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Today’s daily is longer than usual, in part because the Mail Box section is pregnant with reader’s questions and comments.  The Mail Box section is always at the end of the daily and you may not get that far, but really, it contains some of the best insight in the daily and my wife Susan, for one, never misses it.  Check it out and see if it makes YOUR most important list too.  Long, or not, you have the whole weekend to digest this daily.  And if at all possible, do not miss Ranting Andy’s afternoon blog.  I think it sets the standard for our industry and you get it right here, courtesy of Miles Franklin for FREE.

Now, onto today’s daily.

It’s up, it’s down, but really, for the last three weeks the price of gold has gone no-where, bouncing around between $1,700 and $1,750.  Nothing to get excited about and nothing to worry about either.  Just be patient – much, much higher prices are not far off.  Jim Sinclair puts it thus:
Gold is headed in the $2000s. The low in the accordion chop has been established in the drop toward $1530. It does not matter if gold launches from $1710 or $1650, what matter is that it will.
The ongoing debate on whether there is market manipulation or not market is still alive and kicking.  On the one side is The Andy Hoffman View (backed by John Embry, Bill Murphy, Bob Chapman, and Jim Turk) that takes the position that the markets are manipulated by the evil Fed, Comex, CME and the Gold Cartel led by JPMorgan, HSBC, Deutsche Bank and several other large bullion banks.  On the other side of this issue is my friend, and very talented trader, David R.  David laughs at those who rely on “manipulation” to explain the markets.  His experience – two decades of working for some of the world’s largest bullion banks in Johannesburg and London and his personal relationships with the traders who work at JPMorgan and other NY firms – form the basis of his opinions – that the movement in the markets CAN be explained by liquidity and trading patterns.  He agrees that gold and silver are going much, much higher due simply to fundamentals such as shortages and political problems.  He argues that we do investors a dis-service by playing the manipulation card.  He argues that it turns many people off and it is unnecessary.  If I didn’t personally know David R. and of his background, I would be tempted to disregard his views, but David R. is no fluke.  He is the real deal.

My friend Bill Fleckenstein, a very bright guy and a very, very successful trader who made a fortune shorting the market from the mid-90s until rather recently, is squarely in David R’s camp.  A few years ago he told me, “David, I personally know the traders at JPMorgan and believe me, to them gold and silver are just ‘things,’ and have no special meaning to them. They are no different than orange juice or corn.”  (If so, why is only gold never allowed to move more than 2% in a day – see Ranting Andy’s and James McShirley’s comments that follow).  These guys are smart, well informed and have made a lot of money in gold and silver while chuckling at us “conspiratorialists.”

I try and keep an open mind about this subject and Andy Hoffman presents a very well documented, hard to dismiss presentation that is absolutely conspiratorial to its core.  David R. and Ranting Andy are the yin and yang of the gold conspiratorial issue.  Which of them is correct?  Personally, “I don’t give a damn!”  Why?  Because both of them are super bullish on gold and silver and that is really all I need to know.  The fact that it is due to different reasons is not terribly important to me.  It makes for good copy.  It’s the kind of game I love to play – I win either way!  The following explanations of what caused the fall in gold yesterday, covers the gamut of both viewpoints.  Read them all – they are interesting and somewhere therein, you will find the truth.  You should decide for yourself.


MNI Reports Coordinated Central Bank Intervention Sends Gold Lower Intraday (Zero Hedge)

Trader David R comments on the above Zero Hedge article:
What a joke !! Central Banks are buying gold not selling……..
Market got too long ahead of itself, thinking that the ECB was going to cut 50 basis points and start buying their bonds….. market got too long and exit was small – just that easy !
Someone was remarking to me that they are shocked that Tyler is still alive and that he must have bodyguards because he talks so much shit !

Embry comments to King World News about today’s intervention against gold  (GATA)


Jim Sinclair comments:

Jawboning: Don`t Fail To Recognize It (jsmineset)


 Trader David R comments:
Yes finally someone with a good head on his shoulders and I agree.  Need more people like Jim out there !
Today it failed to close and break through trend support…
Here is the type of technical analysis that David R uses:  “Series of compressed ranges as it forms a wedge; tomorrow they’re only a narrow < $30 between the converging trends…”

O.K., ask me how I really, really feel.  Truth be told, I didn’t bring Ranting Andy Hoffman aboard at Miles Franklin because I disagree with him.  Andy and I are on the same page.  I present “both sides” in the issue because I want you, my readers, to make your own decisions and not be led, in one direction without a semblance of objectivity from these pages.