06 October 2014

Gold And Silver Divergence: Enter the Dragon

After beating Chuck Norris like a rented mule.
Most people who follow these things are aware of the remarkable expansion in open interest on the Comex in silver contracts during this price decline.

This is unusual because more often open interest follows prices, as metal bulls open contracts with buying or close them out with selling.

Gold is following the more conventional decline.

But on the other hand, we have silver inventories increasing remarkably in the 'transparent holdings' which Nick Laird, data wrangler, tracks for us.   Nick has some of the best collections of regularly maintained charts around.

And gold inventories have continued to be drawn down.

One might say that physical gold is disappearing, and silver is being overwhelmed by paper selling.  You could conclude other things of course.  And that is part of the problem with the opaque NY-London markets, so many of which have been revealed to be rigged.

I emailed my friend Dave last night and said, 'I think with this overnight plunge to 1183 the bottom is in, with a possible retest.'   Let's see if that holds.  It certainly is oversold with record short interest in gold.

One of the reasons it feels like a bottom, besides horrible sentiment,  is because the usual suspects and shills have been slithering out from under their rocks to spread their gloom, for their own books and for some of the funds as well I suspect.

China comes back from its holiday this week.  And they are not happy about alleged US interference in the Hong Kong demonstrations among other things.

As you may know one of the big rumours is that a deep pockets long is holding quite a few December silver contracts and refusing to fold them against downward price pressures.  The most frequently heard name is China.  There are a number of motives attributed to this.

Since the markets are opaque we can only guess.  I am keeping a close eye on the fundamentals, as I think the technical measures on the US markets are dodgy to say the least.  The Banksters have their fingerprints all over these markets, and there are too many odd things going on to make a reasonable person confident in their integrity.

Of course only about 1 out of 10 Americans bring a reasonable skepticism to these matters.  So for now the bullion Banks are having their way.  Not so with the rest of the world, however.

Do you feel a marked friction between the US and Russian/China and a few other nations?  Those I believe are the manifestations of the ongoing currency war, which is another name for the strain of a continued supremacy of the Imperial Dollar as the measure of value and primary basis of international exchange.

The times they are a-changing.