Plowing The Field
At this time of year, the first step in preparation for planting is to plow the field. Turn the soil upside down so that it's ready to accomplish it's purpose. Same thing today in gold. Plow the field. Turn the market upside down so that it's ready to accomplish its purpose. And what's the purpose?
Option expiration, of course! We are now just 2+ days from the expiration of options for the front and delivery month of June. With Monday being a U.S. holiday, there's only today, Friday and Tuesday left before expiration. Looking for an explanation as to why gold is down and not up today, even with all of the supposedly gold-positive headlines and a mini-spike at the PM fix? Look no further than the June gold open interest numbers and you'll have your answer.
Here is the list of open interest for the June call options. As you can see, there is very little incentive for The Banks to allow a Tuesday settlement price above $1200. In fact, if they can nudge price just a shade below $1200, they'll save A LOT of money as there are currently 9,183 open options at $1200 alone.
On the flip side, there's not much incentive to break price down below $1200, either. As you can see, there are also 8,449 open $1200 puts still open. Therefore, any steep drop below $1200 also costs The Banks quite a bit of money.
Obviously, this can change between now and Tuesday as positions are moved and contracts are closed. However, rarely do you see such a clear line of demarcation and it very likely has a lot to do with price having spent so much time close to the round number of 1200.
So, in the end, when you see that gold is actually down a few dollars today...with a last of $1205 after a low of $1201...recognize what is going on here. The ground is being plowed. Expect volatility these next 2+ days as positions are rolled and anyone short calls or puts gets squeezed/fleeced as they always do. In the end, though, any Tuesday close outside of a $1200+3 range would be very surprising. Very surprising, indeed.
And what are those headlines today that should be gold positive? Here are just four from ZH:
For the rest of the day...and while keeping in mind all that is written above...let's continue to watch those MAs that we've been following all week. The 100-day in the June gold is $1211. The 200-day in the July silver is $17.13. That silver is clinging so tightly to that level as support is really quite encouraging. Regardless of the nonsensical "analysis" out there by paid, sell-side shills, I still strongly believe that silver has bottomed and that it is tracing out a massive "W" on the chart that will soon be recognized by folks outside of Turdville. As this happens, upside momentum will grow and a virtuous cycle will develop.
Just two other links for you this morning. This from Koos is extensive and well-written. Please be sure to check it out: https://www.bullionstar.com/blogs/koos-jansen/pboc-gold-purchases-separating-facts-from-speculation/
And this other link I found at ZH is, sadly, terrific. What an awful commentary on the current state of affairs: http://www.zerohedge.com/news/2015-05-21/public-confused-why-worlds-biggest-banks-admitting-criminal-fraud-leads-public-yawns
Again, life has become nothing but a big pile of double seasonally-adjusted lies...and those who pillage and steal off of this corrupt system are allowed to walk free and even exalted in the financial "media". Ugh. But I'll state it again. The Truth wins. It almost always does. And we are on the side of Truth. Relax and be happy, knowing that you are not complicit in the lies and fraud.