Gold Stays Stable Despite Gap Up

Gold remains stuck in its channel either side of $1580 an oz. despite the fillip given it yesterday by the chief of the Bundesbank when it gained $10 only to fall back today after the US open to $1587 an oz.

That Herr Weidmann, the Bundesbank boss, was speaking about the obvious should have been clear to all but yet we had an immediate gap up of $10. It is as if the investing public of all shades had believed that all was well in the EU and that a recovery was under way with no downside on the horizon.

Well pull the other leg!

The likelihood that the shorters got into a panic and covered their positions is a bit far fetched bearing in mind that the technical signals have not announced a significant move either way and the fundamentals, although extremely positive have not altered to any extent for the last few weeks.

Why Has Germany Got To Wait For Its Own Gold

Of course there was some short covering but the gold and silver market is not showing signs of great activity, just a small increase in trading can provide a short term stimulus to price, particularly in a precious metal sector renowned for its volatility.

Meanwhile buying gold bullion by the so called non developed countries continues unabated, diminishing annual gold production shows no signs of recovery and doubts continue to surface about the ability to cover demand should paper transactions become converted to bullion delivery. To top that no reasonable explanation has been made public as to why the US is unable to repatriate gold belonging to Germany for seven years.

  Gold, a Contrarian Argument

Out of over twenty analysts calling a high for the gold price in 2013 only four were over $2000 an oz., the highest being $2025, while the lowest was at $1400 an oz. What an opportunity for contrarians! In our view the bull market trend for gold and silver is still in place, the resolve of the refusal of the gold price to drop below $1550 and to continue to channel around $1580 despite the attractions of the Dow and S&P 500 components, is one good argument.

Look very closely at why the stock market has recovered so markedly and attracted so much money out of safe haven assets,  much of it at the expense of gold and silver, and you may come to the conclusion that it is built on very shaky foundations.

Whatever your thoughts and opinions, can you argue conclusively, that right now the markets are not being dictated to by US political propaganda, self interested Wall Street brokers and the fraudulent big banks? It is a sad reflection that so many are beginning to realise that the Land of the Free has given rise to one of the most corrupt political systems and hence administrations, and we don’t just mean this one, that it is possible to imagine.

The longer this lasts, and it will until the US is brought to its knees, the weaker the case for the dollar, the stronger the case for gold.

Category: Bullion