"The thing is right now we are nowhere near bubble territory. If gold were $10,000 we’d be having a conversation about whether that was a bubble, but at the $1,800, $1,900 level that’s absolutely not the case. If you are going to ride this long-term trend at the very high levels that we are talking about, you are just going to have to bear this volatility...."
Jim Rickards
This certainly appears to be a 'risk off' scenario for the metals and the dollar, as statements from Europe rallied stocks and caused some money to flow back into riskier assets and out of safe havens.
But the action in the metals for the past few days has smacked of a determined effort by some large entities, quite possibly central banks, to drive the price down and keep it from breaking out and running higher over $2,000. The timing of a determined gold price action in light trade with the Swiss Bank intervention in the franc.
I suspect we may see additional interventions over the next few weeks, as suggested by the ECB today, and of course in conjunction with the FOMC meeting next week.
The central banks of the West appear increasingly desperate to avert a financial crisis, and the discoveries that proceed from market breaks such as this. And desperate people do desperate things, especially when it involves conflicts of interest and potential charges of malfeasance in office.
I had warned that with the FOMC and a Comex expiration next week we should brace for a rough time in the metals. That comes with the territory. We are having a correction in a bull market.
Stay away from leveraged and short term betting, and play the longer term fundamentals if you find this sort of volatility to be unpalatable.
Gold-Backed Dollar Puts Fair Value at $10,000 Per Ounce - Bloomberg
