OMG, facepalm #2 (twice in one day!)
once again, an investment thesis depending on the whims of central bankers whom you should trust the least.
When you're done breaking your nose, take note: CME raises margin requiremets 27%
Of course, they waited until gold was declining
just as with silver. However, the act has been much less effective than it was in silver three months ago. Leveraged investors are going to be knocked out of the game entirely.
This is systematic control of an asset. If that can't be seen, there's no amount of hard data that will convince such an individual. Statistical concentration had developed prior to the Frankendodd act being implemented on July 15th and was followed by an almost immediate ramp up in the price of gold. Now, a further removal of margin players from the pool while un
leveraged big money is statistically concentrated on the buy
side. As MatthewLM
pointed out, silver is in backwardation again.
The activity is subtle because the price action is so glaring. Looking at factors outside of the price action (and beyond even the volume) will take you down the rabbit hole. This is a shake-out to ensure the run on major banks that have obligations does not yet occur. They are holding the system together. Once that control finally breaks, gold will be impossible to obtain at any fiat-denominated price. Gold will be traded only
for real goods; other assets.
i remember so well from 2002-2009 guys like Eric Sprott and James Turk getting up to a podium and saying "why are central banks selling gold? oh well, we'll be happy to take gold off their hands. haha!!!". And the price kept rising.
From 2002-2009 they were right. They're still right.
so, i submit to you, now when they are buying, the price can very well keep dropping.
Let's get that logic straight:
- Biggest buyers sell and asset rises in spite of selling.
- Biggest buyers buy and asset is supposed to drop?
In the first scenario, demand overwhelmed central bank selling. In the second scenario, central banks are now part
of that demand. In what way does that portend a drop in prices?
You're going to get blasted and rush to reverse your positions at the worst possible time. Impatience will drain your trading account. If you insist on trading, take what profits you've made and put on a fully hedged position from here so it won't matter which direction the price goes.