The bullion banks/Central Banks seem to be having a problem pushing gold lower here. Nearly every evening (U.S. time zone) they take a sledge hammer to the price by dumping payloads of paper gold electronic contracts in the Globex trading system. But gold snaps-back typically after the London a.m. fix. They also try to hammer it about 25 minutes before the Comex floor trading opens, to no avail:
The next graph shows the daily gold price since September 29, 2015. As you can see, gold appears to be consolidating after a pullback from the 20% move that occurred from early January to early March.
I find it amusing when the gold investment community starts whining about a price pullback after a big move in a short period of time. When is the last time the S&P 500 moved up 20% in 2 months? It looks like the momentum indicators are curling back up as well. The action in the HUI and the metals reminds of late 2005 and late early November 2008. I leave it to the reader to review that particular history to see if they draw a similar conclusion.
Note: I just got off the phone with the CEO of a junior gold mining company that is one of the best ideas from a risk/return standpoint that I’ve seen in 15 years of researching, investing in and trading this sector. There’s been a handful of time when I’ve smelled “grand slam” ideas – Aquiline Resources, Silvercrest Mines, Wheaton Minerals (which became SLW and Gold Wheaton), Osisko, to name some of the most memorable. I smell a grand slam in the making with this company. I’ll be featuring it this week in the latest issue of the Mining Stock Journal.