I watched gold and silver get pummeled Sunday evening. It was pretty revolting. The boyz love to overwhelm the market in the wee hours of the morning in the thinly traded after markets. They hit the metals with everything they had – and then suddenly, gold and silver turned sharply up, a rare reversal, and they held their gains. At one point gold topped $1,400 and silver flirted with $23.00. The first good performance in a couple of weeks; we needed it. Did we see the bottom? Don’t know, but there is still life in the metals. You can’t sweep the demand under the rug from Russia, China and India. There is a “pull” from the physical market, and it is supercharged because the prices are so (artificially) low.
Technically speaking, I am not a registered financial advisor and legally, I can only offer opinions, not investment advice.
I have run into trouble lately because I rely on logic, honest data and have realistic expectations – but this information is not performing as expected in the gold and silver market because they are totally contrived and manipulated. Yes, they are manipulated, without one iota of doubt. The regulators ignore the facts, and the media is mega-bearish on gold and silver. In this environment, winning the game and being right take a (short-term) back seat to the whims of JPMorgan and the Fed. For now, until the PHYSICAL off take turns things around, or JPMorgan decides to let the prices fly, the fundamentals will be ignored. The stock market will continue to rise; QE will keep us at near-zero interest rates; a strong dollar (which is a joke with near-zero interest rates and a trillion a year in QE money creation) will hold; and there will be continued pressure on gold and silver, which will not be allowed to rapidly return to pre-April levels.
The truth is the lower the price goes, the stronger the buying gets – from the Chinese, Indians and Russians. At the same time, the large Commercials, especially JPMorgan, are getting longer and longer and they can’t bank these potential profits until the metals change course and start to rise. Believe me; it is very bullish that the Commercials are long gold and silver. They are rarely ever on the wrong side of the trade. But, it may not happen today or tomorrow. It shouldn’t be much longer before things turn around. The bull market is not over! The large gains lie in front of us, but only those who hold onto their positions (my readers, I hope) and those who are now buying bars, coins and even a few well-thought out mining shares (I will hear from Ranting Andy Hoffman on this comment).
If you are a big-picture, rational person and are looking a bit down the road, this ambush is not a big deal. (Well actually, it is because it is causing a rift between the phony paper market on the Comex and the real physical market where product is actually delivered.) If you need to sell your metals now for cash flow, it sucks! Don’t blame us. Blame JPM, the Fed and the “we never find a violation in gold or silver” CFTC.” They are the ones stealing from your portfolio. We just report the facts and the facts say own gold and silver and dump the dollar.
If you bought gold and silver as an investment, our comments have been wrong – not the product or where they are ultimately headed, but in the timing. Who could have anticipated the massive manipulation that hit the market a month ago?
I never saw it coming. This fabricated drop in gold and silver has caused a disconnect between paper and physicals. You will read about it today in Jim Willie’s section. He has some very interesting things to say, as usual. The Hat Trick Letter is one of the finest out there and is a must-read – in my humble opinion. I suggest that you subscribe to it. There is more great information to be found in his letter than just about in any other! It’s not free, but it is well worth the cost. Most worthwhile things in life aren’t free – but the Miles Franklin newsletters are an exception. They are worthwhile and they are free.