The Paper Gold Shorts Are Desperate To Go Long…

Today, US CPI came in a little better than expected, not that a few decimals mean anything. Gold was marked down $35. So what was that about?

Quite simply, the bullion bank traders know that gold is going to go much higher and want to go long in the paper market. Physical supply is being cornered by central banks, sovereign wealth funds, and UHNW individuals, particularly in Asia.

The reason they can hit the price is that they are not being challenged in paper markets where speculative interest has died. See the turnover on Comex, below.

Not only has volume died, but Open Interest has collapsed toonly  418,000 contracts. See below:

The Holy Grail of Inve... Zook, Christopher Best Price: $3.41 Buy New $10.45 (as of 10:47 UTC - Details) Unchallenged, the bullion bank establishment can easily bash the price down towards $1950. But they are unlikely to pick up much in the way of net longs because the speculators are out of the market. If anything, demand for physical will undermine their overall position.

The point to bear in mind is that it is not about implied interest rates, which is the phony justification for banging the price. It is by the dangers of runaway debt threatening the value of credit, including the fiat currencies. Therefore, this markdown is a heaven-sent opportunity for investors and others truly aware of the prospective fate of the dollar to get the hell out of it.

Don’t be spooked!

Reprinted with the author’s permission.