There has been a familiar refrain among gold-bulls for the past few years, “if only the big-buyers would demand “delivery” of most of their gold, this would destroy the anti-gold cabal once and for all.” Consequently, a question which I (and other precious metals commentators) have often been asked is “why don't those big-buyers demand delivery?”

Naturally, this is a question which I have also frequently asked myself, rhetorically. The answer finally sunk-in, but only after I was able to put aside my own perspective on the gold market, and think like a big-buyer. On stock bulletin-boards (which I have been known to frequent), when the price of gold is knocked down by the cabal, and the shares in the gold miners take a consequent hit, “longs” are often heard saying that “this is just another good buying opportunity.”

It is a retort which rapidly loses its potency after you have heard it a few times, but what are you going to do? On down-days in the market, it's either whine or show a little bit of (false?) bravado. However, there are a group of players in the precious metals market who truly do look at all pull-backs in the price of bullion as “buying opportunities” - the big-buyers.

For purposes of definition, the buyers to whom I'm referring are central banks, funds, and the small number of wealthy individual investors who have the buying-power to make purchases on a similar scale. With average retail investors, we could buy our own lifetime's supply of bullion with a single purchase, and never cause even a ripple in the bullion market. However, the big-buyers face two related problems in attempting to fill their own “quotas” for bullion.

To use an extreme example, China's government almost certainly wants to obtain several, thousand tons of gold, since (as I have written previously) I'm firmly convinced that China's government is making plans for a return to a “gold standard”. Not only would it be impossible for China's government to ever buy that quantity of gold in one “gulp”, but merely making the attempt would launch gold into a vertical price-explosion which would dwarf any movements we have seen during gold's quintupling in price.

Keep in mind that the 200 tons of gold purchased by the government of India last year (as part of the ridiculously-hyped IMF sale of 400 tons of gold) represented the biggest single purchase of gold during this entire bull-market for gold. And in the early years of this bull-market, European central banks were foolishly dumping 500 tons per year of their own, precious reserves. In contrast, during the first nine months of the latest central bank “sales agreement”, these same central banks have sold less than two tons – and virtually all of that was required for the minting of coins.

As a result, the big-buyers literally need dozens of “buying opportunities”, and in the case of the government of China, hundreds of buying opportunities. Enter the anti-gold cabal. The same arrogant bankers who smugly once believed that they could control the gold market “forever” with the (once) vast hoards of bullion which they held are now beginning to comprehend the truth. All they have really accomplished is to allow the big-buyers the opportunity to buy all these banksters' gold at a tiny fraction of its true value.

As the saying goes, you never “kill the goose who [literally] lays the golden eggs”. Thus, while the average (small) precious metals investor, who could buy all his gold today would love to see “blood spilled” in the gold market – and lots of it; the big-buyers have a totally different agenda than those of us fixated on revenge (followed by lots of gloating).

In fact, far from resenting the endless machinations of the anti-gold cabal in precious metals markets, the big-buyers must certainly regard bullion banks as their “allies” - if not their servants. The U.S. government has had to spend $100's of billions to run its “protection racket” in the Middle East, where the U.S. military props-up the government of rich, corrupt sheikhs, just to get these countries to pump-out all their oil at the lowest, possible prices. Meanwhile, the big-buyers in the gold market have been gifted with most of the gold of Western governments – at rock-bottom prices – without even asking for it (let alone incurring any expense on their own part).

At this point, I'm sure many readers are feeling a considerable amount of disillusionment. The big-buyers are not the “white knights” who have come to slay the evil banker-dragons. Instead, they merely intend to 'ride' these beasts – until they eventually collapse with exhaustion. Following that disillusionment, a more practical thought comes to the surface: how does knowing this help us as investors?

Contrary to what many commentators (including myself) have written previously, the big-buyers have no intention of simply “marching” the price of gold higher, and certainly don't want to prematurely trigger the defaults which must eventually occur in the gold and silver markets. Instead, these buyers want the price of gold to be knocked-down again and again, and rises in the price of gold are not a desired result for these big-buyers, but rather an unwanted side effect of their purchases.

Does this mean that the price of gold could be driven back below $1000/oz, or $800, or $500? Definitely not. A look at an eight-year chart for the price of gold provides us with the parameters which guide us.

As we can see, there has been only one, significant “violation” of the crucial, 200-day moving average – and that occurred in 2008 when Wall Street ambushed the world's commodity-markets, following the assassination of Lehman Brothers. There are two reasons to believe we will never see a repeat of such an episode, at least with respect to what transpired in the gold market.

First of all, with so few of the Wall Street Oligarchs having survived the last “culling”, there simply aren't any more convenient chumps to sacrifice. Secondly, there has been a dramatic change in global attitudes toward precious metals in general, and gold in particular – which has been reflected in much stronger demand.

Despite the endless, silly efforts of the media propaganda-machine to portray the gold market as a “bubble” or to try to con investors into choosing banker-paper ahead of precious metals, a shorter-term chart of the price of gold clearly shows that the propaganda campaign has failed.

Glancing back to the eight-year chart, we see that in earlier years the price of gold closely tracked the 200 DMA. Looking more recently, at the two-year chart, we see that since gold recovered from the 2008 ambush it has tracked significantly above the 200 DMA for the last eighteen months, and (if anything) that spread seems to be increasing.

Does this mean that the price of gold will never pull back all the way to such long-term support – or at least not until it explodes into some medium-term or long-term chart? It's simply too soon to say for sure, as a year and a half does not provide us with enough data. There are two ways to interpret the behavior which is reflected in the gold charts.

One point of view is the “support” model. In this interpretation, the big-buyers have some invisible “line in the sand” (the 200 DMA?) which they will defend should the anti-gold cabal push gold to some “dangerous” level. More specifically, commentators have talked about a “Beijing put” in the gold market, ever since the Chinese government officially endorsed precious metals as prudent investments for their own citizens.

The second way of looking at the gold market is the “competition” model. In this model, there is no “defensive strategy” which guides the big-buyers, either individually or collectively. Instead, what we see in the charts is simply the consequences of ever more-fierce competition for obviously inadequate gold inventories.

Central banks have become net-buyers for the first time in decades. China's citizens (1/5th of the world's population) were not even able to buy gold for nearly 50 years – in the small quantities affordable to the average citizen. Now, not only do they have access to this market, but they have a vast hoard of savings to use in satisfying that pent-up demand and the official “blessing” of their government. Meanwhile, large fund-managers are publicly declaring themselves to be “gold bugs” (and gold-buyers) for the first time. The contrived “debt crisis” in Europe has now ignited retail demand there as well.

I personally lean toward this interpretation of the gold market, given the evidence gleaned from charts, as well as the persuasive views of people like the astute and influential metals-trader, Dan Norcini. Norcini claims to see a distinct shift in the “psychology” of the gold market – which reinforces the (much less-influential) conclusion which I had formed, myself.

What this likely translates into is the repetition of recent patterns: episodes of “choppy”, sideways trading, followed by a break-out to a new (permanent) price-level. However, investors cannot afford to become complacent, and assume that they will have plenty more “buying opportunities”- before gold truly begins its revaluation to its fair-market value.

There are at least two scenarios which could quickly eradicate the current pattern. First of all, the U.S. economy is rapidly approaching its “day of reckoning”, where the bankers either have to start releasing some of the trillions in (newly-printed) Bernanke-bills which they are hoarding, or else the U.S. will plunge into an irreversible deflationary spiral, which will quickly end in a Soviet Union-like implosion. However, if/when they do release some of this fiat-paper into the general economy, this could quickly and easily spiral in the opposite direction: hyperinflation. Indeed, the eminent John Williams of Shadowstats.com advanced his own prediction for U.S. hyperinflation to as early as this year.

Either form of U.S. economic catastrophe implies an upward explosion in precious metals (for entirely different reasons), however, there is also the distinct prospect of the gold market exploding higher on its own – again, as the result of two, possible events. While big-buyers don't want to trigger a default in the gold (or silver) market, the reckless-and-desperate banksters could easily accomplish on their own.

As Jeffrey Christian revealed in his testimony to the CFTC, with the anti-gold cabal having run-out of bullion to dump onto the gold market, they have resorted to a familiar tactic of their market-fraud: leveraging paper. Lacking real gold to use to depress the market, and with scam-ETF's like GLD only able to sop-up a small portion of total investor dollars, the bankers have used their private casino (the derivatives market) to illegally manipulate the price of gold.

Clearly, the gold market has not always been leveraged 100:1. Indeed, I would surmise that less than 1/10th of that leverage existed even five years ago. The problem for the banksters is that with any “maturing” Ponzi-scheme it takes exponential increases in leverage to prevent implosion. Thus, by next year the bullion-banks could be leveraged 200:1 in the gold market, and the year after that it could be 500:1.

If the banksters don't self-destruct in the gold market, they could simply run out of silver. As I detailed in my last commentary; supply, demand, and inventory numbers have been so ridiculously contrived in the silver market that we have no way of knowing (by examining the bogus “data”) whether default will occur five years from now, or five days from now.

Finally, all it takes is for one of the big-buyers to get greedy (or impatient), and to start buying “aggressively”, and that could trigger an instant “gold rush” in global gold markets. Should this occur, it implies gold (and silver) moving to fair-market value in the near term, which in turn implies default in those markets.

While “white knights” don't exist in the gold market, the reckless, scheming bankers are all too real. As I have pointed out several times before, such psychopaths frequently self-destruct before they are ever “caught” and held accountable for their crimes. Thus, we must always view the precious metals market as one where our “last chance to buy” could be today. Do not waste any time in filling your own quota for this necessary insurance.

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