GOLD 0.51% $1,391.7 gold futures

some comments from todays midas in le met

  1. 3,360 Posts.
    Every dog has his day. It’s nice to be right on for a change on gold. First, let’s get the outrage over with over the capping of the price of gold before the biggest option expiry of the year. What you just saw, and mentioned day after day in this column, is nothing short of criminal. The fundamental reasons for gold to do what it did today have been present for weeks. But The Gold Cartel, and other Comex shorts, held off this rally until their significant written call options expired out of the money.

    Strong physical demand manifested itself and The Gold Cartel sounded retreat this morning. The AM Fix blew through the $750 Maginot Line resistance level and came in at $758.50. That was only Jacks For Openers as the more important PM Fix came much higher at $774.50. We ended up with 4 aces as gold soared to $800 before setting back due to profit taking and resistance at its 50 day moving average right at the $800 level.

    The move up in gold this morning was as formidable as I have ever seen … as it made new high after new high without much outside market help. Gold rose $25 and the dollar didn’t budge and oil went down on the day.

    The incredible gold surge obviously was more than a standout … as was the horrendous stock market action of Citigroup and JP Morgan Chase. Even when the DOW was up more than 100 this morning, their share prices began to go straight down … down about as fast as the fast move UP in gold.

    Now THAT is SUPER scary and might have been an impetus for the gold surge … for two reasons…

    *These two institutions are pillars of the US financial sector. If they are in serious trouble, after all that bailout money, our system is in the deepest of trouble. With the amount of derivatives on their books anything can happen … and it seems the market knows it.

    The most veteran of Café members will recall how after the surprise Washington Agreement on September 26, 1999, gold exploded and almost blew up the financial world because gold option volatility went bonkers. Well, yesterday longer term US interest rates fell apart, only to recover a fair amount today. We all know the trillions in interest rate derivatives JP Morgan has on its books. It is possible, and we need look for smoke, that JP Morgan could have an interest rate derivatives problem … perhaps Citi too.

    *Both institutions are bullion banks. I have been pounding the table for many weeks about them possibly hitting the wall as far as being able to supply surreptitious central bank gold into the marketplace.


    Perhaps The Gold Cartel held everything together until the option expiry. If so, and it sure appears that way, gold could explode out of here … with silver close behind.

    I’d like to add that gold has moved up from the $700 level to the $800 level with the dollar right off its highs. As I have said for years, the key to the gold market is not what the dollar does, but the ability of physical demand to overpower The Gold Cartel. Today was a perfect example of just that.

    There will be all kinds of gold coverage today and reasons why gold went up so much on this Friday. I won’t waste my time reading any of them as most will reiterate the reasons given why gold has been acting so poorly and not going up. It will be drivelsville.

    The gold open interest fell 5117 to 285,443 contracts into new low ground. How typical … The Gold Cartel drives the specs out of the market right before it soars. Aren’t our free markets a thing of beauty?

    The silver open interest rose 194 contracts to 92,123.

    Both open interest levels are at EXTREMELY low levels, as the specs were blown out. However, as gold takes out $800 and silver blows through $10, they ought to come back in to fuel much higher prices.

    As mentioned, gold was putting in a formidable base and has now broken out of that base:

    December gold
    http://futures.tradingcharts.com/chart/ZG/C8

    From a bigger picture perspective, gold has clear sailing:

    Weekly gold
    http://futures.tradingcharts.com/chart/ZG/W

    Silver struggled all day and has a way to go to breakout, needing two closes above $10 for starters, but really has to close above $10.50…

    December silver
    http://futures.tradingcharts.com/chart/SV/C8

    Weekly silver
    http://futures.tradingcharts.com/chart/SV/W

    A close above $10.50 should send silver SHARPLY higher and FAST!

 
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