate cut moves higher and toward 60%, then you can expect the COMEX gold price to rally.

Gold is About to Break Out​

Join Craig Hemke and Andrew Maguire in our Monthly Wrap-Up video as they dive into the economic outlook for February!
They will discuss:

• Geopolitical Events: Political instability, conflicts, and trade tensions that affect investor sentiment and drive demand for safe-haven assets like precious metals.
• Interest Rates: Interest rates that influence the opportunity cost of holding precious metals.
• Industrial Demand: Some precious metals, such as silver, platinum, and palladium, have industrial uses in sectors like electronics, automotive, and jewelry. Changes in industrial demand can affect their prices.

30 min.

A Pause To The Pausing​

As such, look at the latest rate cut expectations chart as of Monday, February 5.
The odds of a fed funds cut at the March FOMC meeting have fallen to just 14% with the odds of the first cut coming in May—which stood at 100% just a month ago—now at a more reasonable 63%.



All of this signals that gold investors are going to have to wait longer for that price breakout we've been anticipating. The breakout is coming—of that you can be certain. However, as discussed in this year's macrocast, the delay should temper some of the uber-bullish price expectations, at least for this year.

That's not to say that it's all a fait accompli, however. Those rate cut odds could come flying right back due to unforeseen events that even the all-knowing demigods at the Fed can't predict. What's lurking out there that could impact the Fed's schedule? Of the myriad possibilities, let's just pick three:

1. The Chinese stock market is crashing. If this continues, will a "contagion" spread to other global equity markets?




2. The dire situation of the U.S. commercial real estate market is finally beginning to impact the regional banks.
In March 2023, the Fed created a new facility to provide liquidity to banks and help them maintain the illusion of solvency. However, in late January, the Fed stated that this facility would close on schedulein March of 2024. What happens then? I guess we'll know soon enough. See the link and chart below.




3. And geopolitics can rear an ugly head, too, as a wider and more regional war in the Middle East could break out at seemingly any time.

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Gold and Silver Are Sound Money​

Last year, the Arkansas legislature passed a bill that was then signed into law by the governor. This bill, AR HB 1718, legalizes the use of physical gold and silver as actual currency within the state. As such, residents of Arkansas can now transact payments using physical metal as the medium of exchange and these payments are not subject to additional taxes.

But it's not just Arkansas. Multiple other states have joined the movement toward reestablishing gold and silver as sound money and legal tender for transactions.
The state of Texas has been at the forefront of this movement. The state first made news in 2015 when legislation was passed that authorized the building of a state-owned bullion depository. Plans were made, contractors were hired, and the institution was built and fully functional just a few years later.

Recently, the state of Texas has looked to take things a step further with the introduction of a gold- and silver-backed digital currency. Though this first effort, titled TX HB 4903, failed to pass, you can be certain that the measure will be brought to another vote in the near future. If and when the bill becomes law, Texas will begin to issue the first of its kind gold- and silver-backed digital currency. This digital currency could then be used as legal tender for private transactions within the state.




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Comment: the big step here is not States facilitating gold investment (de-taxing it or otherwise).
The monetary revolution envisioned here is considering gold legal tender.
I don't know if the Fed could agree, also from a constitutional point of view.

There is a thread tracking all the various State legislation on the tax elimination, legal tender and repository issues here:

The Long View: COMEX Precious Metal Prices in 2024​

I'll cut to the chase: I'm just not looking for huge gains this year. Next year? YES! This year? I think we should be content with something closer to what has been "average" so far this century.



When can we feel confident and almost certain that the next leg upward has begun? Spot gold needs a monthly close above $2070 before anyone should begin to get excited. Beyond that, a monthly close above the $2120 intramonth high of December last year and it's on.


All of us who have held physical silver for over a decade are patiently awaiting the next bull market. When will it begin? When price breaks out above $28. Simply put, if the bullion bank trading desks are getting net long at $22 silver, maybe you should consider that level as a floor for your dip-buying too.

The chart below is quite clear. The breakout above $28 is coming. Of that you can be certain. But check the timing. Does it appear to you that you should expect this breakout before late summer or autumn of this year? In fact, I don't think we should expect it before next year.




My 2c: Turd very prudent on the timing, probably because hype-burnt in the past (and not alone in that...)

"if the bullion bank trading desks are getting net long at $22 silver, maybe you should consider that level as a floor for your dip-buying too"
A couple of weeks ago in the Silverseekers' Corner I showed the swap dealers on their way to net long territory.
I'm not sure about Swap Dealers and bullion banks trading desk being one and the same, but almost : )

Volume Precedes Price​

When I first earned my NASD Series 7 "stockbroker license" thirty-four years ago, I had the privilege to learn at the feet of industry veterans, some of whom had been in the business since the 1950s. They passed along to me some tried-and-true adages, most of which remain relevant today.

• With the ongoing breakout in the gold price above $2100, I'm reminded of one of those adages as I type this week's post: "volume precedes price". What does that mean? In stockbroker terms, an equity is dead money if it languishes at a low price and with low trading volume. (Does this sound like a few of your mining shares?) However, before price turns higher, trading volume often picks up. This uptick in volume is typically a sign of growing/new investor interest in the equity, and in many cases, this renewed interest in the shares eventually leads to a higher price.

For years at TF Metals Report, we've been able to translate this adage to COMEX gold—with one difference. It's not daily trading volume that is noteworthy. Instead, it's the volume of total contract open interest. In the simplest explanation, total contract open interest grows as speculative hedge fund investment grows. The funds get long and The Banks get short, and open interest increases.

To wit, it's very difficult for COMEX gold to rally in price when total open interest of COMEX contracts is at multi-year lows. Again, think of it as the distressed and overlooked common equity that the old stockbrokers used to talk about. Low volume means that nobody cares. It's dead money with nothing to move it.

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I don't know...
Low OI at the Comex could be a sign that traders are leaving the Comex and moving their business into other exchanges, in which case the gold price would rally while Comex OI stays low

Peter89 said:

Volume Precedes Price​

To wit, it's very difficult for COMEX gold to rally in price when total open interest of COMEX contracts is at multi-year lows. Again, think of it as the distressed and overlooked common equity that the old stockbrokers used to talk about. Low volume means that nobody cares. It's dead money with nothing to move it.

Click to expand...

... aaand there you go!

Two Types of Price Rally​

In summary, what just took place? A technical breakout following some very gold-positive news led to a massive rush of speculator cash into COMEX gold futures. Price rose 7% as total contract open interest rose by 30%

Now contrast that with the ongoing rally in the COMEX silver price. Over the same period of Thursday, February 28, to Friday, March 8, the COMEX silver price rose by $1.92 or about 8.5%



However, total open interest in COMEX silver declined over the same period from 146,515 contracts to 142,481. So, unlike gold, where price and OI surged together, COMEX silver had a price rally while total contract open interest fell by 2.8%.
What's going on in this case? You will almost always have a Spec short squeeze on your hands whenever you see price rising and open interest falling.

Again, the rally in COMEX gold was driven by an easily recognizable, long-term technical breakout. How easily recognizable? See for yourself:



But COMEX silver is nowhere near that type of technical breakout. To achieve something similar, price will have to move decisively up through the $28 level...and it's not even to $26 yet! WHEN that breakout comes, hot speculator cash will flow into COMEX silver too. However, as you can see below, the breakout is still a long way away.

Silver could theorhetically double in a 6-month time period whereas it is highly unlikely gold would do that at current levels.

nickndfl said:

Silver could theorhetically double in a 6-month time period whereas it is highly unlikely gold would do that at current levels.

Click to expand...

if 2x is to double, what is 5x?
to fivable?

5x = quintuple

nickndfl said:

Silver could theorhetically double in a 6-month time period whereas it is highly unlikely gold would do that at current levels.

Click to expand...

Silver could quintuple in a 6-month time span

Credit to PMB

I have been watching metals prices, and buying in, for 20 years.

Never, in my time, or in charts I've looked at - going back to 1975, when gold was legalized for private sale - has gold ever behaved that way. Silver, I haven't tracked so carefully - but I don't remember seeing any such action.

The metals are clearly manipulated in price. Typically, one would expect a manipulated market to ultimately collapse, in its divergence with reality, with true buying pressures...but we're in Clown World now, where fundamentals, including economic laws, no longer seem to matter. Not a bit.

The manipulation schemes will eventually fail, but probably by the collapse of the fiat-dollar.

Checking In on Silver Prices​

In our annual macrocast that was written back in January, we projected that COMEX gold would break out this year—and it has. However, I was cautious in assuming that COMEX silver would quickly follow with its own breakout. Here's an excerpt:



In short, for COMEX gold to run to $2300, it had to first break $2100. For COMEX silver to run to $35 and beyond, it has to first break $28. And to break $28, it has to first break $26! Below is an updated version of the chart posted above. As you can see, progress has been made but a breakout to rival gold's is nowhere near. At least not yet.




That the breakout in silver is still pending is frustrating to many silver stackers, myself included. However, it's actually beneficial. Why? Because the breakout is coming. Of that, you can be certain.

How can I state this with such confidence? Because when gold moves to $2300, the gold/silver ratio is not going to be 100:1, implying a silver price of $23. And when gold moves next to $2500, the gold/silver ratio won't be 100:1 then either, and silver won't be $25. Instead, even if we use a median gold/silver ratio of 80:1, gold at $2300 implies silver at $28.75



But the thing is, when silver breaks out later this year or next, it will receive the same rush of attention and speculator cash that gold is currently enjoying. As such, the price target will not simply be $29 or $31. Instead, the initial goal will be $35 or higher. That's a greater than 50% move from here and one from which you could greatly profit if you get correctly positioned before it begins.

Podcast, nothing to see, can listen in one tab, surf the forum in a different tab.

Wednesday With The Jackass​

Because of "Coffee with TF" last Friday, we didn't record our usual holiday weekend Jackass. But don't dismay. The Jackass graciously pushed back a few days and he stopped by on Tuesday to record this very insightful podcast.

We tried to stay focused upon gold, silver and the eventual "reset" over these 45 minutes and Jim did a great job. Jim is always full of wisdom and insights but he was particularly helpful in this call so please take some time to give it a listen.

More:

TF Metals Report Podcast Highlights - Week of April 1-5, 2024​

Apr 6, 2024

9:33

Nothing to see, can listen in one tab, play around the forum in a different tab. DYODD

BRICS GOLD train leaving the station - Destination Revalue Rd. - LFTV Ep 169​

Apr 19, 2024

In this week’s episode of Live from the Vault, Andrew Maguire is joined by TF Metals Report’s Craig Hemke to address the community’s pressing questions on the FED’s suppression struggles, predictions for gold and silver and insight into BRICS.

The precious metals experts explore the significance of physical gold deliverability towards the success of the BRICS currency, which is forcing Western central banks to drastically reevaluate their predictions on the gold price.

45:20

Timestamps
00:00 Start
01:50 Overall market update
10:10 The impending support levels for precious metals
21:45 Ongoing frustrations with gold trading reports!
25:14 An update on China’s gold strategy
27:16 What are the FED and COMEX up too?
33:30 Is BRICS behind the rally of gold to all-time highs?

TF Metals Report Podcast Highlights - Week of May 6-10, 2024​

May 12, 2024

8:25

Podcast here, nothing to see, can listen in one tab, play around the forum in a different tab.

TFMR Podcast - Friday, May 17​

As you know, I'm currently traveling to a special event with old friends that will be held over the weekend. Therefore, there won't be time today to record your usual Friday wrap-up. With that in mind, I called up DenverDave on Thursday and got his thoughts on the current state of the precious metals and the mining shares.

This podcast was recorded on Thursday at about Noon ET. At that point, neither Dave nor I could know where Comex silver would finish the week. Would a massive raid materialize on Friday, designed to smash price back down below $29 or even $28? On the other hand, would the rally continue and allow for a weekly close at/near/above the breakout level of $30. We didn't know the answer on Thursday but by the time you're listening on Friday or Saturday, you will know.

More:

TF Metals Report Podcast Highlights - Week of June 10-14, 2024​

Jun 16, 2024

10:22

TF Metals Report Podcast Highlights - Week of June 17-21, 2024​

Jun 23, 2024

8:18

TF Metals Report Podcast Highlights - Week of July 8-12, 2024​

Jul 13, 2024

12:22

TF Metals Report Podcast Highlights - Week of July 22-26, 2024​

Jul 26, 2024

7:51

Nothing to see, can listen in one tab, play around the forum in a different tab. As usual, take this fwiw and dyodd.

Can DOGE Save the US? - Craig Hemke​

Dec 13, 2024

Kerry Lutz talks with Craig Hemke from TF Metals Report about the latest developments in precious metals, Bitcoin, and the global economy. Craig explains the recent performance of gold and silver, with silver showing strong technical signals that could lead to institutional interest and future growth. He also discusses Bitcoin's climb past $100,000 and its role alongside precious metals as an alternative to fiat currencies. The discussion explores the challenges of managing government debt, the difficulties of cutting spending without harming GDP, and the risks associated with fiscal and monetary policy decisions. They address the increasing push for cashless societies and the potential implications of Central Bank Digital Currencies (CBDCs) on personal financial freedom.

28:49

PMs are going higher. Pick your buy point and do it.