I started my summer hours this week and rode early to beat the heat of the day. When I left at 7:00 am gold was up $1.20. When I returned I saw silver down .28 cents and gold off $4 so I figured some sort of shenanigans. The dollar was weak when I left and weaker upon return so it had nothing to do with the dollar. Then I read this…$3billion worth of gold sold …again for perspective, this is nearly 4% of global production or almost two weeks worth. And again, who would sell like this if they wanted the best price for their gold?
Fast forward 30 minutes and gold is now positive for the day. Over the last few weeks we have seen weakness early in gold and strength toward the close. This is a big change. A much BIGGER change will be if gold can hold positive for the day and maybe even close stronger. This would be if my memory serves correctly, the first time a massive amount of paper raided the market which then closed the day positive. Also keep in mind how many “new” contracts (fake supply) it has taken to keep gold’s rise in check.
As Jim and I have said, we are at major inflection points in many (all) markets, a strong gold close today followed by a breakout from here would be a very bad signal for paper markets. An out of control gold market will spell doom for paper markets and lead to the plug being pulled! Monitor this closely!