flash smashAfter consolidating near $1200 and $19.40 throughout the overnight Asian and London sessions, gold and silver have just been treated to another vertical waterfall smash, with gold plunging towards the June low of $1178 with a last of $1181, and silver plunging nearly $1 through $19 to $18.67!

*Update 10am: Whip-saw volatilaty continues as gold and silver are now spiking vertically, as silver retraces entire COMEX open smash with a last of $19.75, and gold is up $35 off its lows to $1215!

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Silver breaks $19 and appears headed for a retest of the June low at $18:

Gold appears likely to test the June low of $1178 in the next hour:

Will gold and silver bounce off of support at their June lows, or will the cartel successfully smash gold and silver to new bear market lows to end 2013?  It appears The Fed would like to send gold and silver out on their lows for 2013 and the bear market.

Happy New Year from The Bernank!

*10am update: It appears that rather than closing the year at their lows, a short squeeze has developed, and we are looking at the potential for a majorly bullish double-bottom outside reversal to close 2013!

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  1. Good luck and best wishes to all you stackers in 2014. Gold and silver are literal bargains now, much like in 1999, 2001 and 2008. Not sure how long prices can remain this low but it certainly isn’t sustainable for many of the miners.
    It also appears the Bank of Canada is now selling what little gold it has left.


  2. I’m on the silver buying sites right now trying to catch the low end. So far $20.72 free shipping. I expected something like this to happen around this time.
    It’s going to be one interesting year for we Stackers. Keep Stacking

  3. Crikey BOP  Only a central bank could sell gold at a low to balance the budget.  Hey people, spend less.  I know the Canadians have a sense of humor–the Canadian nickel has the image of the queen on one side and a beaver on the obverse, but going for another Brown’s bottom doesn’t seem cricket.
    PS Charlie
    that Gulliver cartoon. I didn’t know Liberace got his start in animation 😉

    • The buying seems more vigorous here though for sure. Normally we don’t make a new high for the day, particularly right after the sell-off. Typically, it spikes down, then up only modestly, and then consolidates or moves down steadily for the rest of the day.

    • 100% agree, this time they also jacked up the s&p futures at the same time when they smash the metals down, the miners were OK comparing to futures metals

    • What is the significance of $17.76? I’m not a technical analysis guy so I’m curious. Is it one of those “wave patterns” that I hear a lot of chatter about? 

  4. Bought a monsterbox (500 coins) of Silver Maple Leafs today , paid 17.45 Euro / coin, great present to celibrate New Year !!! FED-SWAT-SMASH team : thank you very much !!!!
    Happy New Year and greetz from Riga, Latvia

  5. Welcome to the show!  On today’s episode of “Dial a Price”, we cranked her hard over to ‘sell’ to juice this thing.
    Having closed out some really low shorts, we now crank it back to the “Norm” setting. 
    LoL, what a joke these prices are!  They had 5 minutes at the bottom and took advantage.  ‘Priceless’, that’s the PM market!  I wonder if the PM fix will be melodramatic as well.  Stay tuned!

  6. Some gold bulls are calling for economic  prosperity to bail out the PM market, I have my doubts on this theory. “investors didn’t understand that if money supply has declining velocity, there is no meaningful inflation created”   “The probability of a turn up in money velocity in 2014 is growing, because corporate spending is likely to grow.”  http://www.321gold.com/editorials/thomson_s/thomson_s_123113.html
    Without the velocity moving higher, PM prices are in trouble. (Velocity of M2)  http://www.graceland-updates.com/images/stories/13dec/2013dec31velocity2.png
    “The basic materials sector is telling us that there is truly a global recovery taking place at the moment.”     Strong breakouts in the Baltic Dry Index, basic materials, chemicals, copper, coal, and steel.  http://www.kitco.com/ind/Tablish/2013-12-30-Weekend-Report-And-NOW-for-Something-Completely-Different-Basic-Materials-Look-Very-Interesting.html

    • @Zman: Gold and silver can perform well under a growing economic backdrop.  That’s what happened during the early 2000s to roughly late 2006 period.  And note too that the velocity of money had a big bounce during that period too (within an overall downtrend that goes way back:  http://research.stlouisfed.org/fred2/series/M2V )
      In the long-run, the correlation between gold and total Federal credit creation of the United States is rather tight, regardless of good times or bad, and the velocity of money.  Reserves held at the Fed do mater, in the long-run.

    • @Flying Wombat   “In the long run, the correlation between gold and total federal credit creation of the United States is rather tight.”
      Is was until 2011, since then it would be fair to say a major decoupling as taken place.  When or why this decoupling changes is anyones guess.
      The problem I see is, we are living in a post credit crash (2008), the normal business cycle (since WW2) is over.  There is not going to be a credit expansion coming to the developed world, now going into the 6th year,  this could last decades.
      With that being said, how is velocity ever going to pick up?    Other than a major move down in the dollar, I don’t see it.

    • @zman >>>The problem I see is, we are living in a post credit crash (2008), the normal business cycle (since WW2) is over.  There is not going to be a credit expansion coming to the developed world, now going into the 6th year,  this could last decades.
      My God, I actually partially agree with Zman … but no it won’t last decades because of the below,
      >>>With that being said, how is velocity ever going to pick up?
      When the overseas bourses fully open their doors and multiply like rabbits, and these rising foreigners inject the credit into the developing world that the Western world won’t, and the third and developing world that aren’t in civil chaos rush into these bourses to strike up deals … the same time that even Western peoples realize the New York and London (& that harlot Tokyo) markets have a real alternative … then every US dollar that is sequestered overseas comes back Tsunami style… but of course that’s when the Western world starts a war and blames it on their enemies; but perhaps War Politics is not the best subject for people who are transfixed with a world simply of Paper and Digit Transactions, where mass Sovereign Risk is simply ignored as unpredictable from a graph trend, thus it is treated like it does not exist.
      All it would take is One Airliner to take out the new Trade Center … I can hear it now “those damn Chinese have really gone and done it this time” (even though they own over 10 floors of the new one). If this doesn’t happen then maybe they can turn these 10 Floors into the most celebrated Ping-Pong Complex in the Western Hemisphere in order to poke fun out of the non existent, self-imploded reputation of the once great (and partially honest) Western Finance system.
      Zman will lament … he will throw ashes on his head and don the customary sackcloth … days of mourning, days of wrath.

  7. zman  I think the velocity of money will drop in 2013 for a couple of reasons.   Frank Dodd is going to crush loan volume as banks will prefer to continue their risk free loans to the Fed  followed by dramatic curtailment of loans to consumers and businesses.  The economy will be badly hurt by these actions
    BASEL III requires even greater retention of capital to meet this BIS ECB sponsored regulation, imposed on our TBTF banks.  Capital is forcibly locked up.
    Between these two situations–Frank Dodd/Volker rule and BASEL III, the banks will be holding their capital tighter than a pederast holds his a** in supermax. 
    Can the velocity of money go negative?
    NIRP will be one important deciding factor at to whether individuals and businesses remove their capital from banking cash parking lot that charges the depositors by the hour to hold their FIAT.
    The only other place I can think of that charges by the hour is a brothel. Or something to that effect
    Baltic Dry Index up? Probably a dead cat bounce.

    • @AGXIIK   I agree, despite some very bullish signs of global economic strenght, I don’t see the velocity of money increasing.  There will be no credit creation, there will be no real corporate investment, there will be no fiscal stimulation.
      For PM’s to move higher in 2014, we need to see a big drop off in economic activity, and then even more desparate monetary policy. The key will be the lack of confidence in the economy and Fed policy.  If 2014 is status quo, then the metals trade flat to down in my opinion.

    • @AGXIIK >>>Can the velocity of money go negative?
      Don’t give the Fed any ideas AG.
      We all know the Fed discovered the Philosophers Stone and is keeping it secret, so I’m sure they could cook up a scheme to bring about the impossible; Negative Velocity … hmmm, maybe Confiscation is a form of negative velocity, ie, the opposite of buying something is being robbed instead?
      Thus overall negative velocity of money would be when total $$qty confiscation outstrips total $$$qty purchases within the same period? But I’m sure confiscation would not qualify to be legitimately used as a statistic at Fed.Stats.Gov.BullSh*t or wherever by the leaders of Gotham City.
      I think I have solved your riddle me thinks???

  8. I look for FIFTEEN to be the magic number.  If it gets to fifteen and change, then the sparks will indeed fly.  There will be lots of weak hands that turn loose of their silver, and the bounce from there will be substantial.
    I’d be hoarding the worthless greenbacks to dump at that point…probably within the first two weeks of Jan!!!! Won’t have long to wait, me thinks.
    To all the regulars here, AG, Woolly, Dirt, Ed, Mainiac, et al.  Have a safe, New Years!  See you on the other side of the moon!

  9. holy bat crap  WNBAS  that was a scary piece of art work
    I actually like the nihilistic Joker.  The second iteration of the Batman Movie was a classic.  If one watched past the superficial theme there is more than a bit of non-matrix symbology.  I think the Joker is the essential  representative  for negative velocity of money when he burned the 20 ft high stack of FIAT.  In a more sublime way the negaative velocity would be pension confiscations, bail-ins and outright theft of FIAT assets.  
    And it is the law of the land,  requiring little more  than the high sign from Obama or Yellen to commence with the removal of our substance This FIAT substance, such as it is, is still the ‘illusory wealth’ retain by most people 
    Thus I stack.

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