Let me stress (strongly) that this piece is intended as an educational exercise and not as any sort of “buying recommendation.”
As the price of gold surges toward $1640/oz, and silver leaps above $29; what we are seeing in the market today is a short-term, technical break-out with gold and silver. Regular readers know that my normal reaction to these mini-events is “so what?” Short-term “T/A” has no statistical relevance (at all) – it merely indicates in which direction it is currently easier to push/pull the Sheep.
What makes today different?
1) Fundamentals continue to get much stronger.
2) A steady trickle (and now deluge) of banker rhetoric that more money-printing is on the way.
3) The “strong season” for gold and silver is almost here.
4) Longer-term technical factors (which are somewhat reliable) have now begun turning higher for both gold and silver.
Add all those substantive factors to this relatively meaningless short-term break-out, and suddenly we see why we should be paying closer attention this time. However, for many investors we’re still back where we started: the market might continue to go higher (since that’s where it’s clearly pointed); or we might have the bankers succeed in stuffing prices back into their trading-range again.
Thus what investors are really searching for here are “meaningful clues.” Are there any indicators which would suggest what might happen next? The short answer is “yes.”
Understand that the bankers know that they will soon have to abandon their “defenses” at current price-levels. However, what they want to avoid is having a “retreat” turn into a disorderly “rout” – i.e. we see gold and silver prices go ballistic, and attempt to (finally) catch up to three decades of manipulation in one rally.
Readers must also understand that as The Great Manipulators that no one studies the charts closer than the banksters. It is their Religion; since it is also their primary tool for leading the Sheep around by the nose. There are two patterns which would/will substantially frighten the banksters – since either picture would suggest their “retreat” was turning into a “rout”.
The one pattern would be if gold and silver suddenly start ripping-up the market with huge, daily moves. Not only does such dramatic price-movement take gold and silver to much higher levels in a hurry; but it’s precisely the sort of market scenario which would draw in huge numbers of gamblers on the long side – dazzled by the potential for fast/easy gains.
The other scenario which is equally frightening to the bullion banks would be to see a steady-but-steepening upward curve. In other words, instead of seeing huge gains being racked-up early; we see steady, daily gains – which gradually get larger and larger. While this picture isn’t quite as terrifying to the banksters over the short term as the first scenario, it’s actually more frightening from a longer term perspective.
The second pattern represents an exponential growth-curve of steadily building momentum. Thus after weeks (months?) of steady, regular gains; then we would start to see a stream of larger, daily moves. Ultimately the second pattern implies even higher prices over the medium term – and thus would draw at least as strong a response from the banking cabal.
Veteran investors in the sector all what that “response” would be: another massive ambush intended to destroy momentum, and kill-off any current rally. Given the enormous “base” built-up over this 18 months of sideways trading; it’s highly unlikely that any banksters ambush could “kill” the next rally in the sector (which is long overdue). However, this does not mean that these Assassins couldn’t do some significant short-term damage to these markets – and set-back prices for a few weeks, or perhaps even a month or so.
Perhaps counter-intuitively; the safest, most-secure upward path for gold and silver would be a rather lazy drifting higher in prices. This would be seen by the bankers as a very benign way of giving ground – primarily since they wouldn’t see their own, massive “short” positions be whacked as hard. Conversely, it’s precisely because gold and silver have been held back for so long that such a gentle move higher is highly unlikely.
Rather, these are markets looking to heat-up – like a race horse that has been kept in the barn all winter. Thus my own suspicion is that somewhere “sooner” rather than later there will be a significant effort by the bankers to again “slam the brakes” on the sector, most likely prompted by either large/fast gains, or the beginning of a clear, exponential pattern.
Ultimately we are playing hunches here, and absolute certainty is impossible. Those who have been waiting to buy bullion for an extended period seeking “the right price” would be well-advised to do at least some of that buying now. There is no excuse for being caught holding a big wad of cash – waiting for the Perfect Price – only to see the market take off without you.
Conversely, those who have been buying steadily need feel no panic that they must “act” (decisively) now. This is why as investors we seek to position ourselves in markets early. Once we have done so we have the luxury of being much more selective in doing our buying.