Just a few minutes ago, spot gold hit within 94 cents of the bottom of the old trading range that I was spot on about for so long; $1250.00 + or - $20.00 and Comex gold is an even 50 cents below it. NOW, let us look at what happened in gold on Monday: The low and high tick were reported by the CME Group as $1,187.30 and $1,209.30 in the February contract. That is $22.00 difference; a two dollar bill more than the pops predicted by my #BustedHeadsIndex in the price when gold was going up due to the Ukraine, the Crimea, ISIS trouble, etc. As you all may remember, the normal trading range that I predicted, and that gold traded in, until I signaled all bets off in an anticipation of mischief by the powers that can manipulate gold prices (we are still not out of those woods yet), was marked by twenty dollar moves. After the all bets off call I did a little grocery store math, and called $1189.00 as the point at which the price would reverse, and it came within $1.30 of that before the downward drop stopped and the price went up by half of a frogs hair Logan Mohtashami is my witness, I asked him for the chart that day that proved I called it the day before it happened. You all may also recall that I said over and over and over that all that matters is how much China (and India) wants to buy. Well, Although the unofficial China gold imports through Hong Kong figures for October were reported about ten days ago in stories from Reuters and Bloomberg, the official numbers werent released until yesterday. They show that 77.626 tonnes imported......its obvious China is buying gold from all sources now, even to the point of resurrecting imports through Hong Kong. ====================================== NOW, I have no source and no basis whatsoever for what I am about to type, this is pure conjecture on my part. I believe that Putin is going to mine gold and sell it to China and it will not be reported by anyone. China has been mining gold at a breakneck pace that kills miners on a regular basis, and is still a net importer of gold. They still think (remember what I said about the cultural basis for desire for gold?) that gold is the same as money, only better, just as Indians do; and the fact that billions of people feel that way can negate what traders and experts think IF they keep buying and they buy in enough volume. IF China wants to build a stockpile of gold equal to the 8,000 tons America has, they of course want to pay the least amount possible for it. SO, it is a good idea for them to buy as much as possible without driving up the price; their demand for gold costs them money if it affects the market. It also stands to reason that the corrupt rich people in China need gold that can be held in secret. It is not as if they can hold American $100.00 bills in amounts needed to pay bribes quickly, especially if they need to do so in the middle of the night, etc. One of the virtues of gold is, that it can be transported more easily than bales of paper bills AND WILL NOT BURN in case of fire. It is tailor-made for criminal activity. And, lets face it, the rich in China did not get that way by being honest, any more than the rich men in Russia did. Chairman Mao said that all political power comes from the barrel of a gun but these days, it comes from political power that can transfer wealth (government contracts, arms sales, etc.) in both China and Russia. NOW, let us pull away from my conjecture, and look at a couple of fundamentals. Japan and Europe are trying to get inflation up by monetary policy; and in terms of the Yen and the Euro, gold is up by as much as double digits; you folks may remember that I said that the Euro was too high when it was above $1.30 and that it ought to be below $1.25 and today it is at $1.23. It has to go down more, I say; so much for Rickards and his trade in favor of the Euro and against the almighty U. S. dollar. The dollar is very high, and VERY strong, but gold is being stubborn and is still trying to stay above $1200.00 which is the highest known (to me) cost of production. I believe that it is going to be difficult, in the absence of the big boys making mischief, to drive down the price of gold by manipulation. The ECB made a point of saying that they were going to look at purchasing all kinds of assets EXCEPT GOLD. SO, why did they say that? Because they do not want to drive up the price of gold any more than China does, in case they need to buy some quickly. This, I believe, is also true of all central banks, and the big banks like JP Morgan, etc. Note that all the experts keep saying over and over that gold is going to fall, to figures such as $800.00 or $900.00 and the other day Ron Insana wrote that $700.00 gold was a possibility. Lots of folks said $1000.00 gold by the end of the year. Well, it is Dec. 9th and time is running out for that to happen. I will not go as far as to say that it will NOT happen, but it does not look very likely to me right this minute. I think the people shorting gold are going to get their heads handed to them. People are speculating in paper that is supposed to be gold; I want to see where the actual metal is going. I do not even look at what GLD is selling for, or ETFs. If the flint ignites the powder in the pan, and the (geopolitical) gun goes off, where is the metal going? Who can produce it? ================================ As I write this, (23:42:30) Bloomberg says gold is $1230.74 or 74 cents above the low side of the trading range I called long ago. ================================================= bloomberg/news/2014-12-08/samaras-risks-snap-elections-with-december-president-vote.html
Posted on: Wed, 10 Dec 2014 04:56:42 +0000
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