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Gold and Silver Short Squeeze

Stock-Markets / Stock Markets 2014 Nov 08, 2014 - 06:27 PM GMT

By: Jesse


"Oh what a tangled web we weave,

When first we practise to deceive!"

Walter Scott, Marmion, Canto vi, Stanza 17

Watching the trade in gold and silver last night was interesting.

Around midnight gold was smacked down seven dollars to about $1132 in the matter of a few seconds. That is customary since traders have to reset their stops after midnight, and there was a bit of the usual inexplicable 'gamesmanship' one sees in bucket shops, rigged card games, and for some reason the Comex.

But about an hour later the price rebounded back up sharply to the 1144 area and seemed to stick there for most of the trade, with a slight upward bias, until the US announced its Non-Farm Payrolls Report for October, which sucked out loud.

There is no recovery. And as that fantasy wavered, so did the dollar and both gold and silver traded higher throughout the day, as the spec who came for the usual NFP Day smackdown ate their shorts.

So what next. Gold and silver are still in bear markets. This is counterintuitive of course since in the case of gold especially there is a yawning mismatch between actually supply and real demand.

I took a look at the Sprott Physical Gold Trust and there it was, another redemption. I have not yet looked but I suspect we will see more sizable redemptions from the ETFs.

I have offerend some intraday commentary that may shed some light on this phenomenon. I encourage you to read it here.

That there is manipulation in the gold market is, in my mind and in accordance with the evidence at hand, strictly a rhetorical question now, argued by the bully boys and shills of the Banks, and those pit crawlers of the financial demimonde.

That is not to say that 'it is over.' These things never end when you think they will end, but when the end comes, it tends to come with a vengeance. So I don't think we will even have to ask the question when the answer is there.

A good start would be for gold and silver to break these awful, grinding short sales and bear raids lower, and that means breaking the pattern of lower highs and lower lows. That means taking out $1270 gold and sticking it to the bears, hard.

For now this is a big bounce off a grossly oversold condition. So it is too soon to break out the balloons. Even if you are a legend of the legendary legends. Mere mortals must wait for a more solid confirmation of a sustained change in trend. The powers that be never give up any shred of power easily, and that is what we are seeing: a shifting landscape of historic proportions.

Have a pleasant weekend.

By Jesse

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Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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