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Gold remains in its bullish trend and is recovering from its most recent correction. Important support comes in at 1560. Any action above that should be viewed as encouraging. – Richard Russell

I could write a long article on how I feel about the economy but a simple picture says it all:

Why did gold drop like a rock, losing nearly $50 on Monday? Here are several possible reasons:

(1) The reason for gold’s fall? Europe is in the midst of a financial crisis. It needs money. The continent is struggling to raise funds in credit markets. But it has lots of gold. And it’s selling. (Main Street view)

(2) “We have a big option expiry coming up on Tuesday, and this is just business as usual,” says Sprott Asset Management’s John Embry of gold’s price action.

Mr. Embry subscribes to the theory that powerful forces manipulate the price of gold – which in this case is working to your advantage. “I think it’s spectacularly bullish that sentiment is so incredibly weak in the metals. I can’t believe that people are basically being influenced to this degree by price action and they are just ignoring the fundamentals.

“That is exactly what the people who are creating the price action want… Gold and silver prices are going to multiples of the current prices in the not-too-distant future. And if you don’t own this stuff, you’re going to get killed.” (Five Min. Forecast)

(3) Last week GATA’s Adrian Douglas correctly predicted that The Gold Cartel would bomb gold and silver going into tomorrow’s Comex option expiry. The bums have done it yet again … and, usual, The CFTC remains silent.

To accomplish their objective the cabal forces began their attack also as usual, PLAN A at 3AM NY time. It was ugly from thereon in…

Why did gold go down? Well, we know why on Planet GATA. (LeMetropole Café)

(4) Just another option expiry in gold, Embry tells King World News

Sprott Asset Management’s John Embry tells King World News that the smashing of gold and silver prices today was a predictable consequence of the advent of futures option expiry on Tuesday. He advises being ready for “extreme money creation at all levels and virtually throughout the world.” An excerpt from the interview is posted at the King World News blog here:


(CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

(5) Here’s the 1-year gold chart. You can see that the Commercial traders took out gold’s 50-day moving average with real authority yesterday…and that should pretty much wipe out virtually all of the leveraged long holders in the tech fund [Non-Commercial] category…and the speculative long traders in the Nonreportable category as well. I’m sure Friday’s COT report will show that.

(Ed Steer)