There’s an epic battle raging for control of the gold price and ultimately the Global Monetary system. The natural market is overpowering the manipulators, but they are desperately trying to hold it down.
Early Monday morning at 10 AM the Cartel smashed gold with over $2 Billion of naked paper shorts and it took less than 10 minutes. Let that sink in, $2 Billion of naked shorts.
Only the US Treasury in conjunction with the BIS (Bank for International Settlements) has the ability to throw this many uncovered naked paper contracts on the market at one time.
The same thing happened last Thursday and Friday and then again on Tuesday and Wednesday of this week.
The 60 minute chart below zeros in to show the massive hits that have taken place in the past 7 days. This is desperation like I’ve never seen it.
That’s not to say this has never happened before, but the difference is that in the past, once price was pushed down by the Cartel, it stayed down and the shorts were allowed to cover and profit.
Now we have a massive tug of war going on and the manipulators are losing control as the natural market just keeps bouncing back.
Large banks and hedge funds are pulling money from the stock market and piling into gold and silver at levels not seen since 2011. Every time the cartel smashes gold and silver, the smart money adds positions with each draw down causing price to bounce right back up again.
Wednesday’s Federal Open Market Committee statement recommending a rate hike in June created enough turmoil in the markets that the Cartel was able to use it to smash gold down even more.
By Thursday morning they were able to get it down below the 1250 level, which many believe is the target they were trying to reach.
I’m just not convinced they will hike in June. The real economy is in the tank and a rate hike will cause the stock market to collapse and gold to skyrocket as everyone moves from stocks to safety.
Marc Faber agrees: …the U.S. central bank will not raise rates and may actually resort to more easing.“My impression is that the Fed will not increase rates any further this year – my impression is that the economy is actually weaker than the statistics would suggest”
We are nearing the end folks. Eventually this short bottoming cycle in gold and silver will bounce and the commercial shorts are going to have to cover creating an epic short squeeze which will send the price of gold and silver into the stratosphere.
Patience is the key. We’ve been waiting years for this moment and we are finally at the door as it begins to open. This could be the month that all hell breaks loose. Hold on, it’s going to be one heck of a ride. (See comments under the Precious Metals sector for more details.)
Smart money is pulling money from the stock market and making a commitment to gold and silver like we haven’t seen in 5 years. The precious metal bull is well underway and the intermittent drawdowns are simply short term noise.
The Fed has drawn a line in the sand at 1300, but with everything they are throwing at the markets to get them down, the best they can do is keep gold and silver in a holding pattern as shown by the current bull flag pattern.
This current down cycle is just another step in the stair step pattern to higher highs. The market will pick up energy to the upside and once price breaks 1305; it’s off to the races for gold.
Either way, the precious metals market is in the early stages of an epic bull market that could last for years.
Stock Market: (SPY) (QQQ)
The stock market is breaking down.
Smart money has pulled over $90 billion from the stock market since the beginning of 2016 and corporate buy-backs are slowing down. The market has already rolled over and is struggling to get any traction.
Economic conditions are rapidly deteriorating and the stock market is slow to react, but it will and when it does catch up, you can expect it to happen in a hurry.
In the chart above, you can clearly see a head and shoulders pattern has formed as the market rolls over. The S&P has already broken the 50 day moving average and once it breaks below the neckline of 1230, we can expect a strong move down.
Energy Stocks: (XLE) (UNG) (USO) (LNG)
Crude has had an epic run and if you look at the chart, with the exception of the Stochastic being overbought, it looks like it could go up forever.
But the reason for oils rise was explained by Gerald Celente of the Trends Journal recently.
The Real Reason For Oil’s Rise Combined factors of massive wildfires surrounding the Alberta, Canada oil sands hub of Fort McMurray; economic and political turmoil in Venezuela that has added to supply disruptions; a dramatic 40 percent decline in Nigeria’s oil production following a rebel attack on pipelines and oil facilities, have driven prices higher … not the supply and demand fundamentals of the global economy.
The outages and disruptions in Canada, Nigeria and Venezuela are, for the most part, temporary and fixable. With oversupply outstripping daily demand by some 1.5 million barrels per day, in the absence of increased demand, particularly from China, which looks doubtful considering its negative Manufacturing Purchasing Manager Index and negative import/export data despite excessive stimulus, we forecast oil prices to trend between $30 to mid $40 per barrel range.
This does not make me feel good about a continued bullish trend in oil. In fact, I would consider shorting the energy sector at this point.
Commodities: (FCX) (JJG) (DBA) (JO)
Commodities took a major hit with the FOMC announcement on Wednesday, but it’s just temporary and I’m still bullish on certain commodities. The trend is currently rising.
(SLW) January 2017 CALLS
(GDX) January 2017 CALLS
(ABX) January 2017 CALLS
(FNV) January 2017 CALLS
(RGLD) January 2017 CALLS
(SPY) December 2016 PUTS
(IYF) August 2016 PUTS
5/16/16 - Monday
Gold Plunges After "Someone" Suddenly Decides To Dump Over $2.3 Billion Notional In 10 Minutes
China Taking Delivery of Barclays Gold/Silver Vaults (& Contents?)
China’s Largest Bank is Quietly Cornering the Market. This follows other Chinese vault purchases by China from Deutsche Bank and the JP Morgan Chase vault at One Chase Plaza (which reportedly has a secret underground vault with a tunnel connecting it directly to the Fed New York vault.) Make no mistake – these are more than real estate transactions. These are TRANSFERS of physical metal from electronic COMEX and LBMA contract holders that STOOD FOR DELIVERY. All unreported as per the LBMA’s Association Rules but they are physical transfers just the same. The bullion banks are being GUTTED at just the right time.
The Banks. These “criminals” fraudulently create unlimited amounts of unbacked paper gold and sell them to The Specs in an attempt to cap price and, ultimately, profit by covering at lower prices. Which side will win? With open interest near record levels in bothgold and silver,we’re likely not going to have to wait much longer to find out…