Category Archives: Precious Metals

Jerome Powell Fails The Gold Standard Test

“You’ve assigned us the job of two direct, real-economy objectives: maximum employment, stable prices. If you assigned us [to] stabilize the dollar price of gold, monetary policy could do that, but the other things would fluctuate and we wouldn’t care,” Powell said from Capitol Hill. “We wouldn’t care if unemployment went up or down. That wouldn’t be our job anymore.” – Jerome Powell in response to a question about returning to the gold standard

Everything about that answer is incorrect. To begin with, the Fed apparently now has three “assigned” jobs: employment maximization, price stability and “moderate long-term interest rates” (federalreserve.gov).  How can we take anything Powell says seriously if he’s not aware of the the duties of his job?

But let’s set that issue aside.  In fact, if the dollar was backed by gold, the Fed would be irrelevant – the gold standard would take away completely any need for a Central Bank. Powell and his cohorts would not have any job at the Fed.

The function of a gold standard is not to “stablize” the price of the currency which is backed by gold.  Interest rates can be used to “stabilize” the value of currency.  Free markets, if ever allowed, would set the price of money.  The function of the gold standard, fist and foremost, is to stabilize the supply of currency in relation to the wealth output of an economic system.

A Central Bank is not necessary to any economic system which has its currency backed by gold.  If the U.S. had its monetary system tied to the value of the gold it holds in reserve,  it would automatically serve the function of price stability. Remove gold from the equation and the macro variables fall apart rather quickly.

But let’s use reality to test this.  Prior to the closure of the “gold window,” the U.S. largely was a creditor nation and never incurred unmanageable Government spending deficits except during wars.  In fact, the amount of Treasury debt issued to fund the Viet Nam war ultimately led to the removal of the last remnants of the gold standard.  This is because the U.S. Treasury did not have enough gold left to redeem debt issued to foreigners with that gold per the Bretton Woods Agreement.  In short, the U.S. ran out gold so Nixon closed the gold window.

Take a look at the economic and fiscal condition of the United States from inception to 1971 and post-1971.  Any “economist” or Central Banker (Powell is not an economist and probably never thought about gold until he was prepped to answer the possibility of a gold standard question) who opposes the gold standard is ignorant of historical facts or has ulterior motives.

Aside from his inability to respond intelligently to the gold standard question (he should have taken notes from Greenspan), Powell knows that  a zero interest rate policy and money printing are the only ways that he and his elitist cronies can keep the system from collapsing until they finish extracting the last remnants of wealth from the public.  A gold standard would stand in the way of this effort.

Under a gold standard, the amount of credit that an economy can support is determined by the economy’s tangible assets, since every credit instrument is ultimately a claim on some tangible asset. But government bonds are not backed by tangible wealth, only by the government’s promise to pay out of future tax revenues, and cannot easily be absorbed by the financial markets. A large volume of new government bonds can be sold to the public only at progressively higher interest rates. Thus, government deficit spending under a gold standard is severely limited. The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. – Alan Greenspan, “Gold And Economic Freedom,” 1966

It Looks, Sounds And Smells Like A Gold Bull Market

Gold tends to perform the best when the real rate of interest (interest rates minus the real inflation rate) is negative. For now, the Central Banks have been able to contain the movement of gold in order to prevent the price from doing what it should be doing when interest rates are negative.

With that enormous amount of negative yielding debt globally, and Treasury yields in the U.S. heading south quickly, from a fundamental standpoint there’s a high probability we have started the next big move higher in gold. Silver will eventually “catch up” and begin to outperform gold. That said, get used to a higher level of price volatility in the precious metals sector. Keep a core position but sell rallies and buy sell-offs if you want to trade the volatility. Otherwise, sit tight and be right.

The Prepared Mind invited to its podcast to discuss a wide range of issues from precious metals to geopolitical problems. Here’s Part 2 (click to view Part 1):

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You can learn more about  Investment Research Dynamics newsletters by following these links (note: a miniumum subscription period beyond the 1st month is not required):  Short Seller’s Journal subscription information   –   Mining Stock Journal subscription information

A Predictable Gold Price Attack – Now What?

Today’s attack on gold and silver was one of the most predictable in my 18 years of involvement in the precious metals sector. On Wednesday just before the close of the NYSE, I loaded up at-the-money puts on NUGT that expire today. I sold them right after the open for home run trade. The sector has been grinding higher since the first hour of trading, which is bullish.

Trevor Hall and I discuss the recent move up in gold (and the new move below $1400), silver expectations, and the increasingly positive investor sentiment toward the junior mining sector. We also share a few stocks which we have likened over the first half of 2019 along with a few disappointments. You can listen to the discussion by clicking here: MINING STOCK DAILY  or on the graphic below:

The Mining Stock Journal  covers several mining stocks that I believe are extraordinarily undervalued relative to their upside potential. I also present opportunistic recommendations on select mid-tier and large-cap miners that should outperform their peers.  In response to subscriber requests, in the latest issue released Wednesday  I presented an initial opinion on Great Bear Resources. You can learn more about this newsletter here:   Mining Stock Journal information.

The Flight To Safety In Gold – A Conversation With The Prepared Mind – Part 1

The Chinese have been slowly trading out of their U.S. dollar exposure and converting it to gold. Something a lot of analysts don’t pay attention to because they don’t even know what the facts are [with regard to the actual amount of physical gold held by China] when they look at China and proclaim that China has a debt problem.  Sure, China has a fiat currency-derived debt problem but it’s nowhere near as bad as the U.S. fiat currency-derived debt problem. And guess what? On the other side of the paper debt China has 25,000-35,000 tonnes of physical gold they’ve hoarded over decades.

The Prepared Mind invited to its podcast to discuss a wide range of issues from precious metals to geopolitical problems. Here’s Part 1:

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You can learn more about  Investment Research Dynamics newsletters by following these links (note: a miniumum subscription period beyond the 1st month is not required):  Short Seller’s Journal subscription information   –   Mining Stock Journal subscription information

“Dave mate. You’re making me rich. I don’t know what’s going on with Gold Fields but they’ve spiked up 33% and my calls are going ballistic.” – Mining Stock Journal subscriber in Australia

Gold: BOOM Goes The Dynamite

After dancing around the $1350 level (August futures basis) the price of gold launched in three stages after the FOMC circus was over on June 19th. The first move enabled gold to break above and hold the $1360 area of resistance that has been referenced ad nauseum for the last three years. Then, two “reverse flash crashes” later on Thursday and Friday that week, gold powered well above $1400 before a “flash crash” at the end of Friday’s trading pushed gold back below $1400 for the weekend. On Monday afternoon (June 24th) gold broke free from  the shackles of official price containment and sustained a move over $1400 and ran up to $1440.

As I expected, a combination of profit-taking by the hedge funds chasing momentum higher with paper gold and official efforts to push the price of gold lower triggered a sell-off that tested $1400 successfully. Gold closed out the week (August futures basis) at $1412.

While I was expecting a move like this at some point in response to the Fed reimplementing loose monetary policy, I thought that it wouldn’t happen until the Fed signaled that it would begin printing money again. It’s not clear to me if this move is being fueled by fundamentals and a flight to safety or if it’s hedge fund algos chasing price momentum. It’s likely a combination of both.

Independent of any economic disruption that may or may not be caused by the trade war, economic activity globally is deteriorating rapidly. Every country around the world recklessly printed money and piled up debt which artificially revived economic activity after the 2008 de facto systemic collapse. Mathematically the world can’t print money and issue debt ad infinitum. We may have hit the wall in that regard over the last 12 months. The trade war is being used as a convenient scapegoat. It’s like blaming the start of World War I on the assassination of Archduke Franz Ferdinand…

I believe there’s no question that highly negative events are unfolding “behind the scenes” which are sucking liquidity out of the system. I believe these events will emerge in plain sight well before year-end. The yield curve inversions (Treasury, Eurodollar futures) are telling us there’s hidden explosives detonating that have been contained for now. I have no doubt that the troubles are connected to primarily to Deutsche Bank but also stem from the early stages of a subprime debt problem. The “secret” meeting held a couple weeks ago by Mnuchin and the Financial Stability Oversight Council concerning “alarms” in the junk bond market was a tell-tale as was the “bad bank” plan announced by Deutsche Bank, which was curiously devoid of any details on how it would be funded or what would go into it.

The systemic problems and geopolitical animosities percolating behind “the curtain” are not lost on those with an inside view of the action. I expect an aggressive attack on the gold price next week. The Fourth of July observance falls on Thursday, which means most Wall Street trading desks will be lightly staffed most of the week. Low-volume holiday periods are the favorite time for the bullion banks to stage a raid on gold. The success of this raid is crucial to maintaining the illusion that obvious systemic problems are manageable.

Any attempt to push the price of gold lower will be helped by the fact that official gold imports into India have stopped while the Indian public digests the recent surge in the price of gold. This is typical behavior by India after a sharp move higher in gold. Smuggling to avoid the import duty likely continues unabated. But the removal of India’s official bid from the physical gold market is a window of opportunity for the western gold price managers to make an effort to push bold back below $1400 using paper.

If any attempt to  manipulate gold back below $1400 fails in the next week or two, it means that unhealthy quantities of brown fecal matter are connecting with the fan blades – out of sight for now except for the signal coming from the gold.

Any sustained move higher in gold and silver will ignite a fire below the mining stocks, especially the historically undervalued juniors. My Mining Stock Journal covers several mining stocks that I believe are extraordinarily undervalued relative to their upside potential. I also present opportunistic recommendations on select mid-tier and large-cap miners that should outperform their peers. In response to subscriber requests, in the next issue released this upcoming week I’ll present an initial opinion on Great Bear Resources. You can learn more about this newsletter here:   Mining Stock Journal information.

Gold Is Going Higher – But Brace Yourself For Volatility

Short of a raid orchestrated by the central planners to fasten tighter the cap on gold (which remains a real possibility given the historical record), the yellow metal shouldn’t encounter much price resistance until above $1,500/oz.  – Adam Taggart, Peak Prosperity

I agree with the statement above from Adam Taggart but an aggressive price attack by the banks who operate the Comex is inevitable.  In fact, based on the big jump in gold contract open interest and the spike up in EFP/PNT transactions – Privately Negotiated Transactions /Exchange for Physicals – it’s likely the banks have been setting the trap for another massive open interest liquidation price control operation.

Let me explain.  The banks are unconstrained by the amount of paper contracts they print and feed into the market to supply the demand from the hedge funds, who are the primary buyers. By unconstrained, I mean that the amount of gold represented by paper derivative open interest is far greater than the amount of actual physical gold held in Comex vaults.  Gold and silver are the ONLY commodity contract products for which this disparity between open interest and underlying supply of the physical commodity is allowed to occur.

As an aside, if the Comex were a true price discovery market, the amount of gold/silver represented by the paper contracts would be tied closely to the amount of gold held in Comex vaults.  When hedge funds rush in to buy futures, the market makers would then be required to wait until an entity holding contracts was willing to sell. This is how a bona fide price discovery market functions using price to clear the market’s supply and demand.

Instead, with CME gold and silver contracts, the banks print up new paper contracts to satiate buying demand.

Last week when the price of gold began to spike higher in response the FOMC policy statement released on Wednesday, the price of gold began soar.  Between Wednesday and Friday, the open interest in gold contracts spiked up by over 50,000 contracts – nearly 10%. This amount of paper represents over 5 million ozs of gold. As of Friday, the Comex warehouse report shows just 322,910 ozs of gold available for delivery (“registered”) and 7.6 million total ozs of gold. But the total open interest is 572,000 contracts, or 57.2 million ozs of gold, nearly 8x the amount of total gold held in Comex vaults.

But wait, there’s more.  During periods of aggressive price control, the activity of PNT/EFP’s also soars.  These transactions avoid settlement in 100 oz Comex bars per basic contract terms. Instead, it’s way for the banks to “deliver” under the terms of the Comex contract without producing and delivering the actual physical bar, recording the serial number on the bar under the receiving party’s name and moving the bar into an allocated account. It’s an extension of the fractional bullion system that is used to manipulate the gold price. It allows the banks to deliver phantom gold in lieu of delivering real bars.

On Tuesday the PNT/EFP volume was 8k and 5.9k respectively. On Wednesday the volume was 11.5k and 9.1k. On Thursday, when gold was soaring over $1400, the volume in PNT/EFP’s was  30k and 22k respectively.  On Friday the volume was 21k and 11.3.

On average, the daily volume of these two transactions is typically under 10k – except when the banks are aggressively implementing price management operations.

The banks use these transactions, along with feeding tens of thousands of newly printed gold contracts to the hedge funds. This drives up the open interest.  On Friday, May 31st, the open interest in Comex gold was 465k contracts.  The current open interest of 572k is approaching the level at which the price of gold was attacked on the Comex in each of the last three years.

The process is set up by letting the hedge fund algos chase the price higher and accumulate an excessively large net long position in gold contracts,  At the same time, the banks feed contracts into the buying frenzy and accumulate an offsetting net short position.  As the operation cycles through, the banks force the price lower by attacking the stop-loss levels set by the hedge funds as they chase the price higher.  The banks use the concomitant hedge fund selling to cover their shorts, thereby reaping enormous profits.

In September 2016, gold ran higher during the summer and the open interest had reached close to 600k. The price gold was dropped from $1200 to $1070.  In September 2017, the gold contract o/i reached over 580k and gold subsequently was taken down from the high $1300’s to $1125.  Then, in January 2018, the open interest once again was over 580k contract and the gold price was taken down from $1350 to $1200.

In all three price control cycles, the open interest fell below 500k as the banks unloaded long positions and the banks covered their shorts.

This is a long-winded way of explaining why I believe that sometime in the next 10 trading days  the market should expect an aggressive attempt by the banks to attack the gold price on the Comex – and to some degree on the LBMA.  We’ll know I’m right if we get a series of “fishing line” price drops sometime between now and the July 4th holiday. Fridays and pre-holiday trading days, when volume is light, is a favorite time for the banks to begin taking down the gold price.

The good news is, if you follow the sequence I described above from 2016 to now, the price of gold is establishing a series of higher highs and higher lows.  This tells us that the western Central Bank/bullion bank effort to control the price of gold is limited in its success.  This is likely because of immense demand from eastern hemisphere buyers (Central Banks, investors, citizens) who require actual physical delivery.

Furthermore, if I’m wrong about an imminent price attack to take the price of gold lower, it means that the Central Banks/bullion banks have lost control of the market – at least for the time being – and the market is experiencing Bill “Midas” Murphy’s “commercial signal failure.”  If this turns out to be the case, and it is ultimately an inevitability, strap in for some fun if you own physical gold, silver and mining stocks.

ZIRP And QE Won’t Save The Economy – Buy Gold

It’s not that we’ll mistake them for the truth. The real danger is that if we hear enough lies, then we no longer recognize the truth at all…  – “Chernobyl” episode 1 opening monologue

I’ve been discussing the significance of the inverted yield curve in the last few of my Short Seller’s Journal. Notwithstanding pleas from the financial media and Wall Street soothsayers to ignore the inversion this time, this chart below illustrates  my view that cutting interest rates may not do much  (apologies to the source – I do not remember where I found the unedited chart):

The chart shows the spread between the 2yr and 10yr Treasury vs the Fed Funds Rate Target, which is the thin green line, going back to the late 1980’s. I’ve highlighted the periods in which the curve was inverted with the red boxes. Furthermore, I’ve highlighted the spread differential between the 2yr/10yr “index” and the Fed Funds target rate with the yellow shading. I also added the descriptors showing that the yield curve inversion is correlated with the collapse of financial asset bubbles. The bubbles have become systemically endemic since the Greenspan Fed era.

As you can see, during previous crisis/pre-crisis periods, the Fed Funds target rate was substantially higher than the 2yr/10yr index.  Back then the Fed had plenty of room to reduce the Fed Funds rate. In 1989 the Fed Funds Rate (FFR) was nearly 10%; in 2000 the FFR was 6.5%; in 2007 the Fed Funds rate was 5.25%. But currently, the FFR is 2.5%.

See the problem? The Fed has very little room to take rates lower relative to previous financial crises. Moreover, each successive serial financial bubble since the junk bond/S&L debacle in 1990 has gotten more severe. I don’t know how much longer the Fed and, for that matter, Central Banks globally can hold off the next asset collapse. But when this bubble pops it will be devastating. You will want to own physical gold and silver plus have a portfolio of shorts and/or puts.

The Fed is walking barefoot on a razor’s edge with its monetary policy. Ultimately it will require more money printing – with around $3.5 trillion of the money printing during the first three rounds of “QE” left in the financial system after the Fed stops reducing its balance sheet in October – to defer an ultimate systemic collapse.

But once the move to ZIRP and more QE commences,  the dollar will be flushed down the toilet. This is highly problematic given the enormous amount of Treasuries that will be issued once the debt ceiling is lifted (oh yeah, most have forgotten about the debt ceiling limit).  If the Government’s foreign financiers sense the rapid decline in the dollar, they will be loathe to buy more Treasuries.

The yellow dog smells a big problem:

It’s been several years since I’ve seen gold behave like it has since the FOMC circus subsided. To be sure, part of the move has been fueled by hedge fund algos chasing price momentum in the paper market. But for the past 7 years a move like the last three days would be been rejected well before gold moved above $1380, let alone $1400, by the Comex bank price containment squad.

While the financial media and Wall Street “experts” are pleading with market participants to ignore the warning signals transmitted by the various yield curve inversions (Treasury curve, Eurodollar curve, GOFO curve) gold’s movement since mid-August reflects underlying systemic problems bubbling to the surface. The rocket launch this week is a bright warning flare shooting up in the night sky.

…What can we do then? What else is left but to abandon even the hope of truth, and content ourselves instead…with stories. (Ibid)

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You can learn more about  Investment Research Dynamics newsletters by following these links (note: a miniumum subscription period beyond the 1st month is not required):  Short Seller’s Journal subscription information   –   Mining Stock Journal subscription information

“Dave mate. You’re making me rich. I don’t know what’s going on with Gold Fields but they’ve spiked up 33% and my calls are going ballistic.” – Mining Stock Journal subscriber in Australia

Can Western Central Banks Continue Capping Gold At $1350?

“Shanghai Gold will change the current gold market with its ‘consumed in the East but priced in the West’ arrangement. When China has the right to speak in the international gold market, the true price of gold will be revealed.” – Xu Luode, Chairman, Shanghai Gold Exchange, 15 May 2014

The price of gold has jumped 5.8% in a little over 3 weeks. This is a big move in a short period of time for any asset. Two factors fueled the move. The first is the expectation that Central Banks globally will revert back to money printing and negative interest rate policies to address a collapsing global economy. The second factor, more technical in nature, pushing gold higher is hedge funds chasing the upward price-momentum in the Comex and LBMA paper gold markets.

The gold price was smashed in the paper gold market on Friday right as the stock market opened. 9,816 Comex paper gold contracts representing nearly 1 million ozs of gold were thrown onto the Comex in a five minute period. This is more than 3 times the amount of gold designated in Comex warehouses as available for delivery and 28% more than the total amount of gold held in Comex vaults per Friday’s Comex warehouse report.

Judging from the latest Commitment of Traders Report, which shows the Comex bank net short position growing rapidly, there’s no question that Friday’s activity was an act of price control. Furthermore, it’s common for the price of gold to be heavily managed on summer Fridays after the physical gold buyers in the eastern hemisphere have retired for the weekend. The motivation this Friday is the fact that the gold price had popped over $1350 on Thursday night. For now $1350 has been the price at which price containment activities are readily implemented.

The price of gold is most heavily controlled just before, during and after the FOMC meeting. The next meeting begins tomorrow and culminates with the FOMC policy statement to be released just after 2 p.m. EST. The event has become the caricature of a society that takes official policy implementation seriously. This includes the journalistic and analytic transmission of the event, which is literally a Barnum and Bailey production.

It seems the number one policy goal of the Fed and the Trump Administration is to keep the stock market from collapsing. But the Fed has very few rate cut “bullets” in its chamber to help accomplish this policy directive. Moreover, a study completed by the Center for Financial Research and Analysis showed that the S&P 500 Index fell 12.4% in the first six months after cuts started in 2007. The drop broke a post-World War II record decline of 9.5% set in 2001, when the Fed’s previous series of rate reductions got under way. Declines in the S&P 500 also followed moves toward lower rates that began in 1960, 1968 and 1981.

This suggests to me that the Fed will have to start printing more money. The only question  is with regard to the timing.  Judging from the steady stream of negative economic reports – a record drop in the NY Fed’s regional economic activity index released today, for instance – it’s quite possible the printing press will be fired up before year-end.

The rapid price rise in gold from $700 to $1900 between late 2008 and September 2011 was powered by global Central Bank money printing and big bank bailouts. We know money printing is on the horizon. But so are bank bailouts – again. The curious and highly opaque announcement that Deutsche Bank was going to create a “bad bank” for its distressed assets, which are losing half a billion dollars annually, suggests that the German Government and/or ECB is prepared to monetize DB’s bad assets while enabling the bank’s basic banking and money management business survive on its own.

This is just the beginning of what will eventually turn out to be a period of epic money printing and systemic bailouts by Central Banks in conjunction with their sovereign lap-dogs. Only this time the scale of the operation will dwarf the monetization program that began in 2008. The price of gold more than doubled with ease the first time around. In my mind there’s no question that the $1350 official price-cap will fail. At that point its anyone’s guess how high the price will move in U.S. dollars. But the price of gold is already breaking out in several currencies other than the dollar.

Something May Have Blown Up Already In The Financial System

The price of gold ran higher eight days in a row before today’s interventionist price smack. Technically, whatever that means, the gold price was likely due for a healthy pullback anyway. The price of gold is responding to what appears to be the Fed’s decision to begin cutting interest rates, though maybe not at the June meeting. Also, the Fed’s Jame Bullard commented that a $3 trillion Fed balance sheet should be considered the “new normal.” This means that close to 75% of the QE program was outright money printing.  Hello Weimar-style printing, so long U.S. dollar…

In 2007 the Eurollar futures curve was steeply inverted by late summer 2007. Back then Ben Bernanke assured the world that “subprime debt was contained.” In truth, it was already blowing up. Currently, the Eurodollar futures curve inversion is steeper now than it was in 2007 (graphic from Alhambra Investments, with my edits).

Silver Doctor’s James Anderson invited me to be his debut guest from his new perch in Panama. He had just set up his office rig and the internet connection was a bit choppy.  But we chatted about why the various inverted yield curves and the recent rise in the price of gold may be telling us that the brown stuff could already be connecting with the fan blades in the financial system. Here’s the link: Something Has Blow Up In The Financial System or click on the video below:

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You can learn more about  Investment Research Dynamics newsletters by following these links (note: a minimum subscription period beyond the 1st month is not required):  Short Seller’s Journal subscription information   –   Mining Stock Journal subscription information

Gold, Silver And The Mining Stocks Are Showing Signs Of Life

“Shanghai Gold will change the current gold market with its ‘consumed in the East but priced in the West’ arrangement. When China has the right to speak in the international gold market, the true price of gold will be revealed.” – Xu Luode, Chairman, Shanghai Gold Exchange, 15 May 2014

The quote above is for the benefit of anyone who refuses to acknowledge or accpet that the price of gold is manipulated by western Central Banks, led by the BIS, using the paper gold derivatives traded on the LBMA and the Comex as well as using “structured notes” in the OTC derivatives market. Those who assert that the precious metals market is not manipulated do so from a position of either complicity or ignorance.

The price of gold began spiking higher on Thursday, May 30th. Over that time period the front-month futures contract (August) has run from $1280 to $1340. I believe this is being driven primarily by the market’s perception – in response the steeply inverted Treasury and Eurodollar futures curves – that a significant problem or problems is/are occurring in the global financial system.

The idea for this chart came from a  chart I saw posted by @StockBoardAsset (he had it labeled “Gold/Silver”). The chart shows the XAU index since inception to the present on a monthly basis. I also edited the labels and added the British pound crisis label.

I like it because it shows why it’s highly probable that the precious metals and mining stocks – especially the mining stocks – are near the bottom of a long-term trading pattern that goes back 35 years. The low end happens to correlate with a period in which the stock market was at or near a top followed by a significant sell-off in stocks.

If I spent the time to create a chart showing the SPX to XAU ratio, it would look somewhat like the inverse of the chart above. I’m encouraged by the move in gold and silver over the last week. At some point there will be a pullback/ consolidation of the sharp price-rise. But if you study the chart above, it would appear that the mining stocks have the potential to make a big move in the 2nd half of 2019 and that move may be starting.

One of the “tells” which indicate the fundamental underpinnings are in place for a big move in the sector is the escalation in the frequency and intensity of price manipulation on the Comex.  The banks have been significantly enlarging their net short position in gold contracts plus the volume of PNT and EFP transactions (Privately Negotiated Trades and Exchange For Physicals) has increased substantially over the last couple of weeks. There’s a high correlation between the volume of PNT/EFP transactions and the price-capping efforts exuded by the Comex price-action.

Note: PNT/EFPs are a way for the banks to “deliver” under the terms of the Comex contract without producing and delivering an actual physical Comex bar, recording the serial number on the bar under the receiving party’s name and moving the bar into an allocated account. It’s an extension of the fractional bullion system that is used to manipulate the gold price. It allows the banks to deliver phantom gold in lieu of delivering real bars.