21 February 2014

Gold Daily and Silver Weekly Charts - Coiling Into Option Expiration

Yes it is that time again as next Tuesday is another option expiration for the precious metals on the Comex. See the calendar chart below.

The Comex warehouses continued to shuffle their chips and cards, with no meaningful movement of gold bullion in or out yesterday.

Gold is obviously coiling in a symmetrical triangle at key resistance, within a large inverse H&S formation, and an even larger 'W formation.'

I do not expect the Comex situation to resolve itself this month, with continuing low inventories of deliverable gold and antics with price and delivery being played until there is some shock from outside the pits, some failure to deliver that cannot be covered up or brushed aside. 

It *could* break right at the Comex, but I suspect that the price setting mechanisms there are sufficiently divorced from the real market so that Comex will be collateral damage to some much larger event. 

It takes patience in times like these, since things unfold slowly when you watch them every day.  But when the time is come, it seems as though it happens all in a rush, and the inevitability of it all appears to have been written large on the wall. 

That is how it was with the last financial crisis, and that is how it will be with the next one which is probably no more than two years away.  While the policies and fundamentals remain the same, it will be foolish to expect other outcomes.

Have a pleasant weekend. See you Sunday evening.