Gold (AMEX:GLD) closed on the Globex afternoon session Monday at $1612.45 per ounce and as of this writing is currently in backwardation on the September and October contracts. That is a condition where the future month contracts are trading at a lower price than the current month contract. volume on the August contract was heavy on Monday as well, suggesting an incredibly tight physical market which is putting the shorts in a bit of a bind. It would not surprise me at all to see Gold push well past the $1650 area this month.
The Fed has begun repo operations for the first time in 4 years. Money printing is money printing, people. It does not matter if the Fed calls it QE or not. Repos are money creation. The Fed has conducted 22 reverse-repo operations in the past 4 years since Lehman Bros. collapsed. With the erroneous and debunked report from the Financial Times on Monday saying that the CFTC was closing its 4 year investigation into silver (AMEX:SLV) was to be closed without and tangible findings (complete nonsense of course, but Goldman guys protect their own) it is becoming clear that those in control are attempting to do everything in their power to jawbone the markets in the direction they want right up until the moment occurs when the system collapses.
What’s sad at this point is that most people involved in the markets would absolutely raise a hearty cheer on their way to grabbing their guns and riding out the massive political upheaval that would ensue. Gold is the canary in the monetary coal mine and that bird died years ago. But, there seems to be an endless supply of people willing to report that, like the shop owner in the Monty Python sketch, it is in fact still just resting.
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