Ugh. Yuck. What an ugly day in paper metal. Almost makes paper metal seem worthless. Hmmm. Now there's a thought...
Anyway, sorry that this was such an ugly day. It certainly wasn't any fun and I don't think the shellacking is finished yet, either. We did, however, find some support today in an old, familiar place. Check out the chart below. Gold stopped and reversed almost right at the "gap open" of 8/7. You remember 8/7, don't you? That was the very fun Sunday evening following the late 8/5 announcement by S&P that they were downgrading U.S. debt. Anyway, having found support there once again, we now have a very clear line of demarcation to watch overnight and into the rest of the week. Gold is certain to test today's low of 1660 at some point. If that area holds again as a double-bottom, some spec buying may return and ease some of the pressure. If 1660 fails...which I suspect it will...it will be a clear signal that gold is headed to 1600-1610 next and, from there, could fall all the way toward 1550. Stay tuned.
A couple of other items that merit your attention. First, "Ranting Andy" published a lengthy missive today. In great detail, he covers the ongoing manipulation and then wraps it up with a solid summary of rehypothecation.
Next, this little gem was tucked away in the "contributor" section of ZH. IMHO, it should have made the main page:
Lastly there's this from the nonsensical CNBS program "Fast Money". James West of The Midas Letter was the guest. In a stunning development, Mr. West was allowed to make claims of central bank intervention/manipulation in the gold market. Of course, the goons that host the program completely ignored his comments and proceeded, instead, to focus on their pre-screened questions about copper, etc.
I'll leave you tonight with this: Many have remarked that I seem a little apocalyptic these days. I've even gotten some emails warning me to lighten up a little bit, otherwise I might scare off some new readers. I don't know if you've noticed but it's not just me. As you click around various PM sites, you'll start to notice that many are getting increasingly dire in their predictions. I can assure you that this is not part of some collusive plan to scare the bejeesus out of you. Simply put...we've all seen the warning signs for years and now those signals are blinking bright red. The latest addition to the House of Horrors is the otherwise calm and unflappable Patrick Heller. I've been reading and posting his stuff for years. I've never, though, seen him write something like this:
Look, maybe this will all pass. Paul Krugman will be proven right for once and we'll all live happily ever after in some type nirvanic eutopia. Let's hope so.
Just in case we don't...Prepare Accordingly. TF