Similar to the Fed’s price-management of oil, the Fed has been keeping gold pinned under $1300 since early November in an effort to prevent a rising price of gold from undermining the dollar’s reserves status and signalling the escalating economic and financial distress in the U.S.

It appears currently that the western Central Banks are having a difficult time keep a lid on the price of gold.  The elevated level of Privately Negotiated Transactions and Exchange for Physical transactions – both of which facilitate settlement of Comex gold contracts off-exchange, privately and out of sight – is an indicator the banks are struggling to settle gold contracts with deliveries from the amount of gold available on the  Comex.

Given group-think and the determination of policy makers to do ‘whatever it takes’ to prevent the next market ‘crash,’ we think that the low-volatility levitation magic act of stocks and bonds will exist until the disenchanting moment when it does not.
And then all hell will break loose…

Central Banks ran out of silver to unload on the market a long time ago.  As such, they’ve had to resort to using paper derivative silver in the form of Comex futures, LBMA forward and OTC derivatives in their effort to cap the price of silver. In the last year, the amount of paper silver sold short against the available supply physical silver has grown into an astronomical number.
At this point the banks can only pray that less than 1% of the longs each delivery period will continue to settle the contracts in cash…

The weekly Commitment of Traders report released Friday showed that the bullion banks continue to cover their net short positions in both gold and silver rather aggressively and the hedge funds are unloading long positions and piling into the short side.  
Historically, this has been a set-up for big moves higher in the sector.

A new gold futures contract is being introduced by the Hong Kong Futures Exchange (two contracts actually).  The two contracts will be physically settled $US and CNH (offshore renminbi) gold futures contracts.   The key to this contract is that it requires physical settlement of the underlying gold, which is a 1 kilo gold bar.

Play

PM Fund Manager Dave Kranzler Joins the Show to Break Down the Big Move in the Metals & Markets: 

  • “It Smells Like Desperation”: Is The Day of Reckoning Almost Here?
  • Kranzler Believes If You Don’t Have Gold, You Have A Problem…
  • Kranzler Warns If the Dollar Does This, “All Hell Could Break Loose in Markets!” 
  • The Fund Manager Reveals His Outlook: Don’t Expect to Find Gold and Silver Bargains in July! 

A Must Listen Metals & Markets Begins Now! 

Look at it this way with regard to your bond funds:  you are not earning enough interest on them to make a difference in your lifestyle, so why bother taking on the high risk of a big hit to your invested capital.
Currently, you should be concerned about the return of your money as opposed to the return on your money.

The household debt statistics show a consumer that is buried in debt and will likely begin to default on this debt – credit card, auto, personal, student loan and mortgage – at an accelerated rate this year.  The delinquency and charge-off statistics from credit card and auto finance companies are already confirming this supposition: