BRICS countries are large economies with large reserves of gold and an impressive volume of production and consumption of this precious metal. In China, the gold trade is conducted in Shanghai, in Russia it is in Moscow. Our idea is to create a link between the two cities in order to increase trade between the two markets,” First Deputy Governor of the Russian Central Bank Sergey Shvetsov told TASS – RT.com, April 19
The article in RT.com from which the above quote is sourced surprisingly did not receive a lot of attention from the alternative media. Perhaps it was overshadowed by the highly anticipated move by China to commence fixing the price of gold on the Shanghai Gold Exchange in yuan. I suggested that we would not see an immediate impact on the price of gold, which we have not, but that the move was part of a larger plan by China to “de-dollarize” the world.
Also largely ignored by the alternative media was the fact that Russia added another 500,000 ounces of gold to its Central Bank reserves – data provided by Smaulgld.com. To put this into some context, currently the Comex, which is sporting over 50 million ounces of paper gold open interest, is reporting 643k ounces of gold designated as available for delivery (“registered”). In 2015, Russia added a record amount of gold tonnage to its Central Bank stash.
I would argue, as would many, that China and Russia are strategically and methodically weaning the world off paper gold and fiat currencies and are looking to officially remove the dollar from its reserve status and to re-introduce gold into the global monetary system – without triggering WW3. Of course, this would explain the Obama Government’s recent military belligerence toward both countries…
Dennis Gartman, among many others, has expressed anxiety over the net short position in gold futures by the
“commercial trader segment” bullion banks per the Commitment of Traders report. The fear is that the banks are getting ready to attack the price of gold with another hedge fund “long liquidation” operation. This, of course, is a trading pattern in the precious metals that we have become accustomed to enduring since the bull market began in 2000/2001. Obvious manipulation that for some reason seems to be undetectable by the Government regulators (CFTC) who are paid by the Taxpayers to enforce laws.
I looked at some statistics from the COT data that goes back to 2005 (compiled assiduously by one of the partners in the investment fund I co-manage). While the net short position in gold futures held by the bullion banks, 240,121 per the latest COT report, is quite a bit higher than the average net short over the period (-161,781), it’s not even close to the highest net short of -308,231 in December 2009 or -302,740 in September 2010. In 2009, gold sold off for a bit after that -308k reading but in 2010 gold continued higher toward $1900 after the -302k reading.
The point here is that the relative net short position held by the criminal bullion banks is not necessarily the best predictive metric with which to forecast the next move in the price of gold. Furthermore, it’s quite possible that the physical gold market activities being conducted by China and Russia will act as a counter-force to the manipulation efforts exerted by the western Central/bullion banks.
I have argued for years that traditional chart and t/a analysis applied to the precious metals is thoroughly useless because of the high degree of intervention by the Central and bullion banks.
With that reservation about using charts, I wanted to present a couple charts of gold and one of the dollar because, in my view, gold is potentially set up for a monster move higher and the dollar appears to be potentially headed off the proverbial cliff (click on images to enlarge):
The graph on the above-right is a 10-yr weekly of gold. You can see that over this time period, the price of gold is still exceedingly “oversold” per the TRIX indicator. The graph on the above-left is a 1-yr daily which shows that gold has been “oscillating” laterally in a consolidation formation. It’s brushing up against its 50 dma (yellow line). Of course, at this point, the price of gold could “break” either way, higher or lower. Perhaps even a quick trip down to its 200 dma (red line). Having said that, the longer term graph of gold, combined with the massive demand for physical gold from Russia and China, suggests that every manipulated price hit should be aggressively bought. You can see the dollar (lower left graph) is positioned treacherously, as it has traded well below its 50 dma and could be headed lower. Certainly the ongoing economic and political deterioration of the United States is not giving anyone a reason to buy dollars.
There’s been a lot of “chatter” about whether or not the mining shares, which have had a tremendous run since mid-January, are “overbought.” The general consensus is that the mining shares are due for a pullback and I know a lot of my subscribers are hesitant to buy right now. My view is that, in the context of the brutal beating inflicted on the miners since March 2011 by overt manipulative forces – from both official entities and predatory hedge funds – it’s impossible to determine a true measure of “overbought” because the mining shares have been oversold for nearly five years.
I’m in an email group with a very impressive roster of precious metals investment and analytic professionals. One of them who is rather well-known made this comment today, which I thought summed up the situation perfectly: Now everybody is desperately waiting on the sideline to build up a first positon in gold, silver and miners, but nobody wants to buy into the rally, but rather buy into a correction… that’s why I am convinced, that every bigger dip will be bought and gold might head to 1,400-1,500 by year end!
The next bi-monthly issue of my Mining Stock Journal will be released Thursday. I have a sub-50 cent junior exploration stock to present with a market cap that is likely 1/10 the intrinsic value of the Company given the amount of proved gold and silver it has already discovered. This company is self-funding for now as well. You can access the next issue plus I’m offering the four previous back-issues (for now) by clicking here: Mining Stock Journal.
So 29 million ounces in non commercial longs, all deliverable right this minute, no i mean this second, i mean all purchased with borrowed money, i mean to be dumped on the market any moment, i mean this isn’t stealing , i mean selling stuff that doesn’t exist with money that doesn’t exist….i hate these assholes
Silver in particular has been holding up extraordinarily well in the past couple days in the run up to today’s options expiration, DESPITE repeated waterfall attacks by the cartel, they still can’t push it below 17! I imagine lots of soiled underpants among them now.
Among my collection of numismatic (not merely bullion) coins is a 1921 90 percent silver Ruble of the USSR. Yes minted under bloody Lenin. It took the USSR less than three years from trashing the old Russian Ruble into worthless fiat currency, to revert to silver and gold (at least for foreign exchange purposes) in 1921, even before Lenin croaked:
Great post JB, and thanks for the picture of that great coin.
“Silver in particular has been holding up extraordinarily well in the past couple days…”
Yes and it bears watching as it’s price is a leading indicator AND a lever on the whole ponzi scheme system…and they know it. Let’s see what happens in/around the Fed’s FOMC meeting…and their highly anticipated pearls of wisdom.
Having a small fraction of the knowledge of most posting here, let alone the author, I offer this opinion. Not that others haven’t had this same thought but…
Right now oil price, dollar index, stock markets, a war, gold and silver priced in dollars on COMEX, etc….all could be triggers, tipping points, black [or visible] swan.
Of all of these my opinion is watch the silver price [COMEX or spread above spot] as the canary in the coal mine for when the SHTF. Of course a war or centrally panned event could supersede or obfuscate…but if so PM is likely to go up.
Agree with everything except your assertion that you have a small fraction of the knowledge…
(11:51 PM in Western Australia, 11:51 AM EST)…
..ANNND…there ya go! DESPITE all of the cartel’s attempts to smash (paper derivative) “silver” in the past few days leading up to silver options expiration today, even the cartel’s nominal value of “silver” has broken out above 17.10!…
…which is a total f-cking failure for the US Federal Reserve and their agents. Just a few days ago they were SO F-CKING CERTAIN that they would be able to push paper “silver’s” spot price down below 17, and they tried and tried, AND FAILED!…
…and so now I imagine them like this: https://www.youtube.com/watch?v=0heW5B4MP54
How around 1,200 ounces (or two and a half Monster Boxes of one ounce Silver coins) was regarded around circa 900 AD:
“…It is one of several Viking hoards unearthed in England, but is the largest to date…The bullion in the hoard weighed over 36kg (80lb)… Even by modern standards, it represents astounding wealth, which has led to theories that it was perhaps a huge war chest collected by the recently expelled Vikings from Dublin intent on making a forceful return.” (in circa year 900 AD)…
…and so, in around year 900 AD, just 1,200 ounces of silver was enough to change the destinies of nations.