We have a most unusual situation on our hands...
Private Investors and Eastern Central Banks are mopping up record amounts of physical gold and silver in the midst of the largest currency war/ monetary collapse in human history and some how the large western banks are dropping their price targets and telling the public that its time to sell; are they lying to you? Lets look at the facts.
- We have such demand for investment grade metal that the US is on target to use all of its domestic mining supply in 2013 just to fill the sales of silver eagles.
- The Eastern Central Banks and lesser developed nations of the world are continuing to move their Currency holdings into physical metals at an alarming rate.
- The Precious Metals bull market has been ongoing for 12 years now, unlike any other bull market in recent history. Sounds more like a manipulated, managed retreat than a function of the free market. Prices seem to be continually chopped way down with enormous sales on off market hours.
- Every major developed nation on the planet is debasing their currency at alarming rates. If you look at the M1 (base money) charts they are beginning to go parabolic which throughout history has always led to huge inflations and currency collapses.
- Germany and other nations are beginning to ask for their physical gold back from the NY Federal Reserve and they have to spread the shipments out over several years. Actually the numbers for annual US gold mining production match almost perfectly with the alotted time frames in which we've agreed to pay back Germany its gold holdings.
- When asset management companies like Sprott run the yearly supply and demand numbers they've found that someone must be dumping large quantities of gold into the market to supply the vast demand, thus keeping the price from rising sharply.
- There have been several long corrections in the 12 year bull market all of which lasted about 18 months. We are now at about the 18 month mark since the high in 2011.
Yesterday, April 9th many techinal analysists concluded that the metals markets had most likely bottomed, meanwhile the gold and silver prices surged even with record short positions from the large banks and hedge funds (who are usually behind the curve). It seemed as though the markets had finally taken control and moved the price in its appropriate direction. Then today, in what seemed like an attempt to curb the run Goldman Sachs, Citigroup, and other large banks all issued statements cutting the price target for gold over the next two years, as well as saying its time to short the metal.
At the same time the FOMC Minutes were released early via email (kind of strange) saying that the Federal Reserve may exit their QE before the years end, and thats not all. Meanwhile the Bank of Cyprus stated that they were going to dump $400 Million of their gold reserves onto the market to raise capital for their bailout. I Think that all of those releases happened rather perfectly the day after Gold and Silver blew the socks off of the Marketplace.
Now delving deeper we see (in the previous article) that there are a mere 632 long silver contracts currently standing (as opposed to 29,580 in February of this year), and a whopping 22,383 short positions up from 2,922 on February 5th. If these markets had continued their run through today the amount of short coverings and new long positions would have propelled the markets possibly beyond the control of the manipulating agencies. That is why such drastic steps were taken on such short notice.
