Tuesday, July 10, 2007

The Cartel Is Terrified

The question of "manipulation" in the Gold market has been asked repeatedly. If ever there was a single day that represented this "capping" of the Gold Price, today may be it. The ever eloquent Dan Norcini over at Jim Sinclair's MineSet http://www.jsmineset.com/home.asp today put into words what many of us have been observing and bitching about for months:

Folks - I have to say that today was one of the most blatant capping efforts I have seen in gold in some time and that is saying something. With the dollar breaking through major support and with crude oil moving up along with the CRB index, to see gold struggle to keep its head above water was almost comical if it weren't so obvious as to what is going on.

You have to wonder what it is about the number "666" that the enemies of gold are so obsessed with holding the gold price below it. I mean, we could not make this stuff up if we wanted to for Pete's sake!

The official sector is so terrified of letting the gold price get away from them that they are making fools of themselves since even the most obtuse are beginning to realize that something stinks to high heaven in the gold market. My own personal view of this is that anyone, and I do not care how well-respected or how well known they are, who denies that there is official sector intervention to keep the price of gold down is willfully blind and has forfeited any right to be listened to when it comes to commenting on gold. I have been a trader for nearly 20 years now and have seen all manners of markets trade and all manners of price action and will state categorically that no other market on the planet trades like the gold market. The price action in gold cannot be explained any other way than by attributing it to official sector intervention.

Market commentary from the usual nitwits to explain gold's weak price action was encapsulated in the view that gold traders were waiting to see what Fed Chairman Bernanke would be saying in his speech at 1:00 PM EST. Oh sure, I get it, traders are concerned about the dollar's reaction to any talk of Fed action on the interest rate front. Meanwhile the dollar falls into a black hole! And to think some people actually get paid to produce this sort of swill...

The friends of gold can rest assured that those who are vainly expending energy and resources into suppressing it are spitting into a hurricane. They should really give it up since they are no longer fooling anyone. Once a ploy becomes widely known, it no longer serves any useful purpose. Screwing around with a yardstick does not mean that one can alter the fact that there are 36 inches in that yard. In the same manner, attempts to alter the barometer of gold have ZERO affect on the conditions that are calling for its inexorable rise higher...

And despite the vigilant efforts of the "gold cartel" to suppress the price of Gold it continues ever higher. As the monthly chart of Gold above clearly shows, since double bottoming in 2001 Gold has RISEN steadily. Since clearing the launch pad at 415 in the Summer of 2005, Gold's ascent has been prominent. Looking at Gold on a monthly chart makes one wonder what all the worrying has been about...powerful bull markets climb a wall of worry.

Gold is not going to stop at the Moon. Gold is going to the heavens. Stage One's ascent following liftoff in the Summer of 2005 has been rewarding for those fortunate enough to be on board when this bird took flight. The smart money, Gold Bugs, and contrarian speculators long ago packed their bags for this trip, and have been picking up supplies on the cheap along the way. The ship is less than half full of passengers at this time. Investors are now queuing up for Stage Two. As Gold breaks the downtrendline of the May 2006 high, Investors will begin fighting for a seat at $682. Since carry on baggage is not permitted for new passengers, these "investors" will be forced to pick up supplies along the way at ever rising prices. Stage One ticket holders stand to benefit immensely from these investors joining the passenger list.

All aboard! Next stop $1045 Gold.

The company's bugler is licking his lips as the US Dollar collapsed today on news of China's trade Surplus. December 2005's low of 80.35 is the cliff the Dollar is fast approaching. If it goes over the edge here, our bugler will be playing taps as the Dollar falls into an abyss below.

Gold and Silver by all rights should have been SUBSTANTIALLY higher today on this collapse in the Dollar. I'm confident it soon will be... 664 Gold was noted here as dem Rat Bastids "last straw". They certainly rose to the occasion today. Silver vaulted 12.75 today and singed the the Vermin and their paper Comex short positions. Silver was capped at the 12.95 50% Fib retracement of the June '07 high. The downtrendline off that same high was clearly broken at 12.75. I suspect we will see only higher lows from here in Silver for the balance of 2007. The 13.10-15 area is our next target. I suspect we may not see a "tradeable" high in Silver prior to the 13.70s.

Begin to focus on the Gold/Silver ratio again. A break below 49 could send both Silver and Gold lurching forward.

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