Below is a fascinating email from a KWN readers which shows gold bears must hibernate or die. Plus a top analyst out of London says there is “no escape for the bullion banks.”
Within hours KWN will be releasing an audio interview. Until then…
September 18 (King World News) – Fascinating email from KWN reader Kevin W: For what it’s worth, on June 30, which marked the close for the second quarter, Gold closed at an all-time quarterly high. A massive spike in the price of gold followed shortly thereafter. (See chart below).
Gold Bears Must Cover Soon Or Get Squeezed
September 30 (3rd Quarter close) only needs to close above $1,793 to make a back-to-back occurrence. This would also that signal another major blastoff would be at hand. Given that RSI on quarterly charts has not been anywhere near 89-90 when gold topped in Q1 1980 or Q3 2011 let alone Q3 in 2008, the month of October stands to be a month where bears must hibernate or die.
Despite Volatility, Gold Has A Long
Way To Run On The Upside
No escape for the bullion banks
Alasdair Macleod: Commitment of Traders figures released this evening show that the Swap category (bullion bank trading desks) are still short a net 570 tonnes of gold, which is worth $35.8bn. Open interest increased 21,468 contracts, the majority fuelling spread positions. Nevertheless, the Swaps’ net short position increased by 3,382 contracts, while the Managed Money category (hedge funds) increased their net longs by 6,806 contracts leaving them net long of 111,098 contracts, which is spot on their long-term average position. The action is summarised in the table below.
It is a very delicate position for the bullion banks, who are under the cosh of their lords and masters to reduce their positions. But every time they try to dip the price buyers quickly push it up again. Their only hope seems to be in prayer…
Watch China: there is a change of policy on the dollar.
In the wake of the Fed’s promise of 23 March to print money without limit in order to rescue the covid-stricken US economy, China changed its policy of importing industrial materials to a more aggressive stance. In effect, she has decided to start dumping US Treasury bonds and dollars. As much as she is buying necessary commodities, she is getting out of her nearly $3-trillion dollar position. Other foreigners are certain to follow and on the most recent Treasury TIC figures, foreigners own $20.5 trillion in securities and a further $6 trillion in cash and short-term bills. That is 130% of current US GDP.
When foreign importers dump their dollars there are two broad outcomes. Either the quantity of dollars in circulation contracts as the exchange stabilisation fund intervenes to support the exchange rate, thereby taking them out of circulation. Or they are bought by domestic buyers, at the expense of the exchange rate but remaining in circulation. It should now be apparent that attempts to maintain the exchange rate and at the same time accelerate monetary stimulation, which is the Fed’s post-March policy, are bound to fail.
It is therefore only a matter of time before a full-blown dollar crisis ensues.
Within hours KWN will be releasing an audio interview. Until then…
Michael Oliver – Gold Readying To Blastoff
***ALSO JUST RELEASED: Michael Oliver – Gold Readying For Largest, Most Significant “Thunderbolt” Bull Move Higher CLICK HERE.
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