Jannet Yellen’s testimony before Congress offers an opportunity for sending traders running for cover, as central bankers and government interests work to manage the mess they have created in hyper-managed financial markets and a Western banking system bloated by decades of mainlining liquidity heroin in a boom-bust financial markets driven leverage cycle. To think that the creation of the Fed was partially justified on the notion that it would engender stability in financial markets and the banking system!
TND colleague Dave Kranzler spotlights yesterday’s operation to manage precious metals upside and today, we are witnessing yet another example. Click here for Yellen’s Congressional testimony. – Eric Dubin
TND Guest Contributor: Dave Kranzler
The price of gold & silver have had a big move since mid-December, despite the flood of “fake news” connected to the temporary disruption of gold imports into India precipitated by Modi’s now-failed attempt to limit the ability of Indians to buy physical gold and despite the plethora of fake news about the quantity of gold flowing into China both before and after after the week-long Chinese New Year observance.
John Brimelow asserts in one of his Monday updates that, “Viewed from a US-centric and technical perspective, gold’s friends have something to worry about. However the Asian buying is about as strong as it ever usually gets and for that reason the Bears’ prospects are probably limited.” Note, the “technical perspective” indirectly references that use of paper gold by the western bullion banks in their attempt to control the global price of gold.
As an example of the price-control mechanism implemented in the western paper market, you’ll note that after a surprise bounce in gold on Friday, likely stimulated by paper short-covering on the Comex, was met with an attack after the Monday a.m. LBMA gold price “fix” and again right after the Comex floor paper gold trading commences:
These are typical times during the day, when the physical gold buying markets in the east are closed for the day and the western paper market manipulators take control of global gold trading via LMBA forwards and Comex futures and OTC derivatives.
Just as notable about Friday’s move higher in gold during NY trading hours is that fact that the price was moving in correlation with a move higher in both the dollar index and the U.S. stock market. Often, there is an inverse correlation between gold and the USDX/Dow/SPX.
There’s is an “invisible hand” in the market pushing the prices of gold and silver higher in defiance of the attempted price control schemes being exerted in London and New York. This silent operator is without the pressure being exerted in the physical market.
This week I’m sure will prove to be a bit of a price roller-coaster, as the semi-annual “Humphrey-Hawkins” (as it used to be called) Fed Chairman testimony on monetary policy and the economy is a time used by the western CB’s and bullion banks to control the price of gold using paper. After all, they can’t have the price of gold moving higher when the Fed’s El Hefe is extolling the virtues of the fiat currency and fractional banking system in front of Congress and the world, which begins today.
The point here is that it’s my view that the next longer term trend move in gold is higher, which means that price attacks should be used as buying opportunities, both for the metal and the mining shares. In fact, the mining shares were quite stubborn about going lower when gold was being hit hard in New York after being hit hard in London. Typically this is a signal to the market that prices in the precious metals sector are going higher.
These premiums [the ex-duty import prices being paid for legal kilo bar imports in India] are actually quite remarkable as the need to import kilo bars only arises if Indian demand is not satisfied by Dore imports (which had a duty advantage of $15.52/oz this afternoon) and smuggled gold. Reports of apprehensions at Indian airports are continuing to appear, indicating that smuggling has in fact revived. – excerpt from John Brimelow’s Gold Jottings Report (contact John at firstname.lastname@example.org to learn more about his service)
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About Dave Kranzler:
I spent many years working in various analytic jobs and trading on Wall Street. For nine of those years, I traded junk bonds for Bankers Trust. I have an MBA from the University of Chicago, with a concentration in accounting and finance. My goal is to help people understand and analyze what is really going on in our financial system and economy. You can follow my work and contact me via my website Investment Research Dynamics. Occasionally, I publish on Seeking Alpha too. As a co-founder and principal of Golden Returns Capital, LLC Mr. Kranzler co-manages the Precious Metals Opportunity Fund, a metals and mining stock investment fund.