20 January 2015

Gold Daily and Silver Weekly Charts - Sailing - Greek Elections, Europe's Identity Crisis

"Every man has a right to his own opinion, but no man has a right to be wrong in his facts...

Gold has worked down from Alexander's time. When something holds good for two thousand years I do not believe it can be so because of prejudice or mistaken theory."

Bernard Baruch

“What is a cynic? A man who knows the price of everything and the value of nothing.”

Oscar Wilde, Lady Windermere's Fan

I think you might replace the word 'cynic' in Oscar Wilde's famous quote with the word 'trader.'  Especially the traders we have out and about in today's markets, who are better conmen than policy advisors.  Of course one might say the same thing about our esteemed Congressmen, so perhaps it is better to say nothing, except to grasp your wallets more firmly.

President Obama will be giving his State of the Union tonight. Expect to hear some nice headline making proposals that will not have any impact on real legislation or policy. And this is by intent.

The plutocrats of Europe will be watching the Greek elections carefully on January 25.  You may wish to keep an eye out for them as well.  The EU is concerned that a left leaning government may be voted in that will buck the austerian trend.

American leadership has dementia, and is going to keep blundering around doing the same old, ineffective things, until something happens to change the situation.

Middle class income has been stagnant for forty years. Expect this to get a little attention, talk-wise. But little will be done.

Gold continued to climb today, which is remarkable given how far it has come. It has now taken out all of its more widely watched moving averages including the 260 DMA which I watch.

I would like to see it break out above 1320 and firmly put a stake into the old trading range from a couple years ago.

Longer term gold may very well have much more upside. However, until we see at least a de facto default on the price-rigging scheme involving leverage and paper gold, I am not ready to assume that the banking cartel has thrown in the towel.

It is fascinating though, to see the congruence between the collapse of the Swiss franc-euro rig and the gold-dollar rig. I don't believe that the Swiss were the major leader of that gold pool. They do not have enough gold or throw weight in terms of the precious metal. They are more of a handler, a facilitator.

Rick Harrison, the 'star' of Pawn Stars, was a bit more on his 'home turf' as the conversation continued to turn to things he understands from his day to day business.  Rick is a retail merchant of gold.  And he said, flat out, that his biggest trouble now is that his suppliers in the US have no supply for him.  They are out. 

And the continuing depletion of the West's readily available gold inventory by China has put pressures on the banking cartel that have caused the price to rise.  Again, one has to remark on the timing, with gold rallying as the Swiss peg to the euro, failed.

This I can believe, because I have heard this and seen circumstantial evidence of it.  Higher prices would ordinarily be the remedy for a shortage in the supply of something.

The problem is that supply has to catch up with over leveraged speculation and multiples of rehypothecation and undisclosed risks, which is what caused the capital markets to freeze up in 2008  This market does not need more paper gold.  It needs bullion.

Let's see how gold and silver proceed from here, to see something on the charts that might help us to determine what the upsides might be, and how good this breakout is.

Have a pleasant evening.