Another week draws to a close, and we see what can only be described as “building momentum” in the precious metals sector. This improving momentum comes in various forms.
To begin with, we have seen a modest but distinct shift in sentiment within the mainstream market – i.e. the Realm of the Sheep (and the Sheep-Fleecers). Specifically, “bad news” which used to always send gold and silver prices lower on the day is now often sending prices higher.
The reason for this is that (as absurd as it was) the mainstream media had previously been able to sell the myth that gold and silver (the world’s ultimate Safe Havens) were “risk assets”, and thus the Sheep were supposed to sell their gold and silver on bad-news days. However, in markets which are totally ruled by the Big Buyers (not the Big Shorts), the Big Buyers have decided that this mounting “bad news” is a certain indication that another huge round of (official) Western money-printing is on the way.
This conviction amongst these “strong hands” has meant that over the past two months when the bullion banks have tried to push gold/silver prices lower on bad-news days that we are now frequently seeing bullion markets strongly reverse in their daily price action. These are nightmare scenarios for the Banking Cabal in every respect.
1) These strong, intraday reversals are extremely bullish “technical” indicators; unmistakable to both veteran traders, and even novices looking for the next “bandwagon” to jump on.
2) It makes the propaganda-machine itself look totally absurd when they write their morning script that “gold and silver prices go down because of bad news” and then three hours later they (are forced to) write that “gold and silver prices go up because of bad news.”
3) Every one of these reversals not only does the bullion banks significant financial damage, but (more importantly) it torpedos the legions of idiot-shorts who follow the bankster propaganda, and pile into the market each time they see the bankers launch a new attack. While the bullion banks have access to essentially infinite amounts of freshly-printed paper, their “followers” do not.
For all these reasons, this has forced the bullion banks and Corporate Media to start playing defense. There have been no serious attempts to drive prices lower in recent weeks (since they have all back-fired). Rather, efforts are clearly being focused much more on capping prices; preventing any obvious technical “break-out” which would send even more-bullish signals to the mainstream marketplace.
The marked deterioration in our economies and the corresponding likelihood of much more (highly-inflationary) money-printing mean – sadly – that fundamentals for precious metals are getting significantly stronger. Meanwhile, we are mere weeks away from the traditional “seasonal strength” for gold and silver. For all these reasons, we see a host of seasoned commentators in a growing consensus that “the next rally” fast approaches.
So this is the time when all genuine gold-bugs and silver-bulls should be “loading up” on bullion. Right? Wrong.
Remember what I have written frequently in previous commentaries. We are buying bullion because we are “playing defense.” When one is playing defense this directly implies that we are not engaging in any aggressive actions. Thus as a matter of general strategy, we never attempt to anticipate moves in the market, but rather we react to them.
Given that we are living in the most-manipulated markets in the history of human commerce, avoiding attempting to out-guess the market is simple common sense. In fact, it’s at times of mounting exuberance when the banksters are most likely to mount their strongest attacks. Manipulation works best if you’re able to catch everyone “leaning” in the wrong direction.
This is why myself (and many other voices within the sector) are gravitating increasingly to some variation of “dollar-cost averaging” for bullion-buying, where investors make regular investments of (relatively) fixed dollar amounts. If the price happens to be (relatively) “high” when you make a particular purchase, then your fixed dollar-amount means you buy less ounces. Conversely, when prices are (relatively) low at the time of a purchase, the investor obtains more ounces-per-dollar.
It’s not a perfect investment strategy, but it achieves three desirable objectives:
a) Investors don’t get burned making a “big buy” at some short-term peak in the market.
b) Investors do get some very good buys, when their regular purchase coincides with some trough in the market.
c) Investors avoid “deer in the headlights” syndrome, where they keep waiting for the “perfect time” to make a purchase, only to see the market suddenly shoot higher – while they are left holding nothing but ever-depreciating cash.
As Friday winds down, we see gold settling at around $1620/oz, while silver is on track to hold above $28/oz. Not surprisingly, even the price-action is starting to look rosier, as we see increasing signs of “buoyancy” in the market – meaning that prices appear to “want” to drift higher.
Encouraging, but nothing to “bet the farm on”…