Again James Turk comes out with an accessible explanation for the PM markets....Note that gold in CAD$s is not present but it is equally interesting. The point of these graphs is to show that a U.K. citizen who tracks a New York close in gold in US$s is missing the point...One fellow, a U.K. citizen, reported doing this and jumped into U.K. bonds because he saw the US$ price in gold doing a retrace (last year)...But he should have been watching the British pound. And I agree with Turk here that the U.K. will experience a currency collapse first.

The game is vastly more difficult for the cabal when gold blows past $1000US. In the meantime we have an interesting experiment going on with (I surmise) largely only paper in play to cap the gold price. I think this will go on until there is a default - probably in silver - at the COMEX. And what we have these past two days in the metals is another little intervention and a paper washout thru London and into the New York session. The efforts of the US government and bullion bank (Commercials) partners is very obvious and more obvious by the day. This effort will take gold and silver down to their recent lows (like last week) and may even last a couple of weeks....and then the traditional rally will take gold well above the $1000 mark....All dependent, of course, on the continuing decline of the USD - and the other currencies. We should note that the rigging games out of London are NOT that successful in lowering the pound gold price and we are going to be seeing that situation spread to the US,,,,and probably Canada too.

The other point that Turk does not mention is the very probable bogus data being published for gold and silver deliveries out of the COMEX....This is inferred in that there are few data that are real being published on the economy and the markets anywhere out of the US government and related (partnered) institutions. Again, when they list little to no interest in the metals in the vaults, it reveals to the public that there is little interest in them....All of the data is now probably corrupted. Gold and silver demand in the US and worldwide is huge and yet is not reflected in any of the American data.

I also wonder if the German central bank is going to get its 1700 tonnes of gold back from the US. Is it already gone or is it going to be in play in the months ahead?

This fall is going to open a lot of eyes! I think the cartel banksters are going to orchestrate another commodities take down...or a bank holiday for the Yanks,,,,currency exchange controls -SOMETHING drastic is in the cards....

And that should remove any doubts about Obama - who is about to experience the shortest honeymoon of any president in US history. We are actually watching the destruction of the institution of the presidency. The rage of Americans expressed during those numerous town hall meetings with their congress members is growing,,,and this we must assume is only the beginning. What we are seeing in the rebounding markets (and the US ones doing more poorly than elsewhere in the world) is a bear market rally after a 1929 crash....The correlation of the chart profiles of the markets in comparison then and now is 80%. These are early days yet in this crisis,,,and we are even hearing now that the financial system crisis is over!!!!!! Some of this from gold and silver pundits.

What these already angry citizens do not understand for the most part is that given the above, if the US government manages to throw enough money at the problem and are successful in heading off a deflationary depression, they will substitute a hyperinflation one in its stead. What they are doing is destroying their own currency. This is still a classic no way out for the west.

By early 2010 we will see the US$ hitting new lows on the FOREX, and the beginnings of civil unrest in the US and abroad. This will likely be worldwide,,,,but worse in the west than the east....And ALL currencies will be seen to be in trouble. Er,,,more trouble than now,,,,as gold, the ultimate currency is now rising against all of them.

And yet few realize that gold IS even a currency anymore!

GoldMoney Alert - 10 August 2009

Back Toward Support

Markets never move in a straight line. There are always some retracements in every uptrend and every downtrend.

So it is not surprising that gold and silver began this week with some 'backing & filling' to build support, given how well they have done since their July 8th low. In terms of US dollars, gold and silver have risen 4.0% and 11.7% respectively, which is enough reason for them to take a rest.

Another reason is the Federal Open Market Committee meeting scheduled for this week. A rising gold price during that meeting would make clear the hollow rhetoric coming from policymakers that inflation is not a problem, and no one at the Fed wants to be embarrassed like that. So enter the gold cartel.

Comex open interest and the short positions of so-called commercials has expanded by huge amounts over the last few weeks while the metals have advanced, which is just one indication of the gold cartel's activity. They keep selling paper promises to deliver gold in the hope that their selling eventually caps the gold price and sends it lower, giving the gold cartel the opportunity to profit by covering their short sales. As Bill Murphy, proprietor of LeMetropoleCafe.com recently put it: "When it comes to analyzing the rigged gold price, in the end, all that has mattered these past many years is whether the physical gold market can overpower the gold cartel's ability to hold down the price, regardless of price levels themselves."

In other words, the gold cartel can sell all the paper it wants, but the demand for physical metal is a force the gold cartel cannot control. The key therefore to deciphering the actions of the gold cartel is to watch the physical market. The gold cartel cannot overpower the demand for physical metal because eventually it has to make good on its paper promises to deliver metal.

But for now the gold cartel has won a minor skirmish in the ongoing war it is waging to keep gold from trading in a free-market unfettered by government-directed intervention. Gold cartel short-selling has sent the metals back toward support, and over the next couple of weeks the metals will no doubt re-group.

Importantly, the long-term picture for gold remains very bullish as the dollar continues to be debased by out-of-control spending by the federal government that is leading to record deficits, record amounts of debt and record monetizing by the Federal Reserve. These factors all suggest a much higher gold price in the near future, which is the same conclusion of the following charts.

Gold is not only doing well against the dollar, but looks ready to climb against the euro too. Most astonishing though is the gold chart in terms of British pounds, which looks like it is in the early stages of going parabolic.

I am bearish about the outlook for the US dollar, but this chart of the gold price in terms of pounds is making me re-think my view. This chart suggests that the British pound will collapse before the dollar collapses.

Silver too is doing well too. It is recovering in dollar and euro terms much of the price decline it suffered in the deluge of selling after the Lehman Brothers collapse.

Again, the charts illustrate that the British pound is the weakest currency. The red line marking resistance is not a downtrend line like it is in the silver charts for dollars and euros. Rather, it is the neckline of a 'head & shoulders' bottom. In this regard, the silver chart in pounds resembles the gold chart in dollars. Both look ready for prices to soar much higher, probably by September or October at the latest.

Consequently, we may now be at one of the last buying opportunities before gold climbs above $1,000 and silver climbs above £10. A 4-digit dollar gold price and a double-digit Sterling silver price may be just around the corner.

Published by GoldMoney
Copyright © 2009. All rights reserved.
Edited by James Turk