James Turk: Only One Defense Against Fiat Currency — Dump It For Gold
Published: May 24, 2012 by GoldSpeculator
"The other standout is the price action in the precious metal equities. There are very deep pockets buying everything in sight. "
Well, you can believe what you like, but the moves in the currency market had very little to do with overall price movements in the precious metals yesterday. It was a bear raid across all four precious metals. And, as usual, it was silver that was singled out for special attention, although palladium came in a close second.
It's really too bad that all the trading action between the Tuesday cut-off for Friday's COT report...and what happened during the New York trading session yesterday...won't be in that report. My closing comment in yesterday's column read as follows..."I have no idea what will happen pricewise during the Comex trading session today, but it's pretty much a given that it won't be without incident." That's precisely the way it turned out.
And as Ted Butler pointed out in his two paragraphs in today's column, we are in "no-man's land" price wise, with the critical moving averages well above current prices, so the technical funds will be mostly M.I.A. until we break through them...starting with the 20-day m.a...and then the 50-day. So the bullion banks and their cohorts can do pretty much as they please...and they are.
But unless they are able to engineer the prices in both gold and silver lower than they were about a week ago, they are not going to get any renewed spec long selling...or fresh shorting. The only food supply for 'da boyz' right now are the new spec long positions that were placed since last week's low, and that wouldn't amount to a hill of beans.
The other thing going on at the moment is that we're coming up hard on the June delivery month...which is a big delivery month for gold. It's pretty normal at this time for JPMorgan et al to flush out all the weak spec longs prior to first notice day, and that is probably part of what's going on now. I'm not sure whether we have options and futures expiry on the Comex late this week or early next week, but I expect the selling pressure to continue unabated until then. Of course I'd love to be proved wrong.
One of other price scenarios I mentioned as a possibility in my Tuesday column was as follows..."I'm also wondering if we're going to see a repeat of what happened during the last two weeks of December 2011...where we hit an interim bottom at mid month...and a week later 'da boyz' rolled the price over between Christmas and New Years Day...and gave us our final low for that move down."
Well, we came very close to that scenario in gold over the last two trading days...and here's the 6-month chart so you can compare this mid-May move to the mid-December move of 2011.
(Click on image to enlarge)The silver chart looks similar. We aren't there in platinum yet...but we're well below the lows set in palladium for December and early January. Is there more pain to come? Don't know...but if there is, you'll know where you've seen this picture before.
The other standout is the price action in the precious metal equities. There are very deep pockets buying everything in sight. What do they know that we don't. I always worry that these buyers are just loading up on shares to sell into the next rally in order to cap it...or are they buying because 'this time it's different'? I don't know...but I'm praying for the latter...and always on the lookout for the former.
Here's the 6-month HUI...and except for Tuesday, it's been up five days of the last six...and that's despite what the metal itself is doing.
(Click on image to enlarge)Neither gold nor silver did much during the Thursday trading session in the Far East...but the moment that London opened at 8:00 a.m. local time, both metals got sold off a hair. The volumes in both are getting up there, but well below the volume levels of Wednesday at this time of morning. The dollar index has hardly moved at all since 6:00 p.m. in New York last night...and has pretty much flat-lined around the 82.10 level.
And as I hit the 'send' button on today's column at 5:20 a.m. Eastern time, gold is down about six bucks...and silver is down a dime.
It will be interesting to see what price action is in store for us when the Comex opens this morning. I'm always cheering for 'up'...but if it's down, you'll know why.
I hope your Thursday goes well...and I'll see you on Friday.
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