With crude oil trading down to the lowest level in nearly 4 months, today James Turk spoke with King World News and issues a warning about the action in the gold and silver markets.
Gold & Silver Weakness To Continue
James Turk: “Gold and silver were both pretty quiet today, Eric, but neither metal had a chance of doing much given what’s happening this week…
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James Turk continues: “First, on Tuesday option expiry begins on the Comex, followed later in the week by the expiry of over-the-counter options. We’ve seen time and again how the shorts, in cahoots with central planners, drive the gold price as low as they possibly can during expiry. Their objective is to get as many call options expiring worthless so that the shorts do not have to deliver on these paper promises.
Banks Pushing Gold Below $1,300 Tomorrow Because Of Options And…
It’s worth noting that there is a huge open interest in options with a $1,300 strike price, so that is the obvious target. The shorts and the central planners will no doubt do what they can to pressure the gold price toward $1,300, or perhaps even under that level if they can get away with it. If they do, the calls at that $1,300 price end up worthless by expiring out of the money. We saw some of that downside pressure earlier today in Asia and Europe, though the metals later bounced back a bit off the lows of the day.
…Also Because FOMC Starts Tuesday And…
Second, the 2-day FOMC meeting begins Tuesday. Then, after the meeting concludes on Wednesday, Federal Reserve Chair Yellen is holding a news conference. Gold rarely gets an opportunity to rally on these occasions.
…Also Because Speculators In Gold & Silver Are Vulnerable
Finally, Friday is month-end, so there may be book squaring by traders. Given the large open interest in both gold and silver, it is obvious that a lot of specs have jumped in and bought this month. The odds therefore favor downside pressure as traders window-dress by dumping losing long positions before preparing their books for month-end reporting.
But Use Manufactured Weakness To Accumulate Physical Gold & Silver
As a consequence, we may need to wait until next week for gold and silver to resume their uptrend. It also means that this week is likely to be a good one for buying both gold and silver, particularly if there is any weakness providing the opportunity to pick up some bargains.
But what if the metals aren’t weak this week? Any price strength this week, especially in view of the headwinds the precious metals are facing, will be significant. Signs of strength – like holding support or rising prices – are always significant, but more so this week because of well-established historical trading patterns that suggest gold and silver prices will be weak over the next several days.
Any real show of strength in the face of expected price weakness means a significant change is in the wind. It will be evidence that the central planners are losing their grip on precious metal prices. So strength this week will provide more meaningful evidence that the 5-year correction in precious metal prices is indeed over, which is already clear given what gold and silver have done so far this year.” ***KWN has just released the remarkable audio interview with Gerald Celente and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
***Also Just Released: Gerald Celente Warns This Will Be The Last Great Opportunity To Buy Gold& Silver Click Here.
***KWN has also just released the powerful audio interview with the man who helps oversee more than $90 billion CLICK HERE OR ON THE IMAGE BELOW.
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