Loading ...By the way, Friday saw another 40 ton sale which broke the “price” by $20. Over the last month, we have seen three separate 40, 80, and another 40 ton operation performed all within 15 minute windows. Who would ever sell in this fashion if they wanted to sell at the best price possible? Why not sell all of this “gold” spread out through the day and not damage the price (and psychology)? The answer of course is obvious for anyone willing to see, the sales had a purpose of “setting” a price, a LOWER price.
Bill H addendum…
As an addendum to this morning’s writing, it looks like we had the hoped for “outside reversal day”. This one will look funny on the charts because it actually encompasses 2 1/2 days trading. Wednesday was a weakish day and gave up the $1,200 level while Friday was a washout down $26. Overnight Sunday, gold opened down and traded well below $1,150. This action was blamed on the “no” Swiss vote and brought out all of the doomsayers. The sentiment last night was “gold is over”! I wrote the short note at the bottom of my piece this morning as I saw gold quoted on Kitco down $6 (which was really up close to $20 from Friday’s close). I believe the confusing quotation by Kitco was because of the shortened day in N.Y. on Friday. In any case, we have now rallied another $35 from where I wrote the note this morning. Silver has had a wilder ride up 17% off the early morning lows.
Recall, we had two previous Fridays with outside reversal days, this makes a 3rd, though not a Friday. I view today’s action as much more important for several reasons. First, this actually encompassed 3 trading days where the previous two “engulfed” only the previous day. This one is occurring with a close above what had been a very sticky area $1,200 and actually broke briefly above another line in the sand $1,220. Any and all shorts placed in the last week are now under water with the momentum now higher. The GOFO rates went further into negative territory with the 1 year rate at virtually zero, this should never be. Logically there should be arbitrage to take this condition away but the “trust” (that you will get metal in the future) is apparently waning.
Something behind the scenes has changed drastically to have seen these three outside days within such a tight timeframe. This of course has been accompanied with record backwardation. The danger now as I see it could be “supply” or the ability to procure metal. I have postulated several times before, the danger is going to bed and something financial “breaking” while you sleep. The result could be gold and silver going no offer and you being stuck in place with whatever your positions are. Is this it? Will it happen immediately? I have no idea though I personally am not willing to bet against it. For now I will only say, “something has drastically changed” behind the scenes and along with it, “sentiment”! If you are still waiting to back up your truck, it may be that the “loading dock” is now moving away.
***