17 January 2014

Gold Daily and Silver Weekly Charts - An Overly Well-Advertised Short Squeeze

Gold and silver had a little spirit in them today, with gold closing higher than its 50 DMA. The 100 DMA is a more important target, and even more important resistance above that.

But the structural buy signal is in place. Now we must see if the chart formations and price confirm it. In almost any other market I would say it was close to a 'lock,' but in the precious metals the true price discovery always seems elusive, as if by intent. 

There was intraday commentary about a possibly bloody Comex short squeeze that was referenced on the Canadian Business News Network here.

One thing that bothers me about this a bit is that if there is a bloody short squeeze, it may be one of the best advertised setups in the history of markets, and those money managers who are caught by it should be hounded out of their positions by their investors.  As for the small specs, they may take note of the analysts who have downplayed and dismissed this paper-gold divergence repeatedly.

Analysts purportedly acting for gold producers and suppliers constantly talk down the precious metals with a studied and persistent negativity, economists drop all pretense of thought to engage in simple mudslinging and propaganda, governments hide their own buying and leasing, large banks take huge positions thereby bending the rules of the exchanges with abandon, simple facts underlying supply and demand are treated as state secrets immune to audits, and disinformation campaigns ebb and flow.

Reading the cases made against 'the Aldrich Plan' in 1912 for a Third Bank of the United States, euphemistically later to be known as The Federal Reserve System, strikes a note when we see what has been happening over the last twenty years, with the rise of perverse and predatory banking, in the service of unfettered capitalism.

Yes this does sound like a bit much, conspiratorial and all that. 

And yet what else are we to think, when looking at the events which have unfolded before and after this most recent financial crisis, in which the perpetrators are bailed out, and walk away with millions, unscathed, while the relatively innocent are forced to bear the burden of the bankers' recklessness and greed?  And the political system is increasingly grown corrupt by big money, with record low approvals from the public, for whom the politicians no longer have any serious regard?

The will to the power of creating money and distributing it as one wishes without regard to the rule of law is the idolatry of our age, and woe to the careers of those who fail to offer obeisance at its altar.  What a festival of intrigues and vanities. And what rough beast, its hour come round at last, slouches toward Bethlehem to be born?

How can one not be interested in this?  It is the very fulcrum of our age.

I may post something on Sunday evening.  Have a pleasant weekend.