Gold Continues to be Compressed Near $1640

Not content to push gold prices back from $1680 per ounce the monkeys of the Federal Reserve continue to play games intra-day to push the price down; continuing to try and shout to the heavens that everything is fine, no really. We are in control of everything.  Meanwhile, most humans have left the markets.  For gods know how many times in the past two weeks Gold bounced off the $1638 level and refused to give way as the bulls dug in and said, “No mas.”

But, tomorrow the monkeys will be back with more liquidity freshly created by the Fed to attack the price again.  With options expiry in the stocks coming up on Friday for the shares and a Spanish Bond auction tomorrow it is an imperative that expectations be managed down so that the price, when it snaps higher will still be in the range decided upon by our masters.

Gold closed on the Globex at $1642.15 per ounce on Wednesday while the yield on U.S. Treasuries continues to drop, closing today at 3.126%.  Capital is absolutely scared of where the situation in Spain is going but somehow people are seriously selling gold to buy U.S. Treasuries.

Again, I want you to pull my other leg, this time it plays Auld Lang Syne.

The Chinese are importing gold through Hong Kong at the unprecedented rate of 480 tons per year, and that does not include March’s data yet.  They are literally salivating every time the Fed is stupid enough to create these downdrafts in gold.

And yet, they continue.  And yes, bond traders continue to position themselves for higher inflation, not lower.  And still the gold suppression game marches on.

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Tom Luongo

About Tom Luongo

Tom Luongo is a professional chemist and self-taught economist who has been following and trading stocks for nearly 12 years. He has no formal ties to the financial industry and considers that an asset in his analysis of the interplay between monetary policy and capital markets.

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