The Lunar New Year celebration closed stores/markets throughout China, Hong Kong, Singapore, Thailand, S. Korea and elsewhere in the Far East, last week. That presented an opportunity to torpedo prices and trigger the stop loss orders of get-rich-quick dreaming paper-gold buyers. In addition, Indian buyers continue to wait for a big reduction in import tariffs. Part of the Indian government is recommending a reduction from 10% to 2%. This is expected toward the end of February. Accordingly, most Indian buyers hesitate to take delivery ahead of that big tax break.
Last week's action in precious metals looks like a last-ditch effort by the banksters to close paper short positions. This might be their last chance to do it. Without the factors noted above working in their favor, artificially low prices such as those that now prevail, might otherwise trigger a deluge of physical gold buying. The gold bankers probably couldn't handle that without the help of physical gold from the gold lending windows of the Federal Reserve via the Bank of England.
In any case, the Lunar New Year's break will end on February 23rd and 24th, depending on the nation involved. When Far Eastern markets and stores open again, the dramatic lowering of Indian gold tariffs should kick off a new season of intense gold buying, unless prices rise significantly from here. It is also worthy to note that the ECB's version of QE money printing is scheduled to begin in March.Euro QE should put around €260 billion worth of fleeing money into the marketplace.
Most unwanted Euros previously flowed into Swiss francs, Danish krone and various other fiat currency denominated assets. However, in the wake of negative interest rates in those nations, much of it will be looking for a new home. Part of it will wander into fiat dollar denominated assets, and another part will find its way into gold, silver and platinum. Swiss franc buyers, of course, have always had the opportunity to buy dollars, but refused to do so in the past. It can be assumed, based upon this, that a rather large percentage will flow into gold.
In any case, with these momentous events coming soon, the relatively tiny precious metals markets should start moving up very soon, and this trajectory should continue into 2015. It is no wonder the banksters did everything they could, last week, to induce forced selling by triggering stop-loss and margin call selling. To jettison short positions at favorable prices, they must first shell-shock the market. Only after a shock and awe campaign is it possible to calmly liquidate into chaos among the get-rich-quick oriented highly leveraged paper gold buyers.