So far, the market is saying, “gold goes up.” – Richard Russell
From Bill Murphy – “What’s Love Got To Do With It,” was a great Tina Turner song many years ago. When it comes to gold, “What’s The Dollar Got To Do With It?” For the second day in a row, gold was bombed by The Gold Cartel while the dollar was lower.
With the dollar down .21 this morning, gold was taken down from $1136 to $1117. The move down was all about the US Government being petrified about the deteriorating real economy in the US and the drastic measures they are going to have to take to attempt to remedy the myriad problems they are facing. Over the years it has become apparent to the GATA camp, the worse the problems are, or the worse a specific economic report is, the more The Gold Cartel goes after the price. SHOOT THE MESSENGER! The action in the dollar is meaningless when the US Government orders the price down.
This morning’s AM Fix was a positive $1132.75. After a higher opening on Comex, The Gold Cartel began their attack, which went into high gear after the PM Fix of $1127.25 … PLAN B was the name of their game. Yet, in one of the strangest gold trading days I can ever recall, gold began to climb back, even as the dollar strengthened a bit. With silver leading the way up, gold managed to go positive, and then very late in the day it challenged its opening high of $1136.40 … only to sink in seconds back to $1130 when this news surfaced
13:03 10-yr note auction yields 3.75% with 49.95% allotted at the high
•Bid/cover 3.00 vs. avg of past 10 auctions 2.67
•Indirect participation 29% vs. avg of past 10 auctions 38.82%
2-yr (2/32) to 0.86%
5-yr (6/32) to 2.45%
Dow 10669.96, 42.70 .
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BUT, gold came back once again going into the close and actually made a small new high for the day.
Yes, it is the Battle of the Titans: the physical gold market against The Gold Cartel … with The Gold Cartel getting stuffed today and losing this battle.
Based on how gold traded the past two days with a weaker dollar, it is very clear The Gold Cartel wants the price down, especially during this Treasury auction period. But boy did they get their head handed to them today. Some big money wanted in on gold and they wanted in badly.
The tipoff gold had a shot to come back today was the stunning action in silver. Yes, it was belted early when gold was clocked, falling to $18.18. But, almost immediately, it began to relentlessly move higher, going positive even with gold under a good deal of pressure. Then silver began to make new high after new high, up as much as 23 cents with gold around unchanged.
Silver has now acted very well all year, even holding key support at $18, while gold plunged through its key support at $1140 yesterday and even $1120 at one point this morning. I asked Dave from Denver…
What do you think is going on in silver? It is trading like a totally different market so far this year?
Do you think it could have anything to do with the CFTC?
Bill, that’s a really good question. You know I’m completely skeptical that the CFTC will do anything on the metals. How can they w/out causing major pain to JPM? I’ve been wondering for the past few weeks if maybe some of these big hedge funds have been putting on a short gold/long silver trade to exploit the high ratio. That could be part of it. Also, as the price of gold goes higher, the “poor man’s gold” aspect of silver will kick in and small buyers will buy silver over gold. I know my friend who is a local bullion coin trader told me yesterday that finding supply at the wholesale level and from individual sellers is hard right now. I also think the GATA doctrine that the physical market will overrun the paper market eventually is starting to have some influence.
On another note, JB has been referring to huge demand for gold in Japan. It hit me this morning that Japan’s Govt is in at least as much financial trouble as the U.S. is and now the new Prime Minister is calling for a weaker yen. There’s a lot of savings over there that can flow into gold and silver if the populace decides that it’s time to run from the yen.
Yes, it’s very difficult for me to believe the CFTC will do anything about JP Morgan. But perhaps the issue will surface in some way. Dracula can’t stand the light of day and neither can JP Morgan’s short silver position. If so, it could set off bells and whistles, which the CFTC might have to respond to.
Seems to me silver is GONZO if it can clear $18.75…
William J. Murphy III is the Chairman of the Gold Anti-Trust Action Committee and owner of www.LeMetropoleCafe.com. A graduate of the School of Hotel Administration at Cornell University in 1968, he went to become a starting wide receiver with the Boston Patriots of the American Football League. Mr. Murphy, who now resides in Dallas, Texas, spent much of his business career in the Futures Industry with such firms as Drexel Burnham and Shearson Hayden Stone. Today, he writes gold market commentary for his financial web site that features the precious metals and contrarian economic analysis.