One of the lessons that gold bugs are learning, in the most painful way possible,
is that you can't trade a manipulated market. When big players with regulatory
immunity can move an asset's price -- and can see resistance/support levels
and moving averages just as clearly as anyone else -- smaller traders don't
stand a chance.
In the gold-is-manipulated script, governments and their bullion bank proxies
push the price to levels where they know hedge funds and other traders have
stop-loss orders, which kick in and send the price careening lower. Then the
manipulators buy back their short positions, thus gaining a two-fer: fleecing
the flock for a nice profit, and crushing the spirits of stackers and preppers
and regular folks who value honest money.
Which brings us to the following article, published by a major bullion dealer:
Golden Bull & Price Pullback Gift
Rarely in bull markets do we see opportunities like the one being presented
to silver and gold investors right now.
Silver & Gold spot prices are now retesting their recent low price points.
Current and favorable bull market fundamentals have not changed.
Below is a longterm view of gold's bull market valuation channel over the
past 15 years:
We view this current price pullback as a buying gift for
gold and silver investors.
Now, for chartist in a normal market this picture would indeed imply a nice
trade setup. But bullion bank traders can see this channel too, and for them
it's a bullseye. Just push gold through the bottom of the channel and a whole
world of technicians who for some reason think their charts still have meaning
will see that the up-channel has been broken, and, like good, dispassionate
traders who cut their losses when they're wrong, will sell their futures contracts,
their GLD shares, and maybe their mining stocks, tacking yet another vertical
drop onto this correction.
This might not happen, but if it doesn't it will be because the bullion banks
have had their fun and are now on
the other side of the trade. But make no mistake, it's their decision;
in the short run this is their game.
Longer term, of course, is a very different story. Fundamentals always win
eventually, and with the whole world on a borrow/print/lie-about-it binge,
gold's fundamentals just keep getting better. Excessive debt leads to currency
war leads to soaring gold. And when the paper players are finally overrun by
physical demand, the people who have been quietly accumulating bullion and
high-quality mining stocks will barely remember this month's drama.