Is Bottom In For The Latest Gold Market Paper Attack?

The move by Modi to eliminate large-denomination cash bills from India has set off an unanticipated physical gold buying frenzy that has driven Indian ex-duty import premiums in the mid-$30’s.  It’s the widest I’ve seen in them in the many years I’ve been tracking that data (via John Brimelow’s Gold Jottings report).  “”I’m getting non-stop calls from unknown numbers from people asking for gold,” the jeweller told a Reuters reporter in an interview inside his shuttered showroom..”

Ditto for China.  The SGE premium last night was $12.59 to spot gold.  As Brimelow describes: “In this case the high premiums probably simply reflect capacity constraints among Chinese import dealers. Possibly there is a Trump/devaluation effect boosting local appetite, besides of course the price decline.”

My personal view is that, given the extreme amount of paper being launched at the LBMA and Comex right now, and given that the price of gold seems averse to going any lower (at least for now), the worst of the beat-down is over.  Too many people are looking “down” right now…Eric Dubin has also called a “double bottom in gold.”   He and Jason discussed the precious metals market, among many other topics in their lates Welcome to Dystopia episode, which you can access here:   The Bottom Is In.


7 thoughts on “Is Bottom In For The Latest Gold Market Paper Attack?

  1. $1223 was a good enough bottom for me. I reloaded on all my Jr. positions this morning after being stopped out last week (surprise). I don’t think we will be revisiting sub-$1200 gold with the war on cash intensifying. Very interesting watching gold trade like a currency in relation to the USD/JPY and DX. Watching the yen to stay below 110 and DX below a 102 handle.

    Thanks for your work Dave. I enjoy your podcasts and market analysis.

  2. Zerohedge just published an article on the latest TIC report, which shows unabated foreign CB sale of treasuries, particularly China and Saudi Arabia. Of course, this report lags, but if the selling continues, or even accelerates given Trump’s economic plan, then this might go a long way to explaining the surge in USD strength.

    How those dollar proceeds are used and where they wind up, ie. the US, could be the next up leg in inflationary expectations and gold.

  3. With the US Dollar hitting 14 year high today, I’ve now personally changed my position on something which I NEVER EVER would’ve thought possible. Of course, everybody’s individual situation & mileage may differ. I’m only speaking for myself.

    To date, my positions have consistently been as follows:

    1. DO NOT buy precious metals on margin by borrowing money, especially home equity line of credit.

    2. DO NOT move funds for what you know as absolutely certain financial commitments (mortgage payments, utility bills, insurance premiums) etc into precious metals.

    3. After above 2 rules are followed, how low precious metals get slammed down w/ manipulation should be irrelevant. Calculating precious metals holdings day-to-day w/ a fraudulent US Dollar measuring stick unit (like a stock portfolio or checking real estate valuations on Zillow) would then be a mistake. I don’t care even if you bought gold @ $1800 or silver @ $45. If you DID NOT buy it on margin, if you DO NOT need to sell it today in order to pay for immediate commitments e.g. insurance premiums, college tuition payments etc., YOU HAVE NOT LOST ANYTHING. Your “investments” HAVE NOT “tanked”. You basically trapped your wealth into tangible storage of energy & human labor. The coulda-woulda timing argument of: “But I could’ve timed the game differently & trapped wealth into even more ounces of gold or silver later” is an IRRELEVANT argument to me personally. Could you have timed the game differently in 2014 when the world came dangerously close to NATO-Russia military confrontation, after Malaysian Airlines jet was fraudulently shot down in Ukraine? When Putin upped his game in Syria in 2015, really going after ISIS? When Turkey shot down Russian airforce Sukhoi in 2015? I’m not terribly sympathetic to any “coulda-woulda” timing arguments, when 1 miniscule misstep among any of the examples I cited could’ve led to full-blown global confrontation. I’m sure there were many other crazy situations over & above what I already cited that could have caused a panic by now. It’s “Monday morning quarterbacking” to claim that no panic broke out, so timing of those precious metal purchases were wrong.

    Having said all of above positions (which I still believe in deeply), following is my change of position:

    If the US Dollar keeps fraudulently spiking up like this, and if paper-fraud prices for gold/silver get hammered more e.g. gold going into $1000s or into 3 digits, silver going down to $12 or even into single digits, then & only then:

    I’ll actually consider making physical precious metal purchases on margin. Shocking for me to even think about it, but true! I’m sitting on dry powder of a 6 figure marginable position, with not a single penny borrowed yet. Following basic laws of physics, I can’t possibly foresee such extremely fraudulent slam-downs to be sustained, in which case I plan to sell back portions of purchase to immediately pay down any accrued interest.

    Let’s wait & see if it ever comes to such crazy scenario. I really hope it doesn’t & the bottom is already in as Dave speculates. If Dave is wrong & the bottom is not in, I’ve decided to fight the manipulators with a change in my position.

  4. As far as manipulation is concerned, think about this.
    “The bankster mafia” sold the equivalent of three years
    of gold production via paper between last Tuesday night
    and last Friday. The banksters only moved gold down $120.00
    per ounce which includes the $65.00 run up on election night.
    The amount of paper gold sold and the price drop to me say’s
    the banksters are now facing the inability to create significant
    price drops even with massive paper sales. I really do think, all
    things considered that the banksters are getting ready to crash
    the system soon after Trumps inauguration.

  5. As of the time of this post the are still pushing prices down a bit in both G & S.

    I look forward to you or someone explaining where the COMEX stands as far as the amount of remaining open interest, i.e. how much leverage do the have left to push downwar with….without creating a buying frenzy [at least in gold] that pushes prices back up.

  6. I believe the real reason for india to cancel the old large currency bills is counterfeiting. I’ve read recently that they will introduce a 2000 and a new 500 rupee note

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