Early this morning, Ranting Andy emailed me that he was beyond riled by Tuesday’s waterfall assault on gold. I told him to relax, it’s been this way for a long time and will continue to be this way for a long time. I told him that since silver, platinum, palladium and the mining shares were holding up, I wasn’t concerned – especially since there was no news announcement to base the mugging on. It’s part of the game the boyz play.
Well, it didn’t take very long before gold came roaring back. Back to the key number: $1,650. That is the pivot point that gold is moving around now. Sinclair says the central banks are “comfortable” with that number. It could hold for a while but the longer they hold it down, the more powerful will be the ensuing rally. Manipulation AGAINST the primary trend, which is a bull market in gold, is destined to fail. It only works when utilized WITH the trend.
The bullion banks (and Fed) are getting what they want. All excitement has been squeezed out of the gold and silver market. Since bonds are paying a pitiful return, it forces investors into the stock market, which is where the Fed wants them to be, prior to the election. As for the bond market, well the Fed will simply continue to purchase Treasuries in sufficient quantities to hold interest rates down to their target of zero. They have told us repeatedly, they will continue with the zero interest rate policy at least to 2014. As Sinclair says, every day now, QE to infinity, it’s as certain as death and taxes.
In his most recent blog, Larry Edelson predicts the dollar will rise to 83/84 on the USDX. It is currently at 79.58. Jim Sinclair says the dollar is headed to 72 and if it doesn’t hold at that level, the bottom will fall out. Only one of these guys will be right. I find it very hard to ignore Sinclair as his track record is superb! Along with 72 on the dollar, gold will top $2100. We shall see.