Once again we have another one of those proverbial flies in the ointment when it comes to one of these frequent rallies we have seen in gold during the ongoing bear market of the last two+ years. We get a great rally and a lot of powerful chart action over at the Comex only to wait upon the reported holdings update from GLD and then find disappointment.
Instead of a nice climb in the holdings, what did we get instead? _ a fall of some 5.7 tons! Quite honestly, that came as a very big surprise to me. Given the action in the mining shares, I had expected to see some increase in the holdings. 'Twas not to be apparently.
This confirms my concerns about the rally - namely that while it was indeed powerful, it was due primarily to short covering and not so much due to an abundance of new buying. It is obvious that some used the rally in gold to close out some longs in the GLD.
Here is the chart. Gold holdings are now DOWN 71.07 tons from the first of the year ( and going in the wrong direction) while reaching back to levels last seen in late September 2008.
I am going to keep a very close eye on this next week and can only hope that we get some regular numbers reported daily from the ETF. Those of you who tend to follow that thing as I do know that we can sometimes go days without any fresh numbers coming our way.
"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
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