Spot gold’s recent low occurred on April 4 when it traded at 1611.00. It then bounced touching 1681.30 this past Thursday, a 4.3% rally in one week. Silver rallied from 30.91 to 32.71 in the same time frame We are now testing those lows.
Remember, gold has passed its normal seasonal strength period while silver, in theory, still has a shot for strength into May.
Overall, however, this is not normally the time of year to own gold, except for either trading purposes or long, long-term investment purposes. What could drive gold (and silver) higher short-term? One of the main drivers of this expected price push was expected to be the resumption of acute fears over Eurozone sovereign debt, with Spain set to be the new area of concern. Moreover, it was thought that over the next few months the US recovery will begin to falter and this will force the Federal Reserve into taking additional monetary policy measures. Bearish sentiment remains quite high for precious metals this is also a plus. The Plunge Protection Team has succeeded in putting a lid on gold and they have either convinced or have been voluntarily joined by numerous bearish analysts.
JP Morgan’ television appearance last week on CNBC with the head of commodities, Blythe Masters, may be a turning point in the silver suppression saga. It is widely recognized that as a result of the acquisition of Bear Stearns (arranged by Bernanke), a large short position in silver was inherited by JP Morgan. JP Morgan Chase is not in the commodities speculation business, Blythe Masters told CNBC Thursday.”It’s not part of our business model. It would be wrong and we don’t do it,” she said. The misperception, rampant in the blogosphere, comes from what JPMorgan does for clients, Masters said. “We store significant amounts of commodities, for instance silver, on behalf of customers. We operate vaults in New York City, in Singapore and in London. Often when customers have that metal stored in our facilities they hedge it on a forward basis through JPMorgan, which in turn hedges in the commodities market,” she said. “If you see only the hedges and our activity in the futures market but you aren’t aware of the underlying client position that we’re hedging, then it would suggest inaccurately that we’re running a large directional position,” she added. “In fact that’s not the case at all. We have offsetting positions. We have no stake in whether prices rise or decline.”
What Blythe failed to us, however, is that her client is the U.S. Government who with infinite deep pockets orders the sale of silver, gold and any other futures contract in quantities big enough to force prices lower as needed or desired! This is the piece that when totally recognized and believed will be the undoing of the ‘conspiracy’.
From Yale Hirsch:
My 1987 Stock Trader’s Almanac was dedicated to THE NEW PROGNOSTICATORS.
Mark Leibovit was one of them. I evidently had insight as Timer Digest named Mark the
“Number One Market Timer for the 10-year period ending in 2007.”
For the 10 years ending 2009, he was #2 intermediate Market Timer.
He is also their #1 Gold Market timer for 2011.
This book should be REQUIRED READING for anyone who trades.
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