Tuesday, June 29, 2010

Gold Cartel Out Of Sinks, Desperate

No surprise... The Gold Cartel once again proved they are in bed with the CFTC. At precisely 10AM est, with the London PM Gold Fix at a new all-time closing high, the Gold Cartel turned to their buddies at the CRIMEX and demanded the price of Precious Metals be "taken down". Didn't they try this last Monday at 10AM est?

What a load of crap!

Dan Norcini at JS MineSet [http://jsmineset.com/] said it best and I believe spoke for everyone that watches these Precious Metals markets:

Hourly Action In Gold From Trader Dan
Monday must now be the new “Friday” when it comes to gold. Those of you who have been watching the gold price action over the last decade know what I am referring to. For those of you who are a bit newer to the gold game, Fridays, particularly after a payrolls report, have typically been the day on which gold was taken down by the bullion bank crowd to mess with the weekly chart and the technical picture.

Last Monday saw gold put in a horrendous bearish downside reversal day which the bulls managed to negate the rest of the week by a sheer gritty determination not to run. Today (another Monday) we have an exact repeat of the same bullion bank tactic that they employed 7 days ago; to wit, a takedown after price took out last Friday’s session high while gold mining stocks were also moving sharply higher. The result – an exact repeat of last Monday technically – another bearish outside reversal day on the daily chart. This coming on the heels of a brand new record high in Dollar terms at the London PM Fix ($1,261).

It is quite evident that the perma-bears at the Comex are determined to cap gold at $1,260. No one hits bids with the intensity that I saw this morning unless they are trying to take price lower. The reason is obvious – a closing push through $1262 and gold goes immediately to $1,280 – $1,285 garnering all the more headlines and casting more doubt upon the integrity of world’s current monetary system, which is under extreme duress. What the bullion banks are attempting to do is to form a double top on the daily price chart – it really is that simple.

Some are pointing to the stronger dollar as the culprit behind the weakness in gold, but that is denying the obvious and grasping for an explanation. Bonds are shooting sharply higher today and even the Yen is stronger as once again risk is back in focus and investors are moving to safe havens. Under such a scenario, the very notion that gold would be sold off as a “risky” asset is laughable for its stupidity.

The fact is gold was sharply higher after the conclusion of the meaningless G20 summit which was nothing but a group of yakking heads talking to hear themselves saying something. Investors rightfully interpreted that as further confirmation that nothing serious was going to be done that would restore confidence towards paper currencies. They then bid the yellow metal higher which held its gains from overnight as it moved into New York trading and even added some. We are then to believe that investors had a sudden change of heart so much so that they immediately became convinced at mid-morning that gold was no longer worthy to be held but instead US paper Treasuries were much more to be desired? Based on what news, what report? Come on already – are there actually people out there who are so damn dense that they believe this nonsense? This is what an orchestrated takedown looks like, pure and simple.

My own view is that this will meet with as much success as the previous Monday’s. Not a thing has changed in regards to the world’s monetary system – nothing. We always have to respect the technical price action because today’s markets are dominated by techies but those same technicals worked in favor of the bulls last week based on the price action Tuesday through Friday last week. They have to repeat their performance once again.

Let’s see how support levels function tomorrow and Wednesday. Chalk up today for the history books and forget about it. What is more important now is whether the bulls will hang tough and refuse to run. If they do not run, bears will be forced to cover as they did last week. As I mentioned in this past weekend’s analysis of the COT report, bears will have to force price down below $1233 on a closing basis to induce long side liquidation.


Jim Sinclair followed up Trader Dan's comments with some concise commentary of his own regarding Monday's Gold Cartel shakedown:

Debt Crisis Cannot Be Manipulated Away
If the market for gold had not done its runaway/runaway common to overleveraged long morons, it would have broken out of the neat cup and handle formation going on to $1650. It will definitely break out of that formation.

The short term bullies that manipulated today’s market cannot manipulate the reality of the debt crisis away.

Today was the do or die takedown in gold by the mega hedge fund traders using the gold banks as beards for maximum effect. It was that because of the cup and handle formation. I know because I used to do the same thing on the other side.

Back in the 70s when the Middle East was the major buyers of gold they used a certain German bank as their broker constantly. When I wanted to run a large short position into oblivion, I used the same bank as buyers that represented the Middle East.

Nobody wants to buy or sell, only manipulate price, when they bid ten times what the offering is or offers ten times what the bid is in an open outcry market.

You have witnessed a pure operation by the bear hedge fund, just the same ones that are short of the junior and intermediate gold shares.

What has been painted in the gold market is also being attempted in the gold sharers. In time the futility of this will be very evident.


Dave Kranzler of The Golden Truth offered succinct commentary on the CRIMEX raid and charts worth 1000 words identifying yesterday's raid and last Monday's raid as well. Is the CFTC freaking blind?

A Comex Paper Manipulation Price Raid: In A Picture and Reader Comments
How come moves like this NEVER happen outside of the COMEX traing hours?

The physical demand for gold/silver - and the demand for delivery - is starting to take its toll on the attempt by the Fed/Treasury to hold down the price.

Sell your Gold? Why would ANYBODY sell their Gold? No Gold was sold yesterday...the Gold Cartel has none to sell. Gold that doesn't exist was sold to "affect" price lower, but no Gold was actually sold yesterday.

RBS tells clients to prepare for 'monster' money-printing by the Federal Reserve
By Ambrose Evans-Pritchard
Entitled "Deflation: Making Sure It Doesn’t Happen Here", it is a warfare manual for defeating economic slumps by use of extreme monetary stimulus once interest rates have dropped to zero, and implicitly once governments have spent themselves to near bankruptcy.

The speech is best known for its irreverent one-liner: "The US government has a technology, called a printing press, that allows it to produce as many US dollars as it wishes at essentially no cost."

Bernanke began putting the script into action after the credit system seized up in 2008, purchasing $1.75 trillion of Treasuries, mortgage securities, and agency bonds to shore up the US credit system. He stopped far short of the $5 trillion balance sheet quietly pencilled in by the Fed Board as the upper limit for quantitative easing (QE).

Andrew Roberts, credit chief at RBS, is advising clients to read the
Bernanke text very closely because the Fed is soon going to have to the pull the lever on "monster" quantitative easing (QE)".

"We cannot stress enough how strongly we believe that a cliff-edge may be around the corner, for the global banking system (particularly in Europe) and for the global economy. Think the unthinkable," he said in a note to investors.

Roberts said the Fed will shift tack, resorting to the 1940s strategy of capping bond yields around 2pc by force majeure said this is the option "which I personally prefer".

A recent paper by the San Francisco Fed argues that interest rates should now be minus 5pc under the bank's "rule of thumb" measure of capacity use and unemployment. The rate is currently minus 2pc when QE is factored in. You could conclude, very crudely, that the Fed must therefore buy another $2 trillion of bonds, and even more if Europe's EMU debacle goes from bad to worse. I suspect that this hints at the Bernanke view, but it is anathema to hardliners at the Kansas, Richmond, Philadephia, and Dallas Feds.

Societe Generale's uber-bear Albert Edwards said the Fed and other central banks will be forced to print more money whatever they now say, given the "stinking fiscal mess" across the developed world. "The response to the coming deflationary maelstrom will be additional money printing that will make the recent QE seem insignificant," he said.


The Fed giveth and the ECB taketh away. Perhaps this is the real "threat" to the equity markets, and explains the attack on Gold. heave forbid the canary from singing the TRUTH.

Expiration of ECB Debt Facility May Disrupt Credit Markets
By Abigail Doolittle
Flying under the radar screen is Thursday’s expiration of the European Central Bank’s largest 12-month Long Term Refinancing Operation (LTRO). Considering, however, that it could prove to be the impetus for an increase in 3-month LIBOR and a general disruption to the credit markets, it should be flashing red for us all.

At 10AM est this morning the 10-year Treasury note has slipped below 3%. This is not a sign of economic recovery. The is a sign of impending economic Armageddon.

Gold too another hit this morning, but bounced on cue as the London PM Gold Fix was put in. It remains to be seen if the Precious Metals can follow through on this bounce as the Dollar is receiving it's usual "safe-haven" bid. The recent return to it's inverse relationship to the Dollar is appearing to hurt Gold, but in reality Gold is being manipulated lower, not reacting to a "stronger" Dollar. The US Dollar is anything but strong.

Gold has support at 1227. This is key support, and must hold to prevent the technical downdraft the Gold Cartel are trying to force in "price". Secondary support lies at the uptrend line of Gold current leg up from it's March low at 1084. This support presently rests at 1221. Below that the next key support level is at 1216. The Gold bulls were powerful last week, let's see if the really mean business in dealing with these CRIMEX crooks.

Silver as always is along for the bumpy ride. Every effort was made early yesterday to prevent a Silver breakout at 19.50. Key support in Silver lies at 18.31.

As suggested many time previously. The Gold Cartel has been completely unsuccessful in stopping the rise in the price of Gold. They have been entirely successful at offering investors opportunities to buy Precious Metal at discount prices however. Be right and sit tight.

No comments:

Post a Comment