collapseAlasdair Macleod is preparing for the worst…

fedGold and silver had a down week, correcting some of their overbought condition.
It’s obvious that after a run up of $250 from the December lows, some price consolidation would be natural.
The consolidation so far has only been relatively minor, testing the 55-day moving average currently at $1250, with real support coming in at the $1200 level:

obamaPresident Obama weighed into the Brexit debate on his recent visit to the UK, saying that if Britain left the EU, she would be at the back of the queue when it comes to a free trade agreement.
As for T-TIP, it is an ugly acronym for an unworkable arrangement, and it should be consigned to the trash-tip of history’s failed projects.

dollar goldThe Fiat Money Quantity continues to rise at an accelerated pace, and now stands at $14.286 trillion
It would appear that this increase in bank lending indicates financial difficulties in the non-financial sector.
It looks like a condition of developing stagflation…

rocketSilver’s outperformance has the clear characteristics of a bear squeeze.
What is hidden from us are the off-market deals in physical, OTC and forwards, which on the basis of silver’s performance this week, indicates an overall shortage exists despite being overbought on Comex.

Chart1 07042016.tifIt is commonly assumed that the gold price and interest rates move in opposite directions. Like all assumptions about prices, sometimes it is true and sometimes not.
The market today is all about synthetic gold, gold which is referred to but rarely delivered. The current relationship is therefore one of relative interest rates, because positions in synthetic gold are financed from wholesale money markets. This is why a rumour that interest rates might rise sooner than expected, if it is reflected in forward interbank rates, leads to a fall in the gold price. To the extent that this happens, the gold price has been captured by the modern banking system, but it was not always so

goldThere is a widespread and growing feeling that financial markets are slipping towards another crisis.
Now is the calm before the storm, a storm which in the absence of a good grasp of price theory, central banks are simply not equipped to weather.
The only shelter for individuals is sound money, money that cannot be expanded by governments and their licensed banks, which is gold and silver.

gold

Yesterday was 2016’s first quarter-end, and gold has had the best first quarter since 1974, rising 16.3% in dollars.
The abject failure of expansionary central bank monetary policies is becoming more obvious by the day, placing a floor under the gold price.  There is bound to be a growing realization that seeking refuge in fiat currencies is a false hope, and the timing of that realization should lead to higher gold prices in due course.

Last week, the ECB extended its monetary madness, pushing deposit rates further into negative figures.
Any Frenchman with a knowledge of his country’s history should hear alarm bells ringing
. The ECB is running the Eurozone’s money and assets in a similar fashion to that of John Law’s Banque Generale Privée (renamed Banque Royale in 1719), which ran those of France in 1716-20.

The scheme at its heart was simple:

goldThe most likely explanation for silver’s sudden spurt is a combination of poor market liquidity and a revival in demand for industrial metals. The rise in industrial metal prices was wholly unexpected in western capital markets, and may be due in part to unexpected Chinese demand, as stockpiled dollars are dumped in favor of stockpiling key metals.
The strength in industrial metal prices, as well as that of crude which is up 50% in five weeks, augers well for precious metals in the coming weeks.

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Buy Silver Kookaburras at SDBullionWith Super Mario Draghi dropping a bomb on global financial markets Thursday, Doc & Dubin welcomed Alasdair Macleod out of London back on the show to break down the implications for the markets, gold, and silver:
On Draghi’s Bazooka QE: “It’s actually quite terrifying…

On Gold:  There is a Golden Cross Underneath a Rising Gold Price, as well as a Pennant Formation!  We’re looking at a minimum gold price of $1400, and it could happen quite quickly…
Full MUST LISTEN Metals and Markets is Below: