On the heels of gold tumbling $90 in early trading and silver plunging 8%, market veteran Alasdair Macleod told King World News that a big correction in gold and silver is not on the horizon, despite today’s pullback, and that a spectacular short squeeze in still in the cards because of a game-changing market shock.

A (small) correction in gold and silver
August 11 (King World News)
 – 
Alasdair Macleod out of London, exclusively for KWN: 
The intraday peak in gold was at $2,075 on Friday before profit-taking set in. It has continued this morning in European time, at the time of writing hitting a low of $1,984. The question arises as to whether this is the start of a larger correction. In judging this, we need to take a step back and reiterate some truths:

  • The bullion banks are horribly short and welcome any opportunity to encourage a reaction so they can close their positions. But, 
  • Having missed the market, the hedge funds are not participating, and so there is no one to shake out by triggering stops. The thought that a new downtrend could encourage hedge funds to short the market is a long shot that ignores accelerating money printing.
  • On any reaction, there are growing numbers of market participants looking for physical, and London has none available. Standing for a Comex contract delivery will be encouraged by any dip in the gold price.
  • The banking system is bust, only very few people realise it yet. But increasingly, systemic risk will be an issue. Do you want money in the bank, or physical metal? It will be a no-brainer.

Silver Squeeze Coming, Despite Pullback
Silver is very interesting and a lesson for us all. There is one big ETF (SLV) which accounts for just under half London’s vaulted bullion stocks. The rest is held by industrial users. But ordinary people are flocking to SLV, and there is little or no bullion for SLV to buy. Result: a spectacular systemic bear squeeze.

Conclusion: in the current monetary climate there are many of us who would pray for a decent setback to correct the error of not buying earlier. That is why it probably won’t happen.


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***To listen to the powerful audio interview where Alasdair Macleod discusses the possible collapse of the LBMA, trapped bullion bank gold shorts and much more click here or on the image below.

Fred Hickey On Gold & Silver, Reflation Boom, Fascinating Email
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