09 December 2014

Gold Daily and Silver Weekly Charts - On the Cusp - With All Respect To Willem Buiter

"We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake.  Therefore at any price, at any cost, the central banks had to quell the gold price, manage it. It was very difficult to get the gold price under control but we have now succeeded. The US Fed was very active in getting the gold price down. So was the U.K."

Sir Eddie George, Governor Bank of England to Nicholas J. Morrell, chief executive of Lonmin Plc.

George Osborne, Staring at the Abyss Once Again
Gold ran up to almost the exact resistance of the bear flag. No coincidence there.

Silver also took back the 17 handle.

Follow through is everything.

Looking at the Comex delivery reports, there are a large number of gold contracts being stopped, not so much silver.

But in the warehouses, gold is relatively quiet, while silver bullion continues to see movements in size.
With all due respect to Willem Buiter, the Citibank economist who spotted the 6,000 year bubble in precious metals, gold and silver will more likely be considered de facto money when today's paper dollars, and the lords of the central banks who created them, are nothing more than dirt under a toddler's fingernails.

I think the gold market in the US is a paper fake.  There is almost no doubt in my mind now.  It is no more tied to fundamentals than Liar's poker is tied to the US currency levels.

During the day I mentioned to Bill Murphy that the physical markets will some day deliver a size twelve shoe, with likely some impressive velocity, into the posterior of the US financialized markets.

And at that point, the smarmy hands of Wall Street will once again come slithering towards our pockets, perhaps wearing the cuff links of the Federal Reserve, and be expecting a bailout to 'save the system.'

God have mercy, if we allow that to happen again.

Have a pleasant evening.