In May 2006 the United States Government ORDERED the price of gold down once it had reached $730 per ounce. It appears we are looking at the same drill with the Working Group on Financial Markets and friends going all out to calm down fears of serious systemic financial market problems in the US.
The market news is DREADFUL as you will ascertain when going through this MIDAS, yet the DOW is taken up early after a horrendous, surprise late selloff on Friday. This is totally consistent with how the US stock market has traded since 9/11. Every time fear creeps in and a potential for the public to really run for the hills, the PPT steps in and turns the market around. Thus the moral hazard builds and builds, even as Rome is burning.
As far as gold is concerned, it could have been up as much as it was down today. The lack of pundit bullishness was a positive, while the 95% Market Vane consensus bullishness among market participants was a negative. Corrections such as this one are part of the game and quite the bore if you are not trading the futures market. Nothing has changed. The BIG PICTURE for gold and silver is off the charts in our favor. It just means a little more time before we go up again, make new highs, and make more money.
What IS aggravating is how The Gold Cartel caps the market MUCH lower than where it should be to correct.
There are reasonable concerns that this takedown will be steep and prolonged like the one which began in May 2006. Not so in my opinion. The difference today from back then and other correction periods is the entire US financial market dilemma is profound and worsening … AND the bums have far less gold to throw at the market to keep the price down. Meanwhile, demand for physical has taken off round the world. This bashing ought to be swift. Once we get through margin call liquidations, etc., we should stabilize, then rise sharply. There are a lot of money managers waiting to buy gold on sharp dips … below $800 per ounce. They will be competing against each other for supply.
There is talk today about yen carry trade unwinding and a major reason for havoc in the metals markets. Fair enough, but then why didn’t it affect the US stock market early? That makes no sense, unless you comprehend what the PPT is engineering. They were surprised on Friday and failed to get their Hail Mary plan in on time. So they waited until this morning. Just like the explanations of supposed “general fears” make no sense when gold sells off with the market. Then why doesn’t the price go up when those fears are alleviated via the US stock market going up?
(These jerks … the US stock market began to sink (DOG now down 15) after gold closed, so immediately the price was taken down $5 in the Access Market).
Such tedium. We are on our way to $3,000 to $5,000 an ounce. Time to go fishing or take a long walk.