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The week was
dominated by strong markets and stocks but the main focus was the huge gold
and silver smashing which was obviously a successful attempt to take prices
down. It was manipulation plain and simple.
Whether
the SEC looks into this or not remains to be seen but it would not take them
more than 5 minutes to prove this was a manipulation effort. The problem is
that it was their bosses who did it!
Nothing
will come of this and the gold and silver bull markets are strongly intact
with this latest effort only affecting traders, including our recent trading
positions in gold and silver. It happens I suppose, but it was theft.
Someone
literally came and took money from our trading account within the blink of an
eye.
It
was theft plain and simple but it’s ok because our physical positions
profits are far outweighing these small little crumbs the scumbags took from
us this past week.
As a trader I’m pretty peeved with
the blatant theft, but as a precious metals accumulator it’s just a
gift.
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Metals review
Gold
only fell 3.51% this past week but Wednesday was one to put in the history
books.
I’ve
rarely ever seen anything drop so fast and violently before. Gold was down
$40 then nearly $100 in only a few short minutes. While I’m very happy
and content with my physical gold and silver holdings I’ve voiced my
opinions on trading gold and silver before and those opinions aren’t
great.
I
do fall into the GATA camp in as far as I believe gold is a manipulated
market to a degree. I don’t think it’s manipulated daily and the
goal is only to slow the ascent of gold as there is no way to stop it’s ascent.
Wednesday
was manipulation plain and simple. With some 31 tonnes of gold coming onto the market to be sold in
minutes there was no way that gold could repel the assault.
Not
a single person I or traders I know or have ever known would sell their
position in such a manner. The goal is to maximize profit so when you have a
large position you let some go into strength gradually as to not disrupt the
market. It makes no sense, or in this case dollars, to dump a huge position
in a market that you know cannot handle it unless you are trying to move the
market lower.
Every
single person who watches and trades markets knew that gold was breaking out
and that the pattern it just broke was pointing to much higher prices so a large
seller would be foolish to sell at the start of the move that was likely to
take gold above $2,000 within three months.
Gold
was manipulated and that’s a fact.
Holding
the metal itself though, I could care less, but when trading it’s a
real pain and we did incur losses as a result. Maybe one day a class action
suit will be brought but against who specifically
it’s hard to prove at the moment.
Now
gold is damaged on the chart quite bad and we will see what the new week
brings. Chances are pretty good that we can climb back into the breakout area
but we won’t have the same amount of traders pushing it higher unless
we can build another nice pattern from which to move up from and that takes
time.
Also
many traders were burned pretty hard on Wednesday and will think twice about
trading gold again when you can make better money trading leading high-beta
stocks who move so much more predictably.
If
there is an good news to take away from this last
week it’s that gold did hold above the 100 day moving average.
Both
the GLD ETF and futures markets saw insane volume Wednesday as the initial
huge sell order sparked stop loss order and sparked algorithm trades into
action which exacerbated the move all the way to the 10 day moving average.
They
won this battle but they are not winning the war as they are retreating
strategically.
Silver
only slid 1.35% on the week surprisingly but followed gold down hard
Wednesday. We did see our profits evaporate for the most part quickly
Wednesday but since we bought at the exact proper breakout level we ended the
day still up pretty nicely.
Silver
held the key $34 level which was a breakout area and now is home to a solid
uptrend line.
Volume
was heavy on Wednesday as would be expected in both the SLV ETF and the
silver futures market. This, after superb volume on the breakout higher in
both markets early on in the week before the planned takedown.
Platinum
dropped 1.19% this past week as a result of the gold takedown. It’s not
looking bad at all though and actually looks very bullish here.
Platinum
is holding the 200 day moving average well and forming a bull flag pattern
which should soon lead to a breakout as we move towards the $1,800 level.
I
like platinum and palladium much better than gold and silver at times since
they aren’t hit as hard by the powers that be, although they do at
times move in the same direction, the volatility is
generally much more manageable.
Volume
in both the ETF and futures market saw huge volume Wednesday which kind of
threw a wrench in the spokes for the rest of the week.
The
next buy point would be breakout of this flag around $1,700 on increasing
volume.
Palladium rose
0.26% this past week in stark contrast to the other precious metals. Palladium
has a little reverse head and shoulders pattern here now and should be ready
to break higher out of this week.
Palladium
is holding the 21 day and 200 day moving averages nicely here as the 200 is
about to turn up once again.
Palladium
would be a great buy on a break above $735 with strong volume.
Futures
volume was heavy until the end of the week while the ETF volume was actually
quite light all week but did have a little spike mid-week.
I’m
very impressed with the action in palladium here now and it should be the
most stable one in 2012 by the looks of things early on but because of that
it likely won’t be the one with the highest returns, I think silver
will take that title in 2012.
Fundamental Review
Warren
Buffet once again this past week reiterated his disdain for gold. He says
gold is a speculation, not an investment. He is far smarter than that and
actually owned a huge amount of physical silver near the beginning of the
decade but that is another story altogether which ended up seeing his silver
being sold for a nice profit to fund the new SLV ETF at the time it opened,
but that is still unconfirmed but the only possible explanation.
Warren
owns a huge insurance agency and knows full well about the devaluation of
paper currencies including the US Dollar. If anyone should understand that
physical gold is a form of insurance against paper currency devaluation
it’s Warren.
In
recent years it’s become more and more obvious that Warren Buffet has
become a shill for the government and big corporations and he is just trying
to talk gold down for the powers that be who do not want gold to soar.
That’s it, plain and simple.
Ignore
Mr. Buffet when he talks about gold
While
the gold smash-down was blamed on Ben Bernanke squashing hopes of further QE,
earlier in the day the ECB injected €530 billion into the banking system.
The US does not dictate what gold does, it’s a worldwide market and the
facts are that massive QE is still going on.
It’s
all smoke and mirrors and double-talk. From my perch, the fundamentals for
gold and silver are well intact. Currencies are still being debased and
governments still have a massive debt and spending problem.
Until
that is solved I’ll be a heavy precious metals bull and think everyone
else should be too.
Iran
says they have no issue accepting gold as a means of payment to
avoid the stringent sanction being imposed on them for their oil or other
goods. What else can we expect them to do? They need and want to sell their
goods and they will do whatever it takes to do so. It just so happens that gold is a much better swap than paper
currencies or even more likely computer entries.
We
only saw one bank fail this past week, late on Friday
evening as usual.
The
large and rich Las Cristinas gold mine in Venezuela
is now said to be developed jointly with a Chinese company.
The mine has a storied history including supposed curses and it has been for
any company trying to work on it to date as the small Canadian company who
developed the project saw Venezuela nationalize the mine after all the hard
work had been done and before mining began.
Here
is a fun video where Ron Paul has his way with Ben Bernanke. Ron
makes some great points regarding the debasement of currencies over the years
and makes a great case for physical gold and silver as a result.
In
my opinion the biggest joke in the auto industry is the Volt and now it
appears I’m not the only one as the company has to halt production for five full weeks
as a result of lack of demand leading to an oversupply issue.
Don’t
worry about your gold and silver, they are fine and in fact on sale so do
what I do during big flash sales...BUY!
Have
a great weekend and week ahead, and thank you so much for reading. Things can
only get better from here!
Warren Bevan
www.preciousmetalstockreview.com
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