Monday, May 20, 2013

Ultimate Contrarian Indicator: Gold Is Most-Hated Asset Class

By now everyone who follows the metals pretty closely is aware of the stunning reversal the metals made today after the blatant smash in the silver market at yesterday evening's commencement of global electronic paper futures trading.  A massive number of silver contracts were sold into the Globex electronic trading system, taking the entire market by surprise and wiping out a whole series of stop-loss orders there set below the market.  The silver market was driven down $2.10 (9.5%) in less than 4 minutes.  It was without a doubt  the motivated, premeditated operation of someone who was trying to completely disrupt the silver market.  It was someone who was operating without any fear of being investigated by the market regulatory branch of the Government.

But a funny thing happened.  Once the initial shock had quickly worn off.  The market slowly moved higher the rest of the night.  By 10:00 a.m. Denver time, about 18 hours later, the price of silver was even with its Friday close.  Once that occurred, the market started to quickly run higher in frenzied short-covering.  As I write this, silver is up 2.4% from Friday's close and gold is up 2%.

So what happened?  To begin with, the enormous appetite for physical gold and silver was fueled even more by last night's lower prices.  Large premiums for gold bars, something rarely seen, are now being paid in Asia and India.  We are getting reports of up to 3-week delays for delivery.  But don't take that from me, if you go the Shanghai Gold Exchange website, you'll see for  yourself that no deliveries of gold have been reported for at least 2 weeks.  Unprecedented.  The deliveries are not being reported because the gold is not available to be delivered. Therefore there's nothing to report. This is going to end badly for anyone riding the coat tails of the manipulating banks by shorting this market, because I can guarantee you that they are covering their tracks and likely have shifted to the long side of the trade by getting long physical metal.  Certainly the net short position of the banks on the Comex is as low as its been in many years.

At any rate, I wanted to link an article written by the proprietor of the Acting-Man blog.  This guy lays out the contrarian indicator case for gold and explains why the western Central Banks are so desperate to try and discredit gold and discourage anyone from converting their fiat paper money into gold and silver: 
It is a good bet that if gold had continued to rise in the face of money printing being accelerated all over the world, the inevitable loss of faith in central banks would have happened sooner rather than later. That it will eventually happen is unavoidable – the modern monetary system was fated to self-destruct the moment it was conceived. This is so because central planning and price controls cannot work in the long run, even though central banks are socialistic institutions adrift in a capitalist sea, so to speak.
Here's the LINK.  I highly recommend taking the time to read this short, well-written and documented commentary, as it will shine a bright light on the truth for anyone who was equivocating about fact vs. fiction.


  1. Dave, I think it's too early to claim victory. We could still see more hammering in the coming days.

    1. Who's proclaiming. In truth, the catalysts that will drive gold to the moon will mean life around sucks for everyone. No will be a "winner" with what is coming at us...

    2. Hope this can help you out.

  2. I'm puzzled. Why the cartel has been doing such ruthless price suppression since last October? What's up?

  3. The price suppression/knock down is in order to allow the Central Banks to stock up on bullion. They regret selling their gold in the past thirty years and now realise they need to get some.
    What else is going to balance their accounts when all the trash on their balance sheet is reduced in value as interest rates start to move up ?? IMHO

  4. Banks Win Big as Regulators Refuse to Rein in $700 Trillion Derivatives Market

    Paul Jay of the Real News Network interviews William R. Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Originally published at Real News Network.

  5. Max talks to Sandeep Jaitly of

    They discuss feeding the ducks while they’re quacking and bitcoin vigilantes fighting the Fed. In the second half, Max talks to Sandeep Jaitly of about the imminent extinction of the price of gold as well as the permanent backwardation in both gold and silver markets.

  6. michael schumacherTuesday, 21 May, 2013

    wait until the feds charter expires at the end of the doubt in my mind that we will see the "good bank, bad bank" scenario unfold on a massive scale. Why else would we seemingly be headed towards a path of no return when the answer is before us.

    The Fed, as we know it, will be split down the middle and a new one put into place holding nothing but space to park the next round of trillion dollar "mistakes" by its owners. Accumulation of pm's allow this to be done more easily.

    Sure that sounds crazy however if I told you the fed would commit over $10 trillion to "save the economy" in 2008 I would be branded just as crazy for suggesting that as I am for positing the fed is on course to commit sepeku on itself and then blame everyone else.

  7. Why the whole banking system is a scam - Godfrey Bloom

  8. He said it is nothing out of the ordinary as Rand Refinery does refining of gold and silver for Africa as well as the conversion of gold from various other countries, such as the US.

    The company imports over 200 tonnes of gold per annum and its activities are not necessarily event or country specific," although it does not source any metal deposits from conflict-affected areas, he added.

    Craig said the company could not acknowledge or attest to any statistics or facts that had not been provided by the company itself.

    The commodity movement was detected in recent United States trade data that showed South Africa's $402-million trade surplus with the US in January had turned into a $689-million deficit by March.

    Analysts said moving gold in or out of the country would certainly have to get approval. This would need to be done from an exchange control point of view and would probably be controlled by the Reserve Bank.

    They added that it was likely that a client who had invested in the gold futures market had decided to take physical delivery of its gold bars in the US when the contract expired.

    The gold is most probably just passing through and bound for markets such as China or India. While there are refineries in North America, gold can be sent to different refineries around the world depending on prices or existing relationships.

  9. The gold market is of course complying so far, as the clients of the banks issuing bearish reports are bailing from their gold positions.

    gold bars for sale