These premiums [the ex-duty import prices being paid for
legal kilo bar imports in India] are actually quite remarkable as the
need to import kilo bars only arises if Indian demand is not satisfied
by Dore imports (which had a duty advantage of $15.52/oz this afternoon)
and smuggled gold. Reports of apprehensions at Indian airports are
continuing to appear, indicating that smuggling has in fact revived.
– excerpt from John Brimelow’s Gold Jottings Report (contact John at email@example.com to learn more about his service)
The price of gold & silver have had a big move since
mid-December, despite the flood of “fake news” connected to the
temporary disruption of gold imports into India precipitated by Modi’s
now-failed attempt to limit the ability of Indians to buy physical gold
and despite the plethora of fake news about the quantity of gold flowing
into China both before and after after the week-long Chinese New Year
Brimelow goes on to assert in one of his Monday updates that, “Viewed
from a US-centric and technical perspective, gold’s friends have
something to worry about. However
the Asian buying is about as strong as it ever usually gets
and for that reason the Bears’ prospects are probably limited.” Note,
the “technical perspective” indirectly references that use of paper gold
by the western bullion banks in their attempt to control the global
price of gold.
As an example of the price-control mechanism implemented in the
western paper market, you’ll note that after a surprise bounce in gold
on Friday, likely stimulated by paper short-covering on the Comex, was
met with an attack after the Monday a.m. LBMA gold price “fix” and again
right after the Comex floor paper gold trading commences:
These are typical times during the day, when the physical gold buying
markets in the east are closed for the day and the western paper market
manipulators take control of global gold trading via LMBA forwards and
and OTC derivatives.
Just as notable about Friday’s move higher in gold during NY trading
hours is that fact that the price was moving in correlation with a move
higher in both the dollar index and the U.S. stock market. Often, there
is an inverse correlation between gold and the USDX/Dow/SPX.
There’s is an “invisible hand” in the market pushing the prices of
gold and silver higher in defiance of the attempted price control
schemes being exerted in London and New York. This silent operator is
without the pressure being exerted in the physical market.
This week I’m sure will prove to be a bit of a price roller-coaster,
as the semi-annual “Humphrey-Hawkins” (as it used to be called) Fed
Chairman testimony on monetary policy and the economy is a time used by
the western CB’s and bullion banks to control the price of gold using
paper. After all, they can’t have the price of gold moving higher when
the Fed’s El Hefe is extolling the virtues of the fiat currency and
fractional banking system in front of Congress and the world, which
The point here is that it’s my view that the next longer term trend
move in gold is higher, which means that price attacks should be used as
buying opportunities, both for the metal and the mining shares. In
fact, the mining shares were quite stubborn about going lower when gold
was being hit hard in New York after being hit hard in London.
Typically this is a signal to the market that prices in the precious
metals sector are going higher.
Dave Kranzler spent many years working in various Wall Street jobs. After business school, he traded junk bonds for a large bank. He has an MBA from the University of Chicago, with a concentration in accounting and finance, and graduated Oberlin College with majors in Economics and English. Dave has nearly thirty years of experience in studying, researching, analyzing and investing in the financial markets. Currently he co-manages a precious metals and mining stock investment fund in Denver and publishes the Mining Stock and Short Seller Journals. Contact Dave at firstname.lastname@example.org.
The author is not affiliated with, endorsed or sponsored by Sprott Money Ltd. The views and opinions expressed in this material are those of the author or guest speaker, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.