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Gold And Silver - Comex Prices Manipulated? Still 'Accurate'

Commodities / Gold and Silver 2013 Apr 06, 2013 - 06:40 PM GMT

By: Michael_Noonan

Commodities

Charts do not lie. There are a slew of highly respected PMs "gurus" with extensive followings. None we know of have been on target in the past year. Not only are the trends still down, prices made new recent lows, again, within the trading range, but nowhere near the "prices will reach levels you cannot believe" area. [Insert your own expectation/belief]

We have been advocating the purchase of physical gold and silver, consistently and at any price. The point is not to "make money," but to preserve and/or create wealth.


The purpose in buying, and personally holding, physical PMs is viewed much like that of essential needs, like shelter, as an example. You buy a house to satisfy a need for shelter. Timing is not the most critical factor because it is the security and comfort of ownership that matters most. Once that need is taken care of, it becomes less important if the value declines because it is a necessity, not something that is traded like baseball cards.

There will come a time, and based on current charts no one knows when, that prices for PMs will become prohibitive and/or governments will do what they can to inhibit [steal] ownership, maybe even making it criminal to own or use in transactions.

It does not matter if the markets are manipulated and kept artificially low. The one thing that is certain is, prices are low! Comex and London are currently the only measures for price in gold and silver. Does it matter that there is a higher premium for larger purchases from nations, like Russia, China, and India paying closer to $2,000 the ounce for gold? No. Those countries are buying by the tonne and unable to buy large quantities for less. Their purchases may be a more accurate reflection for the "real" price of gold, and if that were true, you are looking at discounted prices, "blue plate specials."

For the man or woman on the street, as it were, it may be harder to get delivery of 1,000 oz bars of silver, or 100 oz bars of gold, but they can be had. The fact that there are delays in the relatively smaller quantities is a sign that one had better "get" while the getting is good. Smaller purchases of rolls or individual coins are okay, but premiums are increasing, and there have been a few spotty problems on availability.

As to the futures, we have been guarded throughout, making some profitable trades and some unprofitable ones, but not with any degree of risk exposure because the trends have been down. Along with recommending to buy the physical, we have also been consistent in not recommending the buying of futures.

The gurus may make for interesting reading with piles and piles of statistics. Western countries are creating infinite amounts of fiat in desperate attempts to cover their lies and confiscation of wealth via inflation, [the insidious hidden results increased fiat creates, the transfer of wealth to governments which is far worse than the outright theft as occurred in Cyprus]. All these compiled "fundamentals" are known factors by everyone. If they are true, and no sane person believes they are not, then why aren't gold and silver trading at much higher prices? Why are gold and silver back to trading range lows?

The fiat creators, the manipulators control price. If that were not true, PMs would be a lot higher in price just on an inflation-adjusted basis alone! Almost everyone, outside of the "insiders," is and has been under-estimating the staying power of those in power. They will not give up control. They will resort to any means [now shockingly] possible.

If you still think your money is safe in any bank, well, we cannot think of anything to say. Enjoy whatever returns your money may be getting, but just do not be surprised of not getting your money returned, at all. What current world financial news is proving beyond a doubt is, "Anything can happen," and what happens will not be good.

One more time! Buy physical gold and silver, as best you can, and hold it personally, [and obviously responsibly].

Here is another look at the "manipulated charts," [we do not know of a better source], to see how developing market activity is "developing," under the circumstances. With "guru" estimates very high, and prices currently relatively low, the charts remain the most reliable barometer, for obviously, they do not lie, whatever may be the lies behind them.

No conclusion drawn about the current trading month for it has just begun, and no one knows how/where it will end. The chart comments need not be repeated, but the labored decline since the last swing high is a message from the market...just not fully played out.

The primary trend remains up, but its current correction keeps price range-bound, net a positive trend sign.

It is almost impossible not to have "sentiments" for much higher prices, giving the messy financial circumstances created by Western governments, and almost entirely by those who are unelected "officials" calling all the shots. We say this because of our ultimately bullish bias for the PMs, yet maintaining a respectfully pragmatic approach to the futures.

The lack of buyer ability to get anywhere near the upper channel line, arrow 2, is a sign of weakness. While price is back near the lows of the TR, we continue to look for positive signs of a turnaround, even though none have been confirmed.

The failed probe lower could be a potential turning point. Stress is place on the adjective "potential," for until it is confirmed it remains only that, and odds are against it, until it gets confirmed. This is more reading developing market activity, as it currently stands, for it could change for the worse, next week, but we like where this otherwise bullish pattern is occurring, at an area of support. There are zero indications to act upon it, but it does bear watching as potential support.

Here is a closer "read" of developing market activity. The trend is down, and the bearish spacing is just that, bearish. The three points made on the chart are indisputable facts. You can have a contrary opinion, but opinions are not facts, no matter how strongly held.

The "observations" are facts, but their implications are more of an opinion, however "reasoned"

One cannot help but note that the last bar on the chart just erased two strong decline days. What happened to the sellers? They are in charge in a down trend. This kind of activity is contrary to sellers being in control. In fact, at least this part, buyers were able to overcome the seller's efforts based on the wider of the last 3 bars being a rally with a strong close, erasing the higher volume effort from the previous two days of selling.

In actuality, those two "sell" days could well be smart money buying, in the form of short- covering, as weak longs bailed out at the recent new lows, which is why Friday showed an "easier" time rallying. This is not sufficient reason for trading from the long side in the futures markets, but just an indication from which to be alert.

Buying against the trend, and at new recent lows, is poor decision-making, with no edge.

While no conclusion can be drawn from the monthly chart, the level of volume at this early stage draws attention. Increased volume is a sign of increased effort from both buyers and sellers. Markets have a high-degree of logic to them, and logic tells us that the volume effort, while equal, favors buyers who are demonstrating an ability to keep sellers from driving price lower at an area in trend when it is to their advantage.

We keep saying buying, but the form of buying is likely short-covering and not new net long buyers entering. It may develop that way, but that kind of development takes time to turn a market around.

There are similar facts on the silver chart, as was discussed in gold. The volume activity of the last three bars is also similar. The caveat for silver, [not mentioned for gold, but to a lesser extent is also applicable], is the 4th bar from the end. It is a wide-range lower bar with a weak close, and it resulted in a break lower out of the trading range. The equivalent bar in gold was still within the TR.

In both instances, that 4th bar showing EDM, [Ease of Downward Movement], will act as resistance on rally attempts. Watch how far price can rally, [or not] into it to get a read on whether silver will see more rally attempts, moving forward. As a rule, one should never buy the first rally from a low area. There are no reason to buy futures, yet.


By Michael Noonan

http://edgetraderplus.com

Michael Noonan, mn@edgetraderplus.com, is a Chicago-based trader with over 30 years in the business. His sole approach to analysis is derived from developing market pattern behavior, found in the form of Price, Volume, and Time, and it is generated from the best source possible, the market itself.

© 2013 Copyright Michael Noonan - All Rights Reserved 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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