Dan Norcini says it like it is, the chart looks exactly like a currency chart following central bank intervention. In reality, this is what must happen and facilitates Freegold. For gold to achieve its true cash price, paper gold must be completely discredited and abandoned in favor of the real thing, physical gold. Selling in the manner that Trader Dan describes is the least effective way of a long to exit a trade and guarantees the seller will be bidding against himself. If you are selling to establish a new short position, it is the worst possible time because again you will be asking against yourself, resulting in an impaired sales price. The only person or entity happy with this occurrence is one who does not care about profit. Hmmm?
The only entity who would execute such a trade with utter disregard of profit or loss is a central bank or bullion bank doing its bidding. This sale is simply gold that does not exist entering the market and adding to the massive supply of Paper Gold that already exists. This is aiding the process to discredit paper gold just as the Bernank’s QE is discrediting the dollar. Eventually the dollar will suffer a crash in confidence and will be redefined. The same will occur with paper gold. The capital that resides in paper gold will flee to the real thing and will result in a gold price that is many multiples of current price.
Gold needs to flow or our global economy will come to standstill. The Bernank knows this as well as all the other central bankers of the world. Gold and oil flow in opposite directions and the world runs on oil. The central banks will continue to provide the world with cheap gold in return for cheap oil. As long as physical gold can still flow, where people are willing to part with the real thing, the desire to manipulate the price lower will exist. Lower gold prices are supportive to someone who wants to lock in paper profits in exchange for physical gold. Lower prices also discourage weak investors from entering fresh positions in bullion, leaving more available to flow to the Middle East for oil. All of this works until it does not work anymore, when confidence is shattered in paper. Then gold will no longer flow, it will be hoarded. The result will be a collapsed paper market and a spot gold price that launches into orbit. Physical gold will be impossible to acquire at any price.
So, use clumsy gold interventions such as this latest one as an opportunity to acquire what will be soon enough unattainable. Feel a deep sense of gratitude towards the bankers that are facilitating this process that gives you the opportunity to walk in the steps of financial giants and acquire real money at very cheap prices.
I mentioned in my midday comments that an effort would take place to prevent gold from moving beyond $1900 in an attempt to paint a double top on the daily price chart and induce a round of technically related selling from speculators on the long side.
This effort can clearly be seen in the following ONE MINUTE BAR CHART which reveals an enormous spike of 4,000+ contracts in the middle of the evening during a time period in the gold trading not normally known for this sort of volume. The question must now be raised – if this was a hedge fund blowing out of a long gold position, why wait for such a low liquidity environment in which to execute to trade knowing full well that by so doing, one would be guaranteed the worst possible exit price for the trade. Also, since the price of gold has been RISING and NOT FALLING, why would any gold long be forced to unload a position. It certainly is not under any duress from price action.
We can probably eliminate this as the cause therefore since only the rankest of fools would attempt such a thing.
The next question that must then be raised is if this were a hedge fund doing the selling to establish a fresh short position, why would they sell in such size at such an hour guaranteeing themselves to be filled with a fresh short position at the worst possible price by selling into a hole? The logical answer is that they would not do such a thing.
By the process of elimination and due to the fact that a major attempt by a Western Central Bank (the Swiss National Bank) to deliberately debase their currency occurred less than 24 hours previous to this selling barrage, added to the fact that an obvious raid took place on gold knocking it down below $1900 during the time frame in which the Swiss Franc devaluation was announced, this huge sell order must be therefore traced back to the Western Central Banks which are now going after the gold price in an attempt to cloak their utterly incompetent, impotent and predictable response to the current economic woes of the West.
To assume that the ECB, the Federal Reserve, the Bank of England, the BAnk of Canada, and any other major Central Bank of the West did not have previous knowledge of the plans by the Swiss National Bank to debase the Franc is to live in a fantasy land and be devoid of all sound wisdom. Of course they knew beforehand as something of this importance would not be done unilaterally by the Swiss.
The attack on Gold is therefore an effort by these modern day alchemists who are attempting to achieve prosperity by magically altering slips of paper into something that might constitute value in the eyes of the beholder to discredit the yellow metal and send it carreening lower.
China must be watching this with both disgust and delight. Disgust in seeing the depths of corruption that ails the Western monetary system and delight in the fact that the machinations of these conjurers is providing a discount in the price of the metal which they will be more than pleased to accept.
Take a look at the following chart and tell me with a straight face that this is NORMAL trading action. Any trader worth his salt knows this chart looks amazingly like a chart of a currency facing INTERVENTION PRESSURE from a Central Bank