Its getting kind of tiring. After doing my own analysis I was expecting gold to go back down to $1348/oz then follow its bullish trend from August. But.... it broke through that resistance zone this morning quite strongly, down $42 so far. The seasonal pattern of gold doesn't appear like it is going to hold true this year. Although we still have over half of September left, the technicals are not looking good for a bull run as has typically characterized the month.
But I guess its to be expected. Not enough physical gold relative to whats traded, and what there is is locked up in vaults controlled by the same people. Its ridiculous that when the demand for physical gold is increasing, taking a further toll on the physical supply, we still see a dropping gold price. I know the common theme is that the bankers and government are trying to steer the world away from an abandonment of fiat currency and a debt based economic system, or that big money is trying to move physical gold from west to east in anticipation of the collapse of the western economies...(Whatever, lets just get the charade over with so I can make some money with a few horrendously undervalued PM stocks.)
If in fact it is situation number one, the manipulation of PM prices to stave off the fall of paper/debt based economies, it has me wondering...what is the long term plan? I mean, surely, such manipulation can go on for only so long. Is it to drive the price so far down that it appears as if gold is no longer a solid investment, effectively trying to show that the bull market is over? The fact that a large part of the global gold market is buying for their fondness of the metal itself, and not purely for its investment potential, is an important fact in itself. Demand exists and will exist. A major drive down in price would serve to render a large number of projects uneconomical, or only marginally economical, thus creating a smaller supply and more demand in the face of dwindling supply. Doesn't really make a whole lot of sense to me.
Too me, it is much more likely that we are witnessing the stage being set for a number of large, high winning, trades. The manipulation is clear. The daily chart shows the $1348 resistance zone was broken within a minute, with shares being dumped into the thinly traded late night market. We saw this the last time as well....large amounts of shares traded sold into the market late at night where there is no bulls around to defend the POG....not tremendously elaborate, but sneaky non-the-less.
We will have to wait and see if gold tries to relcaim that $1348 level or if it continues its down trend. If the later... I believe that we will see gold go down to the $1200 dollar level.
At least these big attacks leave a number of solid companies sitting around at nicely
discounted prices....Perhaps now, more than ever, it is time to find companies with world class projects and enough cash in the treasury to ride out the storm. Or, play the game the way the manipulators do. Either way, its a shame how many people have lost money investing under the idea of a freely traded market...myself included. But...there is little point, and no intelligence, in trying to play against the market.
I plan on doing a more in depth technical analysis/commentary on the fall of gold starting at the initial large take-down in April. This will happen soon, once I have a better understanding of golds next set of movements.Don't get your hopes to high up though....who really knows what going on...much less me.