04 February 2014

Gold Daily and Silver Weekly Charts - Signs of the Times

"Ne respondeas stulto iuxta stultitiam suam ne efficiaris ei similis."

Prov 26:4
This is a Non-Farm Payrolls week, and it is a heavy delivery month, although as Rik Green notes the contracts standing are quite a bit less than at this time last year. Still, given the thin deliverables at these prices it should prove to be interesting.

Gold is moving from West to East, of this there is little doubt. Well, some can doubt it, but those who repeatedly deny it, or tend to dismiss it, may be saying more about themselves than they do about the market.

The more interesting question is what the markets are saying to us, and what the price, demand, and supply action are indicating with regard to the future, and the sustainability of certain noticeable trends.

The action on the Comex is interesting, but the real game is broader globally. There is a huge change underway, but unfolding slowly, in the international currency markets. If someone does not get this, then they really do not understand what is happening. There is no fault in that, because so few really understand money, and the lack of transparency is clouding, even moreso by the fog of war.

There was some movement of bullion into warehouse storage at HSBC yesterday, but otherwise little activity.  JPM seems to have the whip hand on the Comex and in the precious metals derivatives markets, but not so much in the physical markets which seem to be wiggling through the fingers of the bullion banks, and perhaps much to their dismay. 

As Ted Butler noted in his weekly review on Saturday:
"Quite literally, what JPMorgan does or doesn’t do determines the price of gold and silver. It’s easy to lose track of the big picture when one focuses on all the details. But when you step back a bit, JPMorgan is dominant in just about every detail."
Ted does an exceptionally good job of analyzing the Comex market, and I appreciate his efforts.  I do not need to agree with someone to gain significant benefit from what they have to say, provided their reasoning is based on some identifiable data and information.  Sources like this are a blessing.

I am rather reluctant to lay any wagers on JPM's motives based on this information however. It is not clear to me where their ultimate interests, as well as profits, may lie in this matter.  And for whom they may be acting, even as they seemingly take positions for their own accounts.

Unfortunately, this is the nature of the game, in times of currency wars.   Some of the TBTF Banks act as instruments of policy for their respective governments from time to time, and are certainly beholden to them.  Everything is not always as it may seem.  And so we must place our confidence where we can, and with some care.

Have a pleasant evening.