Gold has broken out and is holding its level above the high set in the aftermath of the Trump election upset. Silver is holding its level on the 18 handle.
Now gold seems to be consolidating, most likely for the attempt to push higher to take on the intermediate highs and resistance around 1370-1380. More pullbacks to test the breakout are not unexpected.
As you know, myself and others who have done some impressive investigation suspect that the ‘free float’ of gold in NY and London has become dreadfully thin, thanks to the long campaign to suppress the gold price on the world markets using the paper leverage on the Comex. Physical gold has been flowing to Asia for some time now, in excess of new production.
Why would anyone wish to manipulate the price of gold and silver? On the simplest level it is a way for the financiers to make money.
But secondarily, gold and silver stand as pillars of value, at a time when shaping policy and printing money to benefit an elite of cronies is the fashion. As a direct result the organic growth of the economy continues to falter thanks to policy errors. The Fed and the Bank of England are creatures of the banking system, and have failed miserably in their roles of public servants and sound regulators.
If and when this latest ‘gold pool’ breaks, as they all must do at some time, we can expect the price of gold to spike higher in a sustained rally as the market seeks to reassert a more realistic clearing price. The rally will be driven by those who realize that the jig is up, and they must scramble to deleverage and cover.
We may experience a severe price test, especially for silver, if the equity market suffers a major selloff. I would most likely sit back and wait for it to find its level, and then come in and buy some more metal in my trading account. Unless the government takes action against them, the metals look ready to perform their traditional roles as safe havens.
