04 October 2013

Gold Daily and Silver Weekly Charts - A Plausible Explanation

There was intraday commentary about some ideas that another fellow and I had in the course of our conversations about gold inventories and price. You can read it here.

Except for the cloak room analogy this is essentially the common thread of what I and several other people have been thinking since the beginning of the year. The cloak room analogy does a good job of explaining the odd behavior of gold and silver inventories with price action.

It would not be surprising to see some Nixonian weekend action to accomplish this repricing, probably done in conjunction with the G20 for political 'air cover.'   Picking the time for this sort of event is highly improbable. 

I find it hard to believe that the G20 would allow the US to get away with a big revaluing of the dollar lower unless there was some complementary action in return.  A unilateral devaluation of a currency is a de facto form of partial default on debt and a subsidy to exports.

So read the theory, and make up your own mind. But if you keep it as a 'model' of what is happening in the markets, it covers quite a bit of ground reasonably well.  I will do so as well, and adjust it as things happen and more data becomes available.

There was no movement in the dealer (registered) COMEX gold inventory yesterday, but a 35,808 ounce chunk of HSBC stored customer(eligible) gold has left the building, and may be headed East.

Have a pleasant weekend. See you Sunday evening.