"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


Friday, January 17, 2014

J P Morgan - "Bottom may be in for Gold"

Three Morgan analysts were reported today as issuing some research which essentially is calling for a bottom in the gold market. That is what Dow Jones is reporting from Barron's Blog.

They were especially upbeat on some S. African miners, most notably Harmony and Sibanye. They were downright negative on Randgold and not at all enamored with Anglo.

Regardless, the report was enough to have investors chasing gold mining shares today as well as putting a bid back into gold over at the Comex. It did seem to me that as the session wore on and as news about the call became more widespread, gold continued to move higher. Nothing like a big name bank to give traders/investors their convictions....

You do have to ask why JP Morgan has been loading up on all that gold when it comes to the Comex delivery process. Hey, nothing like acquiring lots of the metal and then letting your analysts give the market a bullish call which essentially guarantees that the price is going to rise and you are going to secure some excellent profits.

It will be interesting to see how the "gold is always manipulated all the time" guys and gals are going to deal with this. AS I have been saying, the big bank(s) have been buying gold - why would they be interested in capping it now that they have amassed so much of it? They have been buying from the hedge funds who were dumping it. That is an incontrovertible fact.

From a technical analysis perspective, gold's ability to hold support down near $1,220 - $1,224 was very constructive. It is now challenging firm overhead resistance. Note that it has moved decidedly above the 50 day moving average which is also constructive but more importantly, look at the DMI lines ( Directional Movement Indicators). The +DMI or Positive Directional Movement Indicator has now touched the -DMI or Negative Directional Movement Indicator Line for the first time since October of last year. What this means is that the bulls are very close to gaining control of this market, if they have not done so already. I personally want to see the price push through $1260 on the topside at a bare minimum to confirm that the near term trend has changed.


  1. the world is a bigger place than the banks in the US...German regulators finger Deutsche Bank...Deutsche Bank exits gold price fixing



    1. A major crack in the mask reveals itself.

    2. Mad Max;

      When the German authorities prove that Deutsche Bank was also DOWNWARDLY manipulating the price of all those commodities which make up the various commodity indices out there, then you will have a convert here. Until then, this has nothing to do with the price of gold unless of course you are willing to boldly proclaim that DB is the culprit behind the fall in the price of corn and wheat and sugar and coffee and gasoline, and on and on and on. Take a look at the GSCI, an index which I regularly post here to try to teach folks how to READ SENTIMENT in regards to the broader key markets - it has been steadily falling for some time now. Why would gold be moving higher if the general price of commodities has been moving lower over that same period , especially over the last year? Gold was moving lower because WEstern investors did not want to own it and tie up precious investment capital in a NON PERFORMING asset, not while there was so much money to made in Equities!

    3. What about fundamentals, are all the other experts wrong in citing unprecedented demand for physical, unprecedented decline in inventories, unprecedented looting of allocated gold accounts and GLD by the BBs, unprecedented lawsuits against banksters for literally stealing their gold, Germany not being able to get its gold back and then gets a tiny portion in newly minted bars, not the ones deposited, unprecedented move of gold east by the thousand of tons not reported anywhere but leaving vaults in the west, unprecedented moves to curb gold demand in India at the blackmail behest of the USG/Fed no doubt, unprecedented comments by former high ranking USG officials deriding the overt manipulations by the Fed/ESF, unprecedented meetings of 15 highest ranking WS thugs at the WH just hours before the most overt and in your face smash commenced just when the BBs were about to default on their gold commitments due to their own unprecedented criminality, unprecedented overt smashes with unprecedented tonnages of gold and silver that anyone can see from the highs of $1,920/$49 all the way down?

      On the logic of statistical probability one has to conclude that the markets ARE rigged/suppressed/controlled 24/7 with HFT circle jerks and the regular smashes as evidenced by everyone with two eyes and not blinded by naivety, ignorance or MSM brainwashing!

      There is no doubt that TPTB have been smashing/suppressing prices to cover their own criminality, ‘recapitalize’ themselves, saver their arses so they can live another day of criminality, all with the highest blessing and the connivance of the ‘regulators’.

      The system is rotten to the core and anyone unable to see this is truly blind to reality!

    4. quo-vadis;

      Where goest thou is a good handle because it is the same old same old with folks such as yourself who continue to parrot the same old line. As stated previously, you believe if you say it often enough and loud enough, that it is its own proof. Sorry, that will not cut it at this site.

      This is what annoys me about the gold is always suppressed all the time crowd. No explanation why Western based investors were selling their holdings in GLD and moving the money into the broader equity markets. Oh yes, I get it, that is all part of the conspiracy movement. Apparently mass hypnosis induced all of these big funds to sell their holdings in GLD at the same time.

      When your side mentions unprecedented demand for gold, you fail to mention that Western investment demand for gold had been falling. Yes, Asian demand is rock solid. That has been the case for gold for nearly 13 years now. But in and of itself, that is NOT ENOUGH to replace lost Western based investment demand. That is a fact - not based on conjecture. Doubt that? Then tell me what the price of GLD was doing as its HOLDINGS INCREASED? That was Western based investment demand. It disappeared. and why not? Gold is an asset that throws off no yield. It can only produce a return if it rises in price and that requires either a crisis of confidence or a genuine fear of inflationary pressures, something that is normally seen during a period of negative REAL rates. The fear over the last couple of years has been DEFLATION, not inflation. that is also a fact.

      You and your ilk - and I use this word quite distinctly - all are guilty of the same exact thing - namely excoriating those who do not subscribe to your views as ignorant, naïve and brainwashed. No responses to facts. no response to anything that has been actually going on in the BROADER markets, just more name calling and ad hominum attacks. So typical and so unconvincing to those who try to be objective, reasoned and rational in their response to the markets.

      Provide evidence that the sharp fall in commodity prices, especially over the last year, has been caused by evil market manipulators. Provide evidence that investors have been fearful of inflationary pressures (they have not). Provide evidence that money flows have not been out of commodities in general, including gold, and into equities where gains to be made were stellar, and I will become your disciple.

      Until then, refrain from your condescending tone. One can fully subscribe to the fact that there are grievous abuses in our financial markets. I have to trade around this stuff every single day in order to ply my trade. That is a far cry however from buying into the notion that the entire commodity complex has been smashed lower by the powers that be in order to accomplish some surreptitious plan and that gold should have been trading multiples higher except for the evil bullion banks whom by the way were buying the stuff as price descended.

    5. GLD has been shorted by the BBs and curtesy of their privileged setup have been able to loot the inventory of gold paid for by the mugs who think they own gold in this bizarre ruse for a fraudulent scheme by the BBs. It’s not the moms and pops who have been selling but the masters of the gold universe to cover their crimes of selling every oz 100 times over and then being unable to deliver.

      Tying gold to the entire commodities complex is disingenuous since gold performs an entirely different function to pork bellies, soy beans, orange juice, copper, lead and even silver.

      Have you noticed that SLV has not experienced the same outflow as GLD, that’s the smoking gun that the BBs have looted the gold to cover their crimes!

      Please explain how the following table is just normal trading. In the middle of the night at the quietest time of trading hundreds of tons dumped to crash the entire bid stack to cause maximum price destruction.

      Date Metal Ounces Tons Price Destruction
      1. 1 May 2011 Gold 24 million 750 Price was actually up
      1. 1 May 2011 Silver 5 million 160 $14.95 over 5 Days
      2. 6 Sep 2011 Gold 22.5 million 700 $63
      2. 6 Sep 2011 Silver 230 million 7,200 $1.86
      3. 8 Dec 2011 Gold 20 million 625 $194 over 6 Days
      3. 8 Dec 2011 Silver 112 million 3,400 $1.85
      4. 29 Feb 2012 Gold 24.5 million 62 $103
      4. 29 Feb 2012 Silver 263 million 8,200 $3.75
      5. 12 April 2013 Gold 13.4 million 416 $38
      5. 15 April 2013 Gold Footnote c $160
      6. 12 Sep 2013 Gold 1.2 million 38 $84
      7. 20 Sep 2013 Gold 200,000 6.2 $10
      8. 11 Oct 2013 Gold 2 million 62 $16

    6. "Have you noticed that SLV has not experienced the same outflow as GLD"

      It's a question I often asked myself indeed.

    7. some valid points there, quo_vadis.

      My take if the US can hoover up all their population's phone and text messages, and do this without anyone's consent, and also bug the whole communications channels of the rest of the world and also bug the multi-nationals like Petrobase (are Exxon really a public company or a government driven company, after all they go and extract a lot of oil from the Countries that America goes to war with under the pretence of democracy).

      So, why would the markets not be rigged in the US. It is very easy to do, and get away with it.

      There are no such thing as free markets, all we can do is hope along for the ride.

  2. Completely with you, Dan.
    I took the opportunity of prices bouncing on the ma20 daily a few days ago, and am keeping 2/3 of my long position after securing a quick 1/3 sell so that I can't lose (stop loss close to ma20 now).
    Since, the Bollinger Bands daily are reversing up, and the ma20 as well.
    Last small correction stopped on the ema15 and didn't reach ma20.
    All those small signs are nice, and as I prefer to be early in a potential reversal than too late, I am now positioned once more as a bull, trying to buy more in the dips and sell at the tops...as long as I will see higher lows and higher tops. So...I hope we'll break through 1260 quickly.

    Of course, as nothing is for certain, I would also respect prices if they should break down and close under the ma20 once more.

    1. P.S : small precision, my resistance area above is in fact at 1265-1270. So we'd have to break through 1260, but also 1265-1268 especially for me to feel "better" as a bull.

  3. I would just add that it the GG hostile take over attempt of Osisko may be helping the junior miners / complacent bears. The threat of an undervalued junior with a good asset being acquired would make it a good time for shorts to lock in their profits. Just a hunch -- GDXJ as a proxy for juniors has been out performing the HUI almost 2 to 1 in past week.

  4. It's become pretty obvious now: The gold market is anticipating additional inflation. I noticed this the last time the Industrial Production figures came out last month, and it happened again today. The important part is the capacity utilization figure.

    Of note: "This economic statistic does not fit the widely-used characterization of a slow-growth economy that is underachieving," says Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ. "There is no output gap that we need to close before lifting interest rates if you use capacity utilization instead of the unemployment rate. Capacity utilization — factory run-rate — is 79.2% in December, close enough to the 2007 average of 80.5%."

    1. Unknown;

      Those stats are very informative and very key to understanding any sort of subtle shift that might be taking place in the gold market in regards to sentiment. The economy needs to show strong growth to induce more job hiring and more job hiring needs to lead to HIGHER WAGES. Wages have been flat to stagnant for many years meaning consumers do not have the disposable income to generate the kind of spending that will kick up the Velocity of Money. When the latter finally starts to rise higher, gold will as well.

      thanks for taking the time to get those statistics for us all here!


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  6. Hi Dan,
    Great blog, smart man. I really enjoy reading what you have to say each day.
    I really don't like to see the current optimism regarding "the bottom" of the price of gold and gold stocks. My anecdotal experience tells me that there needs to be one last puke in the gold markets, maybe down to $900 or $1000 an ounce, and then, maybe, we can start thinking there's a little light at the end of the tunnel. It just seems "too easy" to see a "bottom" right now, like the trap is set for us one more time. Best wishes. Brian

    1. Absolutely agree. I think we have a nice little bear trap going on. You can almost feel the exuberance in the miners. Fed meeting (next week I think) could either break the back of this rally or generate large short covering. I'm staying short for now.

    2. hmm...I don't say we hit a bottom...but imho there is little way to be sure of one or the other.
      Let me ask you a question : if gold eventually goes up from here, did you already define a criteria that will make you change your point of view? Will it be, for example, a price criteria, such as gold going through some level, or gold finding a support and uncapable of going lower than some level?

      Imho it is a bit tricky to guess where gold is heading, because of the various supports and trends of time units :

      - on a daily time unit, I'm considering that gold is now heading UP as long as the ma20 (1225 area) will hold and keep reversing up. But we need a confirmation of that very soon : breaking 1265 area. If we don't, I'll stay in my neutral stance of a range 1225-1265. But the thing is I see an upwards support on the daily time unit.

      - on a weekly time unit, oops, the resistance is going down. We are reaching 1265 which is linking previous tops in gold.

      - on a monthly time unit, oops, the support is around 1190 area, and it links the bottoms from 2007.

      Supports / Resistances of the longer time units are usually stronger and harder to break than those of the smaller time units.
      So...it all depends on your time unit now :

      - daily : gold is going up, BUT it is meeting the strong downwards resistance near 1265 on the weekly time unit.
      - weekly : gold is goind down, BUT the monthly upwards resistance at 1180 held and allowed prices to bounce.
      - monthly : gold is going up long term as long as 1180 is holding.

      What Brian says is that he feels that the weekly downwards trend is going to be strong enough to break the monthly upwards support. I see no evidence of this for now. Price reaction showed that we bounced on this support level, and are now 60 $ above it.
      That bounce was enough to break the previous daily downwards downtrend (we were capped under the ma20 and under the ma50, and it is not the case anymore!).

      So, question is beyond all the that : how do you trade, what is your strategy?
      It is fine imho to say : I'm shorting at 1265, just under the weekly resistance for example. Or, I'm buying at 1225, just above the ma20 daily, if you are doing "short term" trades. It is also legit to say "I'm buying near 1180" as a long term investor, or "I'm selling near 1180" to play the break of the support area...
      Most important in all that, before being right about the market's direction is your risk. How can you get in the market with a reasonable stop loss not far from you, logically set between your entry point and a support or resistance? What is your first target (realistic), so that you can quickly sell 1/4 or 1/3 of your position, raise your stop loss and benefit from a ZERO LOSS probability trade. I like to trade that way. Of course, it's personal.

    3. Hubert - I think we're in a range bound position, with the top at $1260. A daily close above $1270 will kick me out of my short. Until gold clears $1600 or hits $1050, I'll be a bear. $1265 looks significant...

  7. "It will be interesting to see how the "gold is always manipulated all the time" guys and gals are going to deal with this."

    For the past two years J.P. Morgan and the other big big banks have been manipulating gold and silver down by naked short selling in the futures markets. The falling price panicked the hedge funds into selling gold and silver at lower prices that J.P. Morgan and the other banks were glad to buy at. Of course they didn't send Dan or anybody else any emails admitting to this. Now that the big banks have enough gold bought at fire sale prices, it's time to start manipulating the price back up again.

    Always glad to help out Dan.

    Lewis Forro
    Virginia Beach, VA

    1. ditko fan;

      You are going to have to do better than merely repeating that stuff and by so doing, attempt to prove your thesis by words. Maybe you think that by parroting this stuff it amounts to clear-cut, irrefutable proof. Sorry, but that ain't gonna cut here.

      Tell me something- "for the past two years"... tell me, over the course of this period, why hedge funds have been doing the selling while the bullion banks have been doing the buying. This is the problem I have with guys like you... you refuse to be OBJECTIVE and look at the evidence.

      I have admitted and written publicly in the past that the bullion banks have been the big sellers DURING THE RISE IN THE PRICE OF GOLD. That was prior to its breaking chart support at $1530. If you want to say that the BB's were the ones who sold the metal to force it down through $1530 and turn the chart picture negative, then say that. But do not insult the intelligence of the readers of this site by blaming the fall in the price of gold over the last two years on the evil, nasty bullion banks.

      Were these evil, nasty bullion banks selling commodities across the entire complex with a view to suppressing their price as well. WAS it the bullion banks knocking coffee/sugar/corn/wheat, etc. etc. etc. to MULTI YEAR lows? If so, those are some busy people.
      Here is fact for you - the reason the ENTIRE COMMODITY COMPLEX moved lower over the last two years was because the money being created by the FEd has not been making it into the broader economy but has instead been remaining primarily in the equity markets. During this same time frame the US Dollar has been quite strong and has not moved lower but has instead remained firm. If gold is the anti-dollar, as I believe it is, or at the very least tied somewhat to the price of the Dollar as most gold folks will agree, how could one expect the price of gold to move higher while the Dollar was also moving higher?

      The Velocity of MOney has been declining. Tell me, how can gold be moving higher, when the velocity of money has been falling. And please do not tell us here at this site that it is because of the bullion banks. Save that for the many other sites out there that are also drinking the same Kool-Aid as you have been.

      Here is all that one needs to know - when REAL INTEREST rates threaten to turn NEGATIVE and when inflation concerns REPLACE deflationary concerns, gold will stop moving lower and eventually resume its uptrend, bullion banks or no bullion banks.

      One last question - according to your view, it is the bullion banks who are now long who are "manipulating the price of gold back up again". Okay, so why are the hedge funds returning to the LONG SIDE of the GOLD MARKET? Also, if the bullion banks are the ones manipulating gold to the upside, then please explain to all of us here at the site why my view that the recent big selling barrage that dropped gold $30 in seconds was not the result of a fat finger trade as I contend but was instead the work of some nefarious force intent on suppressing the price of gold?

      You are so typical of that crowd that just relies on vague statements that make no logical sense. If the bullion banks are working to manipulate the price of gold higher - as you contend that they are now doing - then explain to us all here why they are also working to manipulate the price of gold higher by flash crashing the price???

      You cannot have it both ways. Do you not see how foolish you look right now? Is it not easier and more rational to merely understand that at some point all of this money printing by the Fed will have consequences and when it does, gold, along with many other tangible assets, will anticipate a wave of inflationary price increases?

      That is how seasoned traders look at things. We do not place positions in markets based on theories but instead attempt to understand why markets are doing what they are doing.

    2. ditko fan;

      By the way, this sentence:
      If the bullion banks are working to manipulate the price of gold higher - as you contend that they are now doing - then explain to us all here why they are also working to manipulate the price of gold higher by flash crashing the price???

      Should read as follows:
      If the bullion banks are working to manipulate the price of gold higher - as you contend that they are now doing - then explain to us all here why they are also working to manipulate the price of gold LOWER by flash crashing the price???

      That was a typo on my part. Let's just put it this way - the reason I take issue with the "gold is always manipulated ALL THE TIME crowd is because they are always keen on blaming every move lower in gold on the manipulation scheme. That is mentally lazy. Markets run on SENTIMENT and they form TRENDS based on that sentiment. The sentiment towards gold over the last two years, just like the sentiment towards most commodities in general, has been that the economy is not growing fast enough to produce inflation. Why would anyone want to put the bulk of their investment capital into an asset class that throw off NO YIELD when the equity markets were returning double digit yields? It really is that simple my friend. Try not to make it any more complicated than it is.

    3. It is a very interesting debate, thanks Dan to bring back so many details.
      I think people who are a bit "brainwashed" (no insult here, but I like the term, because of being bathed in the same motto for 10 years), are like those average poker players.
      They think they know the game.
      Dang they know the odds, the rules, implied and explicit odds, they have all the game theory of opening hands, and they think they know how to play. But the real complex rules, the ones which take years to learn, is hidden from them and make them analyze the wrong way in the most important hands (the marginal ones).
      You can make a nice story to support your point of view with a few elements, without digging the story too much.

      Those elements will be :
      - someone is trying to suppress gold's price with huge quantities at the worst time, when markets are empty.

      The (wrong) conclusion will be : so you see? It must be the BB who are doing that. Prices are manipulated.

      Personally, I'm trusting Dan to do a thorough analysis of all elements from a factual point of view : COT reports, etc, etc... before he makes conclusions.
      If :
      - bullion banks have been buying regularly in this bear market
      - gold is not an exception, but ALL other commodity markets are also going down
      Doesn't it question the previous theory?
      Hedge Funds are the ones which lead the prices. If they decided that there was a better investment than gold for the time being, maybe they hardly needed a manipulated market. I mean, FED and ESF are already doing the job of manipulation but on another scale. They inject QE and allow Dow / SP to levitate. I don't think they need to intervene very much to keep pushing prices down.

      Maybe your question should be : WHO sold 500 tons in one day in middle of april? Which group of sellers was that? Can you tell where it comes from?

      Now it is true that I'm curious about GLD stocks being plundered whereas SLV stocks (ETF) remained stable :)

  8. Too early to tell if this is a dead cat bounce or not, but gold is finally moving off the lows in every currency, especially the Aussie Dollar and Cando which were destroyed again today.


  9. Dan It would be interesting then for you to have a debate /discussion with Andrew Maguire with regard to the manipulation that you believe does not exist, I think he actually has facts.

    1. That would be quite interesting indeed.
      But I guess, quite hard to organize.
      Unless you find a sponsor for videoconferencing.
      I think when a debate gets into less than simple levels, it requires physical presence or at least a kind of videoconferencing between correspondents.

    2. Steve;

      I would make the same arguments with Andrew that I have made here - gold requires a strong inflationary force/sentiment to be present across the hard asset sector - RISING COMMODITY PRICES and a weakness/loss of confidence in the curreny/monetary authorities. It also requires NEGATIVE REAL INTEREST RATES - that means that the rate of inflation is higher than the yield on a one year Treasury. None of those factors have been present over the last two years.

      As a matter of fact, the US Dollar has been fairly solid over this time frame as well.

      Any person who understands gold will point out that they are certain FUNDAMENTAL PILLARS ( by dear friend Jim Sinclair pointed these out many years ago in his CLASSIC FIVE PILLARS of GOLD).

      Among those 5 pillars were a SINKING DOLLAR AND RISING COMMODITY PRICES. tell me Steve - and try to set aside any preconceived ideas that you might or might not have - be OBJECTIVE and Pull up the price charts for yourself - HAVE THESE TWO PILLARS been present or not during these last two years, but more especially - the last year?

      If you are objective you will see that they have NOT BEEN.

      The entire commodity complex has been moving lower, not higher as it was when gold was soaring. The US Dollar has been moving slowly higher, not lower. Also REAL INTEREST RATES in the US have been positive. As a matter of fact, among the industrialized nations of the West, the US is the only country were RISING RATES are more likely. That tends to undercut investment demand for gold because it throws off no yield whatsoever.

      Try to understand gold from an investment standpoint and you will be able to better understand its ups and its down without getting caught up in all this emotional and sensational hype that is far too common among the gold bugs.

      Remain objective and emotionless in your trading/investment decisions and you will succeed.

      I have been giving some thought about possibly writing a book about successful trading. If I do, the one thing I will lay heavy emphasis upon is that most traders/investors are their OWN WORST ENEMY. They cannot remain unbiased nor can their curtail their emotions and that is why so many cannot admit that they are wrong and that a trade/investment has gone sour against them.

      There is an old trader's adage: "the first loss is the best loss". What that means is that the earlier you get out of a losing trade, the better off you will be.

      Hope this helps.

    3. Dan, I hope you do write a book...I'm sure it'd be a success and worth reading. Have you thought about doing a trading training conference/seminar? You're a professional trader, and I for one would be interested in taking part in such a session. Have a good weekend

  10. Dan,

    I am surprised you have not grown weary and annoyed from all these manipulators and tinfoil hat talk for so many years to the point that you would be ignoring them by now completely and even banning such talk on your blog.

    These folk they continue to believe and regurgitate the same nonsense over and over like a religious cult whether gold is up or down, they refuse to listen to and accept a little bit of reason. It is hopeless to explain to these people who most likely don't even trade these markets regularly and I even suspect most of them are shills and deceitful people doing the will of their own or their masters. Plenty of these types in the financial media and the internet as I'm sure you know. As if there aren't plenty of sites out there where the gold conspiracy crowd can spew their BS nonstop.

    Again, I don't know know how you can stand to put up with this crap for so long and continue to respond to them, I value your opinions, thoughts and insights and others as a trader while ignoring all the noise that goes on, especially from the perma bull crowd whether its equities or metals.

    1. Jesse, I think the opposite than you on this one.
      There is no point having a blog if it's to talk only to those already convinced.
      " It is hopeless to explain to these people ".
      I don't think so, as they come to this blog, read Dan's analysis which contradicts their, and participate to the debate in the forum. So on the contrary, I think that's where Dan's efforts are most needed and helpful. And even if he helps a handful of those "permabulls" to have a deepeer understanding of events, well that's already a handul worth.
      I don't think it's hopeless, of they would not even talk.
      If they talk, they are open to discussion, that's what I think.
      Silence is the worst enemy of understanding.
      Besides if you take this attitude, someday, you may be on the wrong side and refuse to listen to wisdom too.
      The opinion of an experienced and real trader, specialized in commodities and PMs, in unvaluable imho to these people.
      Some will discard his opinion. Some will not.
      For the latter, I think the detailed posts of Dan are far from useless.
      Wishing you a nice weekend,

    2. Jesse;

      Yes, I do grow weary in refuting the same old rehashed idiocy time and time again. And you are correct in linking this to an almost quasi-religious zeal.
      I do not think it is a secret that I am a devoted following of Christ. For me that means there are certain elements of my faith that are above reason. I accept through faith even though I cannot offer logical proof. No amount of contrary arguments would ever cause me to change my mind in that regards.

      It is the same with these gold is always manipulated all the time crowd.(GIAMATT). They cannot be convinced no matter what points are offered to refute their dogma.

      Here is their problem - they are Johnny one-notes who somehow have gotten in into their heads that gold is the one asset class that must ALWAYS RISE IN PRICE. Never mind that it is precisely that - an asset and that investors/traders look at various options for investment capital in that fashion. Sometimes an asset class will fall out of favor; sometimes it comes back into favor. It is no different with gold.

      They cannot accept that. I personally think part of their rabidity comes from the fact that most of them have watch their net worth evaporate in smoke over the last two years and they are incredibly angry as a result. So what do they do? Instead of blaming themselves for not learning to read a price chart and understand the nature of markets and ever changing money flows, they lash out at some sinister force that they heap all their misfortunes upon. "If it was not for Goldman and Morgan, I would be rich and wealthy by now. Instead my net worth has been cut in half".

      That is why I started this blog in the first place. I could see the shift beginning to take place and wanted the liberty to call it as I saw it. Needless to say, whenever you touch upon someone's SACRED COW, you are going to incur their wrath.

      I had hoped that by presenting some facts about money flows and showing folks how we traders read markets to succeed, some of them would wake up and realize that they had been misled by all this talk and that they could actually have preserved some of the paper profits that they might have accrued prior to the outflow of money from the overall commodity sector.

      I do not think I have been the least bit successful however judging from the stream of emails I receive in private and some of those postings here.

      What can I say- it is hopeless to convince folks that their financial well-being depends ENTIRELY upon their ability to read markets and not upon some nefarious force somewhere who it out to personally get them.
      At some point I will have their posts deleted so as not to degenerate this blog into another permabull gold site. I have tried not to do that but it does tax one's patience.

    3. Yes, for years I listened to much of the goldbug community and let myself go along with it.
      THE number one thing Dan has taught me is to follow chart trends, not opinions of what could be or should be.
      When I go back now a couple of years and look at the gold chart I just shake my head how I didn't see this long down trend sooner.
      But I've learned thanks in part to discussion here.
      Hope everyone went long in the last week or so.
      There is still prevailing charting that says we may still test sub 1000.
      So I'm treading lightly. We have not had capitulation.
      But then again if inflation becomes more "apparent" we may just move higher.
      My feeling about manipulation is, who cares, go with the trend. You can make money either direction.

    4. Steins;

      I could not have said it better myself....
      Thank you

    5. BTW, I changed my handle to my regular one, Steins.
      Dan I have to disagree with you for once, you have effected some of us! And in a very good way.
      Thank You! John

    6. +1 with Steins. It is hard not to be influenced when every gold expert' and their website is telling you that the bottom is near and that prices should go up.
      You become reluctant to sell, hedge, you try to pick bottoms...
      That's what I did all the way from 1800 to 1550.
      (a famous expert saying that T.A was not so relevant this time at 1800 because fundamental conditions were exceptional and it was careless to sell in this situation, etc...).
      So I was loaded more than I should, and went back to my senses at the last moment, fortunately, and I remember it was mainly because you were having a much more moderate judgement on your weekly commentaries at KWN at that moment (where everyone else was saying that Asian demand was always surging and ensuring a support for gold at 1520. Remember that one? :)).
      I'm not sure what I would have done if I hadn't had this little voice reminding me that a professional trader in PMs didn't really give a damn what others were saying and would not bet his shirt that further decline was not on the way.
      I'm pretty sure you helped more people than you imagine.

  11. Come on, move over to the stock market. Why waste your expertise on the dead horse?

    1. Every market moves then quiets down. Volatility increases then decreases within cycles. This is shown through Bollinger Bands for example.
      Usually a trader makes money when the market is moving (though you just adapt your trading when you are in a range). So why call gold a dead horse more than stocks? Besides it can look like a dead horse on a particular time unit, and right in the middle of a strong trend on another one.
      What is so much more exciting about the SP500 than about gold now?
      You mean long-term investing?
      You mean go all-in long on the Dow and SP500 after last year's rise, and at the very moment when tapering is on the table? Without a stop loss, I suppose?
      I don't think so.

  12. Ah...speaking about gold manipulation, here is a link towards a big document :)

  13. I think it needs to be pointed out that western investment demand is overwhelmingly in the form of derivatives of the metal, aka paper, where rock solid Asian demand is overwhelmingly for the real thing.

    Trader Dan again:

    That has been the case for gold for nearly 13 years now. But in and of itself, that is NOT ENOUGH to replace lost Western based investment demand.

    Indeed, western "investors"- or are they more properly described as trader (Dan's)- wanted paper, and their ardent desire for paper gold put the bid under the paper gold market. In the meantime, even as physical has been ardently desired by Asians throughout, it has not supported the market because only demand for paper makes makes paper levitate. This will continue until such time as those who demand physical in size, folks who can not otherwise be fobbed off, can not source the real thing. At that point the paper market will be dead in the water.

    Consider all readers that the world doesn't need any more physical, as there is plenty of it, and, therefore, the world certainly doesn't need paper gold which artificially expands the stock of something of which there is more than ample supply. That kind of puts the kibosh on the idea of miners as being anything but a very treacherous trade, wouldn't you say?

    1. This comment has been removed by the author.

    2. If there is plenty why can't the Germans get their gold back and why does abn amro need to settle their certificates for cash ?

  14. What would constitute irrefutable proof that the price of gold is manipulated? Perhaps there are those who, even after a failure to deliver on good contracts for physical, would say their is no anomaly.

  15. Look at this one year chart of corn, collapse from $700 to $500, very reminiscent of the waterfall "take down" of gold in April. Would this be manipulation too?! No it's just how commodities trade in a bear market. Why would someone want to manipulate corn down:


    1. Elijah;

      Yes indeed, precisely my point... Look at a chart of wheat or coffee or sugar, etc. Very similar patterns... That is something the GIAMATT crowd simply cannot come to grips with and why their arguments ring so hollow to those who understand money flows and market sentiment.

      It is a given that one of the FIVE PILLARS for Gold is rising commodity prices. That has simply NOT been happening. When the commodity sector as a whole shows signs of stabilizing, so too will gold. This might possibly be happening now but the jury is still out on that in my view and that is why I am more ambivalent about gold here right now. I have no opinion on it other that what the charts are currently telling me which is that the short term downtrend has been halted but the market has also not yet embarked on an uptrend.

      The weekly chart still shows the bears in control of the gold market right now. So it has shown some signs of real improvement in its technical posture but the bulls have much more work to do yet.

    2. Evidence based research shows that gold is one of THE most sensitive commodity out there for deflationary.inflationary pressures. It leads other commodities by months, if not longer.

      Deflationary pressures are certainly accelerating as we enter 1H 2014, particularly as measured by the PPI since March 2011. These deflationary pressures in the PPI should subside in 1H 2014, and then the rest of the commodities will play catch up with gold prices, which will have bottomed months before.

  16. Also look at DBA which can also be used as a measure of inflation, it gapped down Friday touching to all time lows:


  17. Interesting to read this to understand price movements. It is so important, to watch prices not only in one time unit, but on various time scales, to undestand the dynamic of a trend.

    - - The Influence of the Various Time Frames - -

  18. Thanks for your commentary, Trader Dan!
    I have missed your comments on the weekly metals wrap on KWN. I hope that you are planning do continue to comment there.
    All the best,

  19. Dan wrote: "Hey, nothing like acquiring lots of the metal and then letting your analysts give the market a bullish call which essentially guarantees that the price is going to rise and you are going to secure some excellent profits."

    Can't this be viewed as another type of manipulation?

  20. funny too, JPM analysts would focus their bullish calls on SA gold miners, whose production has been in decline for the past 30 yrs or more while the geopolitics and social discontent in the SA region has only escalated in recent years. Don't suppose the rising social discontent has anything to do with the annual production declines?

  21. Hi Dan,

    Going through the charts this weekend, what is remarkable to me is how the individual resource companies are gaining traction although the metals themselves are not really moving.

    What is your opinion about the mining shares - not just the gold shares, but uranium and platinum stocks - driving the metals higher?

  22. What will Mark do if the price of GOLD and SILVER goes up from here?

    Demand for PHYSICAL SILVER sends PREMIUM PRICES higher

    I've been accused of being a paper pumper and because I don't stack physical I'm laughed at to scorn. I'll have the last laugh.

  23. Resistance at 1260 is there and holding.
    It's a strong one, because it is the downtrend resistance linking tops of the weekly time unit.
    I'm not detailing my intra-day trades, but the idea is that I keep a bit of my long taken at 1220, in the same time trying to make a profit close to that resistance of 1260. Idea is to win sthg before we go back to 1220, and win sthg too if we get through 1260, so...basically win something whatever prices do :)

    1. Hubert - yeah, I thought $1260 was going to give way there. Tried to buy GDX yesterday, then my computer informed me it was a national holiday over there! Saved my bacon. All this taper talk is hurting gold. Next week's fed meeting could push the metal back under $1200...

  24. Yes John,
    Still, I'm not the professional trader here :), but as far as I'm concerned, I try never to anticipate whether or not a resistance / support is going to hold.
    Psychologically, it's when prices reach a support and that the support is tested that some bulls panic most, thinking it will break. But guess what : a support holds until it breaks. Some bulls sell at the worst time on a support, same, they buy just under a resistance because they anticipate a break.
    So now I'm just giving a chance to see what happens when we get close to a support / resistance. Here under 1260, it's been a whole 3 days that we are bouncing down. It's already enough to show that resistance is here and won't give way without a good fight. So, I'm out a bit, etc... but I'm already back long at 1239 because I see that prices seem to bounce on the MA50 daily again, while the ma20 is definitely reversing up. Anyhow, I'm not getting too much in the details or I would have to post too often :)

  25. Dan - would you care to comment on the decoupling that's taking place between the miners and gold? I'm going through the data now and quite fascinated by it. Could be a great short, unless this is the start of a new trend...

    1. I think many think the double bottom is the final bottom for gold. Either they're right and are going to make off like bandits or are getting rounded up for the slaughter.

    2. Yeah, I think that is about right. I got out the miners when gold peaked last week, but the miners continued surging! argh! Bought back in NUGT (50%) and shorting gold with the other 50%. Too scared to miss the massive mining rally to sit and wait. Would rather be wrong at this level, let the short do it's thing and allow me to average in lower on NUGT. What a calamity!

    3. The main trend, weekly, is still down, as long as 1260 goes down.
      The ma20 daily going up now, and the proximity of the ma50, gave an opportunity to go long on the very short term, sell a bit under 1260, put a stop loss under the ma20, and see what happens.
      I'm not doing more than that, not saying yeeeha, the double bottom is there.

    4. follow up trade :
      - long 1220 right above the ma20 daily (polarity area, stop loss very close)
      - out 1/3 at 1238 to secure profit, zero loss trade
      - out 1/3 at 1250+ after the resistance at 1260 proved to be solid
      - back 1/3 just under 1239 (the level of my first out 1/3 in fact), because now the ma50 daily became a support and the ma20 is going up, not far behind.
      Situation : back on my 2/3 long of initial position. Stop loss following up every day with the raising ma20 daily.

      Remark : it was perfectly fine to try a short gold instead on the weekly time unit under the downwards resistance near 1260 when it proved to be holding. If I had done that, I would have bought back 1/3 of my short yesterday near the ma50 daily, again to secure a no loss trade.
      In both cases, it is nice to have a stop loss put under a raising support, or above a downwards resistance.
      The main point in both cases : secure the trade, don't allow a loss, then let prices do what they want.
      It is more important to find a nice spot to get in the market than to try to anticipate where prices will be in a month.


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