What’s Going On With Gold?

Several of us who stick our neck out in public with analytic opinions on the market have been thinking  that gold has reached a tradable bottom.  I’m sure many would say that view is flawed based on today’s action.  Let me preface my thoughts by saying that, over the last 17 years of daily active involvement in the precious metals sector, I don’t pull my hair out over intra-day or even intra-year volatility.  Measured from the beginning of 2002, gold is up 441% while the S&P 500 is up 158%.

The point here is that, given how easy it is to print up paper gold contracts and flood the market, the price of gold can do anything on any given day. If you want to own gold for the reasons to own gold, you have be play the long game. The mining stocks do not seem to care about the day-to-day vagaries of the gold price right now. You shouldn’t either.

The trading pattern in gold is somewhat similar to its trading pattern in the summer of 2008, right before the great financial crisis (de facto banking system collapse) was set in motion.   The price of gold was taken down from $1020 in mid-March to $700 by October, while the financial system was melting down. That set up gold’s record run to $1900 over the next three years.

It’s becoming obvious to anyone who chooses to not put their head in the sand or become intoxicated with the copious amounts of official propaganda, that the U.S. Government is technically bankrupt and the financial bubbles fomented by a decade of money printing, credit creation and near-zero interest rates are about to explode.  It’s not coincidental that gold was slammed ahead of Congressional testimony by Fed-head Jerome Powell, one of the primary propaganda-spinning hand-puppets.

Gold started rolling downhill after the London a.m. fix. Right after it. The cliff-dive occurred as the Comex floor was opening. This is a pure paper operation. It’s either the hedge funds or the banks piling into the short-side of the market by flooding the market with paper gold and hitting all bids in sight. The managed money category of trader segment in the COT report has been getting net short and more net short the last two weeks. Hedge funds could be shorting even more paper gold, trying to push it further downhill to book profits on their shorts. OR it could be the banks piling into the short side but hide this by booking the trades they report to the CME (daily o/i) and the CFTC (weekly COT) into the managed money trader account in the COT report.

The latter is entirely possible. JP Morgan was already caught once doing this in silver. If you don’t trust the Government to report the truth, why would you trust the banks to report the truth? After all, the banks ARE the Government.

Today’s action has nothing to do with the $/yuan to gold relationship or the $/yen to gold relationship. The dollar is higher and gold usually trades inversely to the dollar. Gold likely is being managed like this to help disguise the coming financial and economic bombs that are set to explode – just like in 2008.

We’re dealing with a system in which banks and other big corporations control the Government and there is no RULE OF LAW whatsoever. Think about what you would do if you completely lacked a moral compass and were in control of the system, to a large degree. You would do exactly what they are doing. And I’m not talking about just gold. It’s everything. They have used debt to put the squeeze on the population.

3 thoughts on “What’s Going On With Gold?

  1. No surprise , Masters of Universe are in full control.
    In my opinion bottom will be close to $1200.
    We going to see a lot fireworks in next 6 months.
    Masters can’t push up everything forever , Dow will end up like Bitcoin.
    All Bubbles burst. They enjoyed free ride for too long , and I don’t see any other way but only War to change this status quo , otherwise they not going to change.

  2. I’ve thought for years, now, that the big banks have been self dealing (being on both sides of a so-called trade) in the futures market for gold, silver, and many other commodities. With nil regulation, they seem to do what they want as long as they pay their protection money.

    But I continue to wonder where they think this is all going. Surely, they can see the end game here, with no real economic growth and exponential growth in debt. As Mises said, you either end the credit expansion voluntarily, or it will end by itself, disastrously. I guess we can see which option the criminal class have chosen.

    1. RT Rider said – “I’ve thought for years, now, that the big banks have been self dealing (being on both sides of a so-called trade) in the futures market for gold, silver, and many other commodities.”

      I fully agree with this statement. Many gold analysts and commentators keep calling this the “dumb money” and “they always get fleeced”. Horseshit!! They own both sides of the trade. It’s call a “wash trade”.

      It’s illegal, yet the CFTC and SEC will never do anything about it.

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