On Friday gold closed at $1325 despite the daily price interventions of the the anti-gold cartel. One particularly nasty attack was on Wednesday when "someone" dumped $1.1 billion notional of gold contracts within a minute during Asian trading hours. Zero Hedge wrote an article about it titled "Gold Flash-Crashes Below $1300". I know that there are still many victims of mainstream media propaganda who believe the sermon of the integrity of the markets. A visit at gata.org can serve as enlightenment. An Internet query on global banks and price manipulation will help to understand the extent of the market manipulation. Since 2010 banks have been fined more than $300 billion for rigging markets. The United States government has two official agencies tasked with global market manipulation, the Exchange Stabilisation Fund and the Working Group on Financial Markets. Additionally, in the US Treasury, there is a so called "War Room", busy with economic warfare on the rest of the world through interventions in the financial markets.
Craig Hemke from TF Metals Report spent some time thinking about the correlation of the JPY and the gold price. As far as I understand, he believes that hedging of gold price manipulators in JPY is the underlying cause. I have a different take on this. The Bank of Japan is monetising Japanese government debt. It can be expected that the highly educated Japanese understand that this will ultimately destroy their currency as it did before. The obvious protection is ownership of physical gold and silver. The Bank of Japan is determined to discourage this by weakening PM prices every time the JPY weakens against the USD. The US government is quite happy with this intervention as it takes some work off its hands.
On 16 June 2017 Safehaven published my article "Another Crazy Conspiracy Theory About PM Manipulation". I wrote:"When will the gold price suppression end? It is ending right now, before our eyes. Retail buyers have finally understood that central bank price smashes are like Happy Hours in a nightclub. It means that the "SALE" signs go up and gold is offered at a discount. At the current intensity it is impossible to hide the manipulation. It is just so obvious. A manipulation that is recognised as such does not work any more. Price smashes now attract swift buying. This defeats the object and makes it impossible for the manipulators to cover their naked shorts without creating a massive spike in the price. It is evident to me that the current price suppression regime broke within the last six weeks precisely because investors learnt to buy when central banks sell." This is exactly what is happening right now. The driving force is the strong demand for physical gold. According to my calculation Chinese and Indian demand alone exceeds global mine supply. Add to this your projection of demand from the rest of the world and you will see that demand for physical gold exceeds mine supply by a very large margin. This demand overhang has been in place for at least the last five years. The anti-gold cartel has been successful in camouflaging this by dumping gold contracts on the COMEX.
What can we expect from the gold price in the near future? The demand overhang in physical gold will put upward pressure on the price. The daily interventions only interrupt the upward surge of the gold price for minutes or a few hours and trigger dip-buying. I expect the USD to fall further after the encouraging statement by US Treasury Secretary Steve Mnuchin that a lower Dollar is good for trade. I would also like to refer my distinguished readers to my article about this subject titled "The Yellen succession and the value of the Dollar". A weaker Dollar tends to boost the gold price. Disappointing economic data will reinforce this effect. I expect the Federal Reserve board to be extremely dovish in this context. There is a good chance that gold will get to $1400 by the end of September.
By Sam Brown for Safehaven.com