Opening comments on gold with Gary Savage
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Thanks Clay,
Big Al
I’ll know precisely where the bottom for 2013 is;
ask me on Dec 31st
The trials and tribulations of newsletter writers? OK….that should be interesting Al. One of the problems Gary needs to get past though is he keeps blaming outside influences for the action in Gold and Silver. I just cannot accept that because other guys with no conspiracy bent whatsoever have been making terrific calls all the way up and all the way down again. You have several experts on your show who have been remarkable in their guidance without ever laying the blame at the feet of some superior power. How can we explain that? Why can Gary not accept that others keep calling it right without resorting to suggestions of manipulation.
There is an old expression that bad workmen always blame their tools for lack of skill.
I actually think gold has traded naturally for almost all of the bull market with the exception of right after QE4. (sure there is short term manipulation, it happens in all markets). I don’t buy into the theory that the Fed is manipulating gold. The Fed is free to print as much money as they like and have been doing just that for the last 13 years.
I’ve said all along that this manipulation was done by sovereigns in the attempt to drive physical gold from west to east. But once the trend was established it’s been significantly magnified and lengthened by funds exacerbating the trend.
Let’s face it there is nothing natural about the kind of huge selling volume that has appeared in the overnight and premarkets over and over. The size of which exceeds position size limits. What are the chances that four big traders all just happened to sell their position limit at the same exact time in the overnight market?
I would also point out that the April stop run resulted in shortages. That can’t happen in a freely traded market. Price will automatically adjust to prevent shortages from ever occurring barring some kind of general market selling climax like we saw in 2008.
I’m positive gold still has further to go. Big secular bull markets don’t end until the fundamentals change and a bubble phase occurs. We clearly haven’t had a bubble phase yet, and the fundamentals keep getting better as the currency wars are intensifying not easing.
I’m confident gold will rally out of this bottom and go on to make new highs and maybe the bubble phase, confirming that this was in fact a manufactured bear market.
BTW when has Goldman ever reveled their trades to the public? They came out with a call to short gold two days before the 1520 stops were run. I’m pretty sure they weren’t trying to make anyone money except GS. They called it just in time to add even more fuel to the fire.
Pure and simple, this was a orchestrated bear raid, that would never have happened if the market had been allowed to trade freely.
Disagree with that too, Gary. Goldman has a reputation of coming out with calls that are opposite to what subsequently happens. They are a legend to some investors as a contrary indicator so of course NOBODY believed them when the said “short gold”. They therefore could not have materially impacted markets as far as small retail investors were concerned as so many doubts persist with regard to their calls. Are you trying to suggest that maybe Goldman put out a public “short” call and then got its staff on the phone to get the message out to thousands to funds and Hedges with the message “we REALLY mean it this time!! Dump Gold”! Obviously that is preposterous. Nobody could contain a secret that big involving so many people and not get caught in a web of lies and deceit. The conspiracy narrative stinks. It is just an excuse to explain away what analysts are unable to analyze.
Interesting point Bird!
Gary: Read this top to bottom and tell us again why You don’t believe the Fed is manipulating gold.
I said at the time that I thought the manipulation had something to do with Germany wanting their gold back. I don’t know that that necessarily means the Fed is manipulating gold. I was kind of under the assumption that Germany took matters into their own hands and created the sell off to drive physical out of the ETF’s and back into the market.
So was the bear market in gold during the mid 1970’s also manufactured in your opinion? How about the subsequent crash in prices post 1981? You must appreciate that those events happened long before Ben Bernanke and the Fed were intervening in bond markets and introducing QE, Gary. How is that there can be a belief that markets were more honest back then on the one hand while simultaneously arguing that the distinct pattern similarities we are seeing now between the 70’s and 2013 validates the bull case for a dramatic rise in precious metals? Surely you have read both arguments. We can only conclude therefore that gold was also heavily manipulated 40 years ago but it was done in the absence of QE’s and without Fed intervention. Somehow the powers that be are capable of manufacturing gold prices at any time to their own satisfaction. And yet, back then we had in excess of 20% participation rates in gold and silver buying amongst retail investors versus 1% today. So markets were more actively traded and transparent then and yet they still suffered huge periodic downdrafts that exceeded 50% on two occassions. My point is that I think some people are trying to make the narrative fit the facts rather than accept the facts drive the narrative. as far as selling goes, we live in an algo driven world now. Selling begets selling and vice versa with buying. It is no surprise to me that one large party dumping metals would not trigger routines of others to replicate and magnify the trend. I do not like the conspiracy theories because they are just as useless a tool at understanding the markets as so-called fundamentals.
The bear after 81 is easy to explain. The fundamentals changed. Volcker jacked rates to 15% and started selling bonds to shrink the money supply. The secular bear market in bonds ended the economy went into recession, and inflation came to an end.
The decline in the mid 70’s was triggered by the “whip inflation now” campaign. Ultimately it failed because the Fed failed to follow through and shrink the money supply.
The fundamentals changed……but no conspiracy….right?
The really strong fundamentals were certainly not there in the 70’s and early 80’s.
Big Al
I have to agree with you Bird about conspiracy theories. The environment is the environment and folks simply have to invest within it without wasting time.
Thanks Al. We need to move on. Success is still the gift to those with open minds.
hold gold you have. I will look to buy silver or palladium in sept. Sorry to see lots of agitation on the geo. Zimmerman case. I hope geo. gets out of fla. for a few weeks so the anger dies down. two aggressive men had a fight ended up in an unplanned shooting . I am more and more convinced that in– court tv or audio, is a mistake. pray for calm and peace. S
Gold is taking too long to get above 1300 and if does not happen by Wednesday it will weaken. A move above 1300 will not confirm a bottom. It will have to get above 1350 and stay there.
One thing I think we can all agree on is that nothing changed on June 28th. Nothing has fundamentally changed for the last 8 months.
If that turns out to be the final bottom and gold resumes its secular bull market then I think we have to concede that this was an artificial bear market whether it was created by central banks or bullion banks or whatever.
Again I beg to differ. Something material and substantial has changed in the past 8 months. Sentiment has swung decidedly negative in that time frame and the effect has resulted in prices being hammered back to lows not seen in several years. The public is disgusted with gold. The media gushes that the bubble has popped and the boom is over and even in India buying has dropped in favour of silver. Something changed all right…….rates rose as bonds fell, the dollar surged, QE is being threatened with a taper, mining stocks got dumped en-masse like hot potatoes and deflation fears arose in earnest on poor news out of China and Europe. That is just the easy to find news events, Gary. Without going into details it is also notable that there has been a surge of investment in real estate and this one small detail has been enough to suck the life out of fear trades that don’t offer genuine performance.
Not sure that I agree that the public is disgusted with gold. I think that the public is confused at this point and they, certainly like me, are getting really disgusted with all the crap that the “mainstream” media is reporting.
Big Al
Sentiment is not a fundamental part of the picture. The rest of your statements here are idiotic. NOTHING HAS IMPROVED. The U.S. remains insolvent. The Fed will inflate.
Idiotic? OK…you accused me of calling you an idiot and I responded and asked on what thread did that happen. You did not respond. I know I did not say that but I would offer an apology if I did. Please don’t be an open-faced liar and then turn around and do the exact thing you accused me of, Matthew.
Try to be respectful for one time in your sorry life.
I do agree with you completely, Matthew, regarding your comment about our insolvency.
Big Al
This will happen: Gold and silver will go up parabolic to new record highs but the dollar index will stay in a close range. WHY? Because all the factors for this to happen are contained within the two PM markets. When this happens, the Fed will say these PM markets are isolated to themselves and has nothing to do with the performance of the global economy or any other markets. You watch.
Sure thing Fred. Only one small problem. Silver ALREADY went parabolic. Sorry.
Yep Bird, not to say that it won’t happen again though!
Big Al
interesting point Fred.
I guess the question is, “just when do you think they will go to record highs”?
Big Al
Al,
Noone has that crystal ball but when the Crimex and LBMA are wiped out of physical and the Singapore, Shanghai, Russian (starting around December), and Japanese Gold Exchanges wrestle the world wide gold price away from the Crimex and LBMA. Then the manipulation scheme will be over.
You could be right!
The connection between gold and dollar is Bonds. If you overlay dollar, gold and 10 y notes with technicals you will see correlations.