Today was what we call a 'technical trade.' The insiders saw an opportunity to make some quick cash by running the market up.
There was no real news underlying the rally, just greed meets opportunity in a light volume market.
As I cautioned yesterday, it is sometimes perilous to short a dull market.
Oracle warned after the bell.
Europe remains a significant risk. The US economy is floundering despite the recent spate of triumphalism in celebrating a 'recovery' while Europe lags. The day of reckoning for Wall Street and Washington lies ahead.
Be careful trading this holiday market. It is highly cynical and given to manipulation to say the least. Use no leverage or time frames as they will be used against you.
No matter what they do to prices in the short run, the longer term trend is intact. The paper markets will continue to diverge from the underlying physical market. The silver market appears to be more strained than any other, even gold. When the market system breaks it will be the result of a wilful fraud.
“The Chinese have continued to take delivery of both physical gold and silver directly from the ETF’s GLD and SLV. They are also going directly to producers. Entities are bypassing the COMEX altogether and going straight to gold mining companies. Every single month producers have a certain amount of gold and silver they sell. Normally they sell it to the bullion banks and the bullion banks, of course, leverage this gold and sell up to 100 times that in paper markets to control prices.
They (bullion banks) hold that little bit of physical gold and claim they are backed up on their position to the CFTC. I have all my large buyers now going to producers and saying to them, ‘Look, don’t sell it to the bullion banks, we’ll buy it from you.’ So we are buying directly from the producers and this includes some sovereign entities which are doing the same thing.
We’re struggling to get the physical out of these guys (producers) because they have so many people banging on their door, saying, ‘Sell it to us direct.’ What these buyers are doing is essentially taking gold out of the system, which means the bullion banks can’t leverage that gold anymore.”
"London Trader," An Historic Bottom in Gold, King World News
