- Gold completes a golden cross last Friday, the cartel promptly smashes gold & silver under $1300 & $20 to dampen sentiment
- Shortage developing in US Gold Eagles as the Authorized Purchasers collectively rebel against the US Mint & halt Gold Eagle purchases- The Doc breaks the story and explains why on the show
- Banker deaths roll on as JPMorgan’s top commercial bankruptcy lawyer killed and thrown 150 ft by a speeding minivan
- The Goldman/Zerohedge narrative that Chinese hedging caused gold’s 2013 price crash- why the numbers don’t add up
The SD Weekly Metals & Markets With The Doc & Eric Dubin is below:
Source: William Banzai7
Janet Yellen didn’t exactly yell during the last FOMC release, but the financial press ran with the idea that continued tapering will depress the price of gold and silver going forward. The mainstream media would have us believe precious metals are simply selling off after a momentum run. It’s true that we did see a quick snap back from December lows. Take a look at the following GLD chart, and how just after reaching 70 on a relative strength index, the sell-off began:
It’s actually not all that uncommon to see sustained readings above 70 and sideways price moves to “digest” over-bought conditions. As you can see above, that’s what happened with gold last month, when we were still fresh off the slaughter of 2013 and the line of investors and speculators holding bags of capital seeking increased exposure ahead of a reversion to the mean was far from being satiated (i.e., representing a pool of capital big enough to overcome the cartel, and further supported by Iraq’s central bank buying 36 metric tons of physical gold in early March, to which Kitco unsurprisingly spins as a negative on a going forward basis).
Fast forward to the last couple of weeks. After gold flirted with $1,400, the fast money gang was ready to take profits. All it took was a relatively small push by the cartel to get downside momentum moving. It’s also important to underscore that this week we have been moving through COMEX contract settlement for near-month gold contracts. It was important for the powers that be to shake longs out of their in the money positions. Time and again, we’ve seen this pattern. Paging Bloomberg News and Professor Rosa Abrantes-Metz and Albert Metz: a study of gold vis-a-vis COMEX expiration should be the subject of your next research paper.
If anything, the fundamental case for owning gold and silver has grown stronger in the last three weeks. We have rising geopolitical tensions, more widespread understanding of an epic credit bubble in China, a housing market that’s rolling over in the United States, ongoing negotiations to rejigger the IMF system and the US dollar’s weighting, continuing demand for gold exceeding mine supply, and many other dynamics. We’ve seen a modest reversion to the mean following the 2013 crash. A “normal” market with this sort of set-up would have more likely seen sideways “digestion” of over-bought conditions – just like February. But gold and silver are political metals.
Vampire Squid: China Behind 2013 Gold Crash
Goldman Sachs would have you believe the 2013 gold crash was the result of China hedging its physical gold. This thinking, and the general thesis that China has been the main actor behind gold price suppression seems to be attracting many converts. At least when it comes to the Vampire Squid message to the Muppet brigade, logic fails. The volume of contracts involved with the 2013 smashing was an order of magnitude greater than what would be required to hedge China’s physical gold and gold acquisitions. Furthermore, China isn’t buying to have a 6 month trading position. They’re buying on a 50+ year generational timeline. Think about it. Why the heck would China want to hedge — and certainly, what would be the point of hedging with short- and intermediate-term COMEX contracts? This is the most obvious fact that no one seems to have thought to address and conflating what goes on with China’s shadow banking system credit issuance backed up by warehoused commodity stockpiles is over-stating the linkage between gold and said shadow banking credit activity. Copper and iron ore? That’s a different story…
In any event, if you evaluate the 2013 crash, you’ll see that the key catalyst period was April 12 through April 15, when over 400 metric tons of paper gold was smashed through a few minutes of trading during that Friday access market period and later, early Monday morning. While China did buy quite a bit of gold in March, 2013 any such hedging related to that buying would have taken place well before the April 12-15 drive-by shooting. Furthermore, the roughly 1,000 metric tons of ETF-sourced gold was purchased primarily out of GLD share tendering AFTER the paper price was bombed. That ETF gold flowed primarily to China. If you simply place these events on a chronological timeline, it’s clear that it would be crazy for China to try to hedge purchases they had yet to make! The physical gold China was acquiring out of ETF and COMEX vaults was liberated during and after the initial price smashing. A great deal of the physical wasn’t available for purchase until *after* the smash. Sometimes sticking with very basic facts, logic and a forensic timeline is all one needs to turn Vampire Squid intellectual masturbation (propaganda?) on its head. If you want to dive deeper, we highly recommend an article Dave Kranzler penned: click here.
JPM Lawyer Dead:
Another person in the banking industry has met an untimely death. If anyone in our audience works with actuarial analysis in the insurance industry related to life insurance policies formulated for high level executives and might have insight on historical probability baseline data relevant to the seemingly unusual high number of bankers meeting untimely deaths, email me. I can be reached by joining “Eric” and “TheNewsDoctors.com to send an email. I’d like to get a handle on just how usual these events are.
We produced today’s show on Thursday. But in keeping with our tip for quality weekend reading and viewing, I highly recommend Stefan Molyneux’s interview with Dr. Paul Craig Roberts. They focus primarily on the Ukraine and Russia. Click here – it’s well worth your time.
See you next week — Eric Dubin
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