The sentiment is changing! Backwoods Jack called me this morning and he said, “I’m hearing from non-goldbug sources that gold and silver are moving up.” This is BIG news! Mainstream is moving from a bearish position to a bullish position. The hedge funds are sure to follow. The way up will be a whole lot more fun than the last two years were on the way down.
It shouldn’t come as a surprise. Nothing fundamentally changed! Nothing that would have caused the precipitous drop in gold and silver. The carnage in gold and silver was a “kill the messenger” motivated attack and was pure manipulation.
Now the pendulum is swinging back in the opposite direction. Mother Nature always wins, in the end, and logic and physical policy (irresponsible) determine what the “end” is all about. (Hint – Falling dollar, recession, inflation and a renewal of the bull market in precious metals).
Many of the writers in our industry have finally jumped off of the fence and they are, one by one, starting to report that the bottom is in and that the bull market is still alive and well.
This is the third time, since 2001, that I am taking the position, with no hemming or hawing, that gold and silver are taking off. It’s buy time once again. The first time was in early 2001. We contacted all of our Swiss annuity clients and urged them to sell their Swiss franc backed annuities and move the proceeds into physical gold and silver. We made a lot of money for our clients! The timing was perfect. The second time was in early 2009. After the market crash, in 2008 that took gold from over $1000 to around $750 we started to urge our clients it was time to get back in. From there, gold rose to over $1900.
This is the third time. The current move up is the beginning of the third time that I am stating the bull market is here. It never left. Could I be wrong? I would like to say no, but I am still wiping the egg off my face for not believing that gold and silver could be bullied so low. I guess I’m better at identifying the up moves than the “corrections.” But like Richard Russell and Jim Sinclair, I do not sell my physicals. They are not for trading, even when the market turns south.
Never let it be said that the hedge funds and bullion banks play fair – they have a tremendous amount of PAPER muscle to bully markets to highs and lows that are un-natural. But all of their effort led to another one of those delightful “unintended consequences” The Cartel pushed the paper price of gold and silver so low that the big buyers in the East jacked up their buying (only physicals, not ETFs, mining shares or contracts) to a point that there was a disconnect between the paper price (COMEX quoted spot gold and silver) and the real prices (what it cost to take delivery of large amounts of physical gold and silver). Buyers who want physicals do not settle for paper substitutes (well, some do; they take a big premium from JPMorgan to settle in dollars instead of taking delivery in metal but that is just HERE, not in Asia). For several months, we told you that there are delays and shortages. It took a while, but the price of gold and silver have taken off now and that is more proof there are shortages in real metal.
If you still can’t find a reason to return to this marketplace then someone else is doing a better job of “selling” you than I am. Just remember WHO it was that kept you from getting back in now, when you should. Let’s save a special place at the top of the list for Larry Edelson. He did get people out, and for that he deserves credit, but he is still on the sidelines, waiting around till the end of September (so he says), even with gold already up over $200 and silver is up almost $6.
Sitting on the sidelines and waiting for Larry’s all-clear signal, has cost you 20% in gold and 30% in silver. The move up is just getting warmed up.
Also, remember that the $250 fall in gold in April was a100% orchestrated event. Since then, JPMorgan has gone from short gold to long gold. (See Ted Butler’s comments)
I am calculating that JP Morgan holds 85,000 contracts based upon previous COT (Commitment of Traders) and Bank Participation Report data. In simple terms, JP Morgan holds more than 25% of the entire COMEX gold futures market on a true net basis. There has never been a more concentrated net long position in any regulated futures market in history.
– Ted Butler, Butler Research
The path back to $1600 gold and $34 silver should happen sooner than you think. The hedge funds that shorted the market on the way down will have to go long, quickly, to close out those positions before they start losing money. I think we will get there by the end of the year – and 2014 should be a great year for gold and silver and not very good for much of anything else.
Please take note of Jim Sinclair’s latest comments on gold below.
My Dear Extended Family,
The manipulation of the price of gold now favors the bullish side of the gold price structure.
1. After an excruciating wait we have entered the first of two bull price bull phases, this the first of which will that will take gold to $1650, the old high and beyond.
2. In this gold price bull phase the good gold shares will participate and in percentage terms the best will lead.
3. Certain gold producing juniors are going to become majors.
4. Assuming the major gold companies take huge write downs due to their lax in management, they will get meaner (if that could be) and perform in that business the way they should have from the day gold broke above $529.40, moving its price into a run away. Their recoveries will be spectacular.
5. The gold phase we are now in, which I call the first move towards full valuation, is long term and not to be counted in daily, weekly, or monthly increments.
6. This gold bull price phase is the one long predicted here that will return the most money to the fewest in the shortest period of time.
7. Silver has gained back it’s mojo, and therefore $50 is a given for it.
8. The reason that major Bankster’s physical precious metals storage facilities are for sale is one of the strongest reasons that the old high in the gold price will be beaten. They are not for sale because business is bad. The reason to have a depository was to manufacture a synthetic short in gold legally by taking funds for physical but trading the COMEX and OTC derivative gold market to fulfill the appearance of covering their obligations.
This game was not high risk as long as paper gold had full control of the gold price determination. They could have $1000 losses on the short and turn it into a profit via spread trading using the warehouse as plausible denial from manipulation. The banksters, now the major longs, do not select to play this game anymore. The manipulation now favors the bullish side of the gold price.
9. Now the banksters are on your side as you can easily see in the press session trading internationally.
10. JSMineset is named as it is because it represents a mindset that gold is for savings and fiat currency for transactions.
11. The three entities that called the $1900 in gold are back long. Bo Polny was first and is full out bullish. Nenner went long about $100 points higher, but you could see his lack of confidence in his position through his cautionary verbiage. Rambus1 toyed with being long but until recently was not firmly in a gold price bull market mind frame of trading. Therefore it is a simple fact that Bo Polny won this round among the gold market technicians as he fully committed his reputation and capital.
12.The gold price will make a new high on this phase and much higher highs on the one to follow.
–jsmineset.com, August 23, 2013
As long as I’m bringing in comments from the “old timers,” I may as well add Richard Russell’s golden comments to the mix too…
Here’s one for the “gold bugs.” What I see on this P&F chart is an upside break-out for gold with a target projection of 1590. But gold is overbought, and probably needs a rest before heading higher. I note the base from which gold rose appears to resemble a head-and-shoulders bottom, which makes this a very powerful base for gold. Any decline in gold from here will simply build a stronger and more powerful base.
Dow Theory Letters, August 22, 2013