Pardon me, but I smell solvents in the air – no doubt from “painting the tape” on Friday. Gold shot back up $28.60 to finish the day and the week at $1,599.20. The same can be said for silver, which wasn’t allowed to close above $30. You don’t really think it was a coincidence that gold finished BELOW the “even” number at $1,600 and silver below $30 do you? These games go on and on. Anything to keep excitement and interest in gold at bay is common practice.
I am waiting for three things to happen, which will signal that the pullback is over. Gold closing above $1,600, silver closing above $30 and gold closing back above its 200-day moving average at $1,610.
Eric Sprott on the manipulation of silver –
“When silver hits $49.50 between the various paper markets, there was something like one billion ounces of paper silver sold that day – and purchased of course. But, we only produce about 900 million ounces a year… what do you think of the guys who were selling a billion ounces of silver who didn’t have a hope in hell of providing it?”
“I’m very frustrated by what’s going on in the paper silver market. I just find it unbelievable that you can have silver go down $6 in 13 minutes one time when the markets weren’t really open and then you get four margin rate increases the next week – four… It smells like a set up to me.”
“I don’t care whether the central banks have or governments have, but the markets made it the reserve currency… central banks have been aiding and abetting that process – they’re almost making it the reserve currency by their actions, not by their statements and when it was a reserve currency silver traded at a ratio of 15 to 16:1 of the price of gold.”
Over the shorter term, he says there is clear evidence of strong demand for the metal, “demand for silver is versus the demand for gold in the investment arena and when I see people like Gold Money sell as many dollars of silver, as gold. When I see the US Mint sell as many dollars of silver as gold which by the way implies in both instances, 50 times more physical than gold. And when we did the IPO for Gold Trust we made $440 million. When we did the IPO for the Silver Trust we made $550 million…Well how can the price be 50:1 when the money is going in 1:1?”
Please take the time to listen to Jim Sinclair’s interview with Ellis Martin. He explains the causes behind the recent fall in gold and discusses where gold is headed in the near future.
Ellis Martin of www.EllisMartinReport.com has prepared another exclusive interview with me. Please check it out. Today we discuss the details of the recent severe gold contraction.
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