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I am down with a horrible summer cold.  This is the first time I’ve had a cold in years.  They suck!  My eyes won’t stop watering and my nose is dripping like a leaky facet.  I have already used up a full box of Kleenex – in just 24 hours.  I feel miserable and had to force myself to throw together today’s short newsletter.  But still, there are a few worthwhile articles for you to read.  Short, but sweet…

Below is an interesting chart from Eric Pomboy – the article titled Here’s Why There Is A War In Gold Near The Key $1,300 Level  can be found on the King World News website.

Here’s Why There Is A War In Gold Near The Key $1,300 Level

 August 5, 2013

“COT data for week ending 7/30 show Commercials reduced their Net Short Position by 8,922 contracts to -25,774.  We still hold by our idea that gold maintains at/above $1300 for the next few weeks, then begins a sustained rally to new highs.  All signs are that we’re at a major turning point for the metal right here.

This chart shows that the commercials have moved from very short to very long.  In fact, they are minus 25,774 contracts. History seems to repeat itself – note the bottoms, represented by the green dots and the tops in red.  Currently, we are near an all-time reading that indicates the bottom in gold is at hand or very, very close.

August and September are traditionally weak months for gold and silver.  I add silver to the conversation because it traditionally tends to follow its big brother, gold.  I still maintain that gold will finally break out to the upside by the end of September – or no later than this winter, after Bernanke retires.

There is an interesting article in Ed Steer’s section under the Critical Reads that you should probably read.  Bart Chilton, head of the CFTC, wants the large banks out of the commodities business.  Those of you who worry that the “manipulation” will never end can take solace from this short article.  Yes, manipulation IS a fact, but heck, gold and silver rose more than five-fold since 2001 in spite of the manipulation.  Should Chilton get his way? The metals will have free sailing up, up and away.