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  • Was The Feb 29th Gold Sell-Off A Government Intervention? [View article]
    This has brought on many comments. It appears that the “powers that be” have gotten their way, at least for the short term. At last glance gold is down to $1668 and silver is down to $32.55. The comments brought up some very interesting points. The cash injection from the ECB was occurring during Bernanke’s speech and that is an inflationary action as well.

    The timing of a massive sell order and the aggressiveness of the selling smelled rotten to me. The stars all seemed to line up on February 29th. 15,000 lots of gold is a mighty big order. I continue to believe that the execution of that order in one minute is not the norm for the gold market. When selling $2.5+ billion worth of gold the seller generally would use a bit more finesse. In any case the selling had the desired consequences. Gold is currently more than $120 lower than it was during the morning of February 29th and silver is $5 lower. The February 29th selling triggered long liquidation. Open interest has dropped in both gold and silver futures. The weaker longs have gotten out of the market.

    As far as being a committed gold and silver bull is concerned, massive deficits and governments going broke leads to my commitment. Over centuries gold and silver have been hard money and they continue to be hard money. Just ask the governments that hold gold as a reserve asset. -Last year governments bought 450 tons of the yellow metalabout 20% of all of the gold produced in 2011 (http://bit.ly/xZmgpG). I guess the fear is that runaway precious metals prices will just put a spotlight on how badly the governments are managing their finances. Perhaps that is why the market was stopped dead in its’ tracks last week. I continue to believe that gold and silver prices will make new highs because the US and Europe still have a lot of economic fires blazing!
    Mar 6 01:25 PM | 6 Likes Like |Link to Comment
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