There Is Still Hope for Us Yet. GME & EXL should be rewarded when the gold cartel fails?
Gold Dealers Bomb US Gold Market
Price drops from $318.50 in Asia to $311 in the USA
By
James Sinclair
Gold investors/traders were shocked this morning by the drop in gold prices
under relentless gold lease conversion dealer selling in the US. I have said,
time after time, that this is a Battle of the Titans devoid of any public
between the gold dealer's derivative cartel versus Asian bullish interest.
Once again you see this war being fought as if it were a last ditch attempt at survival.
Well, it is!
This is not a war to prevent a melt down in the $300,000,000,000 gold
derivative pyramid but a war to prevent a crack in dike of
$72,000,000,000,000 total notional value of all derivatives granted on all trading items.
It is a market axiom that if one form of an item fails, pressure
builds gradually on all other forms of the same item i.e. derivatives.
That means if the gold derivative fails then you can be sure you will have
significant pressure on equity derivatives, thence interest sensitive
derivatives, thence last risk bond derivatives and so on. Because of this
fact, you can expect that this war will be raged every day for the
foreseeable future with the forces of the short gold derivatives facing off
the forces of the Asian longs that have been buying all the sold gold for the
last five years. The hope of the gold dealer derivative short is that if they
can fight the good fight each day then in time everything in the world of
markets will come right for them. Will it? My answer is absolutely, NO! This
Bear market in equities is not short term. It may well be sold out in certain
sectors, but probabilities do not support a significant economic recovery
starting before mid 2004. There is no chance, IMO, that the
gold cartel can keep up their efforts to sell as much gold as they have been
selling every day for the next two years. What is being forgotten is the Asian
Bull Interest is the answer to the question, "Who bought all the gold sold by
all the gold producer hedgers, the gold cartel and every gold bear for the
past 5 years." Gold fundamentals, as I have outlined to you are, IMO,
improving daily. Look at the commodity market to see the birth of the
long-term bull market in the making. In my opinion, bonds will top out in
November. The dollar is having another heart attack. JPM just broke down from
its up wedge, which I believe indicates a test of the recent low. I know this
comes at a hard time for public gold bulls, as Bob Prechter is advertising
his deflationist - gold bear thesis, which I don't support as correct. If it
were correct, why has Japan been the largest consumer of physical gold over
the past two years whilst in an undeniable and continuing deflation period? I
believe we are in a gold bull market that is both long term and headed for
substantially higher prices, regardless of the life or death play being made
now by the gold dealers cartel. The gold Cartel is fighting a brave fight but
is going down. |
