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Draghi Whips Out His Bazooka; “$1400 Gold Could Happen Quickly” – Alasdair Macleod On SD Weekly Metals & Markets

Image credit: William Banzai7; http://www.zerohedge.com/news/2016-03-10/euro-pecker

Image credit: William Banzai7; http://www.zerohedge.com/news/2016-03-10/euro-pecker

SD WEEKLY METALS & MARKETS

With Super Mario Draghi dropping a bomb on global financial markets Thursday, Doc & Dubin welcomed Alasdair Macleod out of London back on the show to break down the implications for the markets, gold, and silver.

  • On Draghi’s Bazooka QE: “It’s actually quite terrifying…
  • On Gold:  There is a Golden Cross Underneath a Rising Gold Price, as well as a Pennant Formation!  We’re looking at a minimum gold price of $1400, and it could happen quite quickly…

sd weekly metals and markets - mm

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SD WEEKLY METALS & MARKETS WRITE-UP

By Eric Dubin

To my surprise, we didn’t see much Federal Reserve jawboning this week.  We certainly had the perfect set-up for flapping gums.  Perhaps Fed officials were laying low as the ECB and Draghi took center stage?  In any event, the Federal Open Market Committee (FOMC) meets next Tuesday and Wednesday to discuss interest rate policy.  It’s very unlikely the FOMC will decide to hike rates.

Most analysts and pundits in the precious metals camp are uneasy, expecting a big correction and/or cartel smack-down at any moment.  I’ve outlined a few set-ups where risk for another attack has been elevated, but each time we do see profit taking and cartel capping, buying overwhelms it and at worst, we have trended sideways on a weekly basis.  You can see this most clearly in the gold trade from March 3, onward.  The cartel uses time in its favor, attempting to exhaust momentum and as we move through these sideways consolidation patterns, a veritable paper issuance fiesta is underway (COMEX and beyond), absorbing rising paper demand.  However, both paper and physical demand are not letting up, and the stalling to dilute momentum tactic hasn’t worked.

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Bottom-line:  Once again, we have a set-up for a hit next week.  However, any damage the cartel is able to inflict should only be a very short-term challenge, requiring only a week or two for repair.  Unlike April, 2013 or any other period over the last four+ year cyclical precious metals bear market, a much larger percentage of conventional money under management is not under any illusions about a European banking sector recovery, nor global economic recovery, as was the near-fully subscribed hopium of recent past.  A growing percentage of the conventional finance world can also see that the U.S. economy is in trouble, that the wealth effect is a lunatic central bank policy myth, and attempting to paper over a solvency crisis with more credit has failed.  These fundamentals and more are indeed why we have seen the birth of the third phase of the precious metals bull market.

Weekend Links:

If you’d like to follow Alasdair Macleod’s work, you can find him at SilverDoctors and at GoldMoney.com.  The first article below notes that the technical situation for the gold price has sharply improved, to the evident surprise of many mainstream analysts. It discusses possible reasons behind the turnaround, and implications for the future.  This is the article that Alasdair references during our podcast.

Thanks for checking out this week’s podcast. — Eric Dubin

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About the Author

- Mr. Dubin is the Managing Editor of TheNewsDoctors.com. He has 25 years of experience as an independent buyside securities and global macro analyst. He has well over a decade of experience as a financial journalist, editor and political analyst. He's primarily an autodidact, but his formal education includes degrees in economics, international relations and MBA. He welcomes feedback on his articles and will make an effort to respond to comments. Email Eric by sending to "Eric" and then @TheNewsDoctors.com. He can also be "followed" on Facebook: https://www.facebook.com/EricDubin

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