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March 24 - Gold $416.90 down $2.60 - Silver $7.61 down 8 cents
Gold And Silver Perform Admirably Under Cabal Assault
When opportunities occur through events, but you are unable to respond, you are not smart. When opportunities become active through a trend, and yet you can not formulate plans, you are not wise. When opportunities emerge through conditions, but you cannot act on them, you are not bold." Zhuge Liang, war strategist.
GO GATA!
Last evening US time the euro was up .40, silver was up 5 cents, yet gold was down $1. The sell off on the bell on yesterday’s Comex close, articulated by the cabal, suggested The Gold Cartel would come out swinging today, which is just what they did thanks to another "donkey" story:
March 24 (Bloomberg) -- The euro fell against the dollar after comments from European Central Bank President Jean-Claude Trichet raised speculation the bank may lower its benchmark interest rate to spur a flagging economic recovery.
``Should our expectations for stronger private household consumption and domestic demand as a whole not be fulfilled, we would change our forecasts accordingly,'' Trichet said in an interview with Germany's Handelsblatt newspaper. A report Friday from the Ifo institute may show German business confidence fell this month, according to economists surveyed by Bloomberg News. –END-
No action by the ECB, only more rhetoric. Gold was flying. Something had to be done. However, the euro sank sharply on this talk and gold was battered as a result – to be expected after its 7 day run higher.
The shorts were going after the gap left six days ago. They came up 50 cents short. The major reason they failed is unusual. Morgan Stanley and Goldman Sachs showed up as buyers of 700 lots with gold just below $415. It stopped the sell off in its tracks. From there, gold staged a ferocious rally, almost making it back to the unchanged level, before selling off again. Still, a remarkable day for gold in many ways. In the end it closed above its opening levels. And the gold bull market actually gained momentum in foreign currency terms today. The euro gold price finished the day somewhere around 344.70, another new high for the move. To give you some idea of how impressive this is, its 15-year high is 346. In euro gold terms, gold is about to take out the equivalent of $430 in US dollar terms.
As mentioned yesterday, this is a big deal. Gold is on fire around the world in many foreign currency terms, which means it is finally gaining attention from zillions of investors who have been snoring through the dollar gold rally. I know because of the apathetic emails I have received over the past many months from Aussies, Canadians, etc.
While gold closed lower today, its comeback off the lows was extraordinary in light of the super weak action of the euro. After 7 up days, The Gold Cartel could have buried gold, especially since they came out of the box last night with the intention of doing so. It further demonstrates how many new investors want to be part of the coming gold price explosion. This is confirmed by the floor feedback this morning that many funds were waiting for the shorts to take gold down so they could buy.
The stakes were huge today in both the gold and silver pits. Tomorrow’s close is April Comex option expiry for both gold and silver. The following are the outstanding gold options;
$400 – 6300
$405 – 2000
$410 – 7500
$415 – 4700
$420 – 7,000
There are 1016 silver $7.50 options outstanding.
The gold shorts and option writer crowd are desperately trying to keep the $415 and $420 calls from being in the money. My colleagues and I suspect the Morgan Stanley and Goldman Sachs buying this morning right below $415 was to cover some of their option exposure as they saw gold not attracting the sort of selling it usually does under such market circumstances as we had today.
The gold open interest fell 43 contracts to 281,839. The silver open interest also fell, dropping 396 contracts to 119,976. The big jump in open interest on Friday was an error and has been corrected. The March fell 4 contracts to 271. And, yes, I still don’t have my silver delivery. Three trading days left.
The silver shorts used all of their trading tricks to keep silver from exploding and they didn’t work to any significant degree, at least so far. Silver was very firm going into the Comex opening. The shorts then took it down 10 cents prior to that opening and pressed from there, bringing silver down to $7.55 where it held like a rock. Gold’s rally encouraged the longs and silver stormed higher, actually going up 5 cents on the day when the shorts pressed again, taking gold back down to $7.55 where it held like a rock again. When the normal silver liquidation failed to appear, locals were forced to cover and silver drifted back up.
This kind of volatility is going to become the norm in the future. We had all better be prepared for it and get used to it.
One more thing about silver. The key to this market is the price managers are running out, or have run out, of enough physical silver to continue their scam. For a few days here and there they can affect the price. However, they have been found out. What used to work for them so well in the past is not going to cut it any more. The mega buyers want physical and they can’t deliver.
Only a matter of time before silver blows through $8.
For gold to come back like it did today and for silver to avoid a rout is a major technical development the way I see it. We have structural changes occurring in both the gold and silver markets. Most of the world is out of physical silver. The silver price managers are going to be buried. For all the reasons discussed in MIDAS recently, a hoard of new investors are flocking to gold as THE investment of choice. It is my speculation this new amount of buying will overpower The Gold Cartel in the weeks/months ahead as they are most likely unprepared for such an onslaught.
A PS on that one: Ever since MIDAS brought to your attention the STALKER was going back into action and that the Saudis were intent on gold accumulation, gold has been on a tear.
As soon as gold reopened in the Access market, Gold Cartel forces took gold down $2 and silver back to $7.55 bid, down 6 cents, in this thinly traded market in an effort to set the tone for tomorrow’s option expiry. Always the same drill nauseating drill. One of these days soon they are going to get their head handed to them. The world is changing and they are still following their age-old game plan. It is a game plan which is going to go out of fashion and do-ability for them in short order.
