Saturday 27 July 2013
Our clarion call is for the physical market to soon takeover the actual
price for buying and selling. When, we do not know? Timing is now
less critical than actual possession, from this point forward.
The probability of a new low, in futures, may be 50-50. It was much
higher a month ago. The odds of successfully picking a bottom are
remote. Not to pick on Richard Dennis, but he is a poster boy for
losing big time when he tried to pick a bottom in sugar, to the extent
of decimating one or a few of his funds. How hard could it have been
to lose so much money buying sugar when it was under 5 cents, at the time?
The point is, never think you know more about the market than the
market itself. It is for that reason we always say to follow the
market's lead. Too many try to get ahead of it, speculating that it will
catch up to one's brilliant "market timing." Margin departments are
usually the first ones to let the ego-driven speculators know that their [questionable] prescience has gotten a little more expensive, in the
The odds of being able to buy physical gold and silver, at current
levels, diminish with each passing month. In terms of pricing for buying physical precious metals, [PMs], we are more than likely looking at the
lows. The timing for buying and holding as much gold and silver as you can will not be much better than at current prices for a few generations. If anyone wants to pick a bottom in physical gold and
silver, the odds are against them.
If silver were to go to $140 the ounce, will it matter if you paid $20 or
$24? Same for gold.
Here is how we see it.
If there is one law that is not on any known government's books, but
one which none of them can avoid, it is Newton's Third Law of Motion:
To every action there is always an equal and opposite reaction. All
government, Keynesian, and central planner idiots abuse this law
profusely, and at the expense of the masses, throughout history.
Every once and awhile, it catches up to them, and we stand fortunate enough to be the beneficiaries for decades suppressed prices.
Decades, we say, and not just since the 2011 highs. The New World
Order, [NWO] has had marching orders for their central bankers to
keep gold prices low, especially since the United States was placed
into their receivership hands by Socialist Franklin Delano Roosevelt,
in 1933. Price has been steadily rising, ever since, with a few upside
bursts that the NWO has tried to contain. That is about to come to
The fiat game has run its course. [We covered the ruse of Federal
Reserve Notes, [FRNS], in last week's commentary, [See When
Precious Metals Bottom Is Irrelevant To Your Financial Health, click on
http://bit.ly/12Uz4Q6, if you missed it.] We also said there is no
evidence of a change in trend. That was last week. This week is
JP Morgan has been the recognized culprit for suppressing the paper
market by naked shorting by the tens of thousands of contracts. It
does not matter if others were acting in concert, the intervention was
intentional: Scare everyone out of the gold and silver market. It
worked, in a small part, pretty much destroying the futures market,
and it failed on a grand scale by attracting world-wide pent-up
demand for bargain prices of the physical metals. Unprecedented
The natural law of supply and demand has been unnaturally distorted,
and the fiat buzzards are about to have their paper asses handed back to them, with their heads still up there. The final push to keep PM
prices artificially low has created such a tightly coiled spring that once the pressure lets up, or is forced up, the reaction is going to push
gold and silver to levels unknown that will be equal and opposite to the misplaced energy spent keeping them down.
Equal and opposite in reaction. No one can be certain how high that
reaction will be, but when measured for how long gold and silver have
been artificially suppressed, it is highly doubtful anyone holding gold
and silver will be disappointed.
Leave to central planners to convert the Law Of Supply and Demand
to Unintended Consequences, once Newton's Third Law Of Motion
takes its course. The economy has been eviscerated by central bank
fiat debt and Wall Street greed, all enabled and protected by the
NWO's corporate federal government. In all likelihood, things will
worsen during this cleansing process, for those in power will hang on
to the bitter end.
Let no one ever forget that the Fed, a privately held corporation NOT
under US control, [but in total control of the US], was modeled after
the Weimar banking system. The Weimar banking system was
designed for one purpose and one purpose only, to enrich the
bankers at the expense and destruction of the German economy.
The Weimar banking system was imported to this country in 1913,
when the Federal Reserve Act, a mirror of the Weimar banking system,
was passed. The privately owned federal reserve was established for
one purpose and one purpose only, to enrich its owners at the expense of the US economy. "Mission accomplished," as Bush the inept Jr
None of this matters, any more. Either you see the handwriting on the wall or you do not. Can there be yet one more push to the downside in PMs? Yes. Will there be? The odds of that suicidal banker event
diminish with each passing day. Do not play Russian roulette with the
timing of your purchases, anymore. In fact, the Russians, [and the
Chinese, and the Indians, and the Turks, and the Arabs] have been
the willing beneficiaries of this blatantly stupid move by Western
central bankers to scare people away from owning precious metals.
As far as the futures and their artificial prices are concerned, the bear
market is starting tofray around the edges. For the first time in
months, we opted to go long gold in futures. It may be just a short-
term trade, but the signal to buy was clear. An update of the charts:
We have been aware of, but have not commented on the potential
support from the level indicated by points 1, 2, and 3. Futures have
not signaled a definitive bottom, but we are of the solid belief that the physical market may soon become the more accurate pricing
There is one trading scheme that calls for a buy and hold whenever
price rallies and closes at the highest level in a four-week period. That
is a mechanical process, but one for which we have some degree of
respect within the context of developing market activity.
It is no accident that gold was able to rally as strongly as it did and
have that rally fall in line with the 4 week higher close scheme. It is
something we will continue to watch.
We gave advance warning of the upside potential, given confirmation,
in our commentary, Purely A Mental Game Right Now. Do Not Blink,
click on http://bit.ly/14fT8R0, second chart, at the end of June.
Last week's call for buyers absorbing the effort of sellers, just under
1300, was spot on. Once price rallied above that area, it did so on
strength not seen for some time in the gold market. We recommended
buying, as stated in the chart comments.
It is possible that another level of absorption may be forming, in the
second box. Price activity will confirm or negate that, possibly next
The argument for silver is not as compelling, chartwise, as explained.
It looked like silver was signaling earlier than gold, in the past month,
and note was made of its high volume, strong close, at the end of
June, similar to gold, http://bit.ly/14fT8R0, fourth chart, making several observations about it.
Will gold pull silver up, or will silver act as a drag on the current rally in gold? Each has to be viewed separately for decision-making
purposes. Right now gold is favored, and it would be a mistake to buy
silver over gold in the hopes it will catch up. Buy silver futures when
developing market activity signals a buy, as occurred in gold.
The window of opportunity to buy physical gold and silver continues to narrow. Like the housing market top was known to be coming, when it came, those who waited too long regretted it. When the bottom for
the physical PMs is known as a certainty, those who waited for a
"better price" may also regret that decision. It is all about choice.
We choose now for buying and holding physical gold and silver. We
are on the long side in gold futures, but that can change on any given