Even though precious metals have been blatantly crushed whenever a government report is issued or a lackey from the FED speaks lately, tomorrow might just be switch day according to a decent but not perfect metals analyst.

Regards - VHF

-

Quick Update

Turd Ferguson - TF Metals Report

May 3, 2012

Here comes a stream of consciousness. Probably not a good idea but here goes.

I think this is all a big setup. However, this time, it's an opposite setup to what we're used to.

The action this week seems to be a coordinated effort to suck in and trap as many spec shorts as possible ahead of tomorrow.

Every headline this week that could possibly be used to raid the gold market has been utilized.

Today is the latest example but note that the dollar was declining and silver was flat.

The decline after the claims number was released was on less than 2000 contracts. The Cartel pulled their bids and allowed the WOPRs to quickly drop price through some sell stops at 1640. This process has continued to this moment as gold has now made a low near 1635.

This final drop was worked in around the London PM fix and now gold will likely trade sideways to higher the rest of the day as WOPR positions are squared before the close.

The stage is now set for a massive short squeeze tomorrow. Look, I have no idea what the BLSBS will be. How could I know? Maybe we'll get 7.9%, 250,000 jobs and $100 down in gold. I have no idea. What I do know, however, is this: Today reeks of a final suck-in of shorts ahead of the number. Does The Cartel know what the number will be? Maybe. I can tell you this: The likelihood of them knowing ahead of time is infinitely higher than the likelihood of me knowing.

With so many weak handed longs stopped out this week, there are really none left. And now, all of the weak hands are on the short side. They look ripe to be squeezed.

A spike tomorrow, post the BLSBS, looks likely. Just as how The EE allowed the final silver spec longs to be drawn in on Feb 28 ahead of The Leap Day Beatdown, The Gold Cartel has allowed the final gold spec shorts to be drawn in today.

A spike tomorrow will cause extreme pressure on the gold shorts. A move back toward 1660 and beyond will cause them to cover. London is closed on Monday. This may cause additional shorts to cover. Would you want to be short over the weekend if NFP comes in at under 100,000?

Our pal Andy just sent me an email informing me that Shanghai silver traded with a premium to futures of $1.26 overnight! $1.26!. There is serious to extreme physical demand near $30 for silver. The paper market for silver is a joke and is being made obsolete. Anyone short silver is playing with fire.

Andy also told me of huge sovereign and central bank orders for physical at 1635 and 1625, though we were both surprised at the willingness to fill the orders at 1645. Every time The Cartel takes paper gold down, they lose more physical metal out the back door. This cannot continue much longer. It simply cannot.