A Wild Week Begins
So, with Cyprus "fixed", investors everywhere are selling their gold. That's what the MSM and CNBS will tell you. Of course, nothing could be further from the truth.
You likely noticed that gold fell considerably more than silver this morning. That's unusual, huh? It paints a rather clear picture, though.
- The playbook for this sort of thing can be traced back to the wee hours of September 6, 2011. (Rather than spell all of that out again, I'll leave that to you, my dear reader, to explain what I mean.)
- Option expiration for the April13 contract is today and the steep drop also allowed The Cartel the opportunity to fiddle around with anyone foolish enough to be short some $1600 puts.
- Silver has recently seen extremely strong support on every dip to $28.60, as you'll see on the chart below.
And this is just the beginning. This week is also a holiday-shortened venture, it's the end of the first quarter and First Notice Day for the April13 is Thursday. All in all, if you were made uncomfortable by this morning's action, I strongly suggest that you turn off your computer and take the rest of the week off.
For those willing to stick around, here's what we'll be looking at. Let's start with the hourly charts. First, here's gold, which is clearly rolling over and, having failed to hold $1600, looks likely to fall back toward $1570-1580 sometime this week.
And look at this hourly silver chart. Not only has silver been stuck between $28.40 and $29.40 since February 20 (A streak of nearly five weeks which you won't be able to find anywhere else on the charts unless you go back to at least 2010), for the past two weeks it has essentially been stuck in a 40¢ range. Unprecedented, unbelievable and incredible. A virtual flatline. But...like the proverbial duck analogy...what appears calm on the surface belies great turbulence underneath. On this chart, you can see considerable capping effort being expended at $29. However, you can also see significant bursts of buying every time silver drops to/near/below $28.60. Eventually, one side will win, but, which side will it be???
The longer-term, daily charts continue to show that, for all the short-term hoopla, nothing has really changed. Yes, the metals have been in protracted and forced declines since October BUT all they have done is simply move from the top to the bottom of their current (now 18-month!) ranges. The next "event" we'll be watching will be the interaction of price with the downtrend lines within the ranges. Even that appears to be several weeks away, however. The only truly interesting thing on the gold chart is the incredible similarity between the current time and mid-Dec/mid-Jan, circled in red. Move along, now. Nothing to see here. I'm sure it's just a coincidence.
Just a couple of other things. First, our pal Paul Coghlan is hosting another FREE webinar at Noon EDT today. I highly recommend that you attend. You can register here: http://www.coghlancapital.com/node/5499
The Sprott folks just put out an interesting piece on silver, which I found at ZH: http://www.zerohedge.com/contributed/2013-03-25/silvers-investment-demand-conundrum
Alasdair Macleod has this terrific write-up on money supply and velocity: http://www.goldmoney.com/gold-research/alasdair-macleod/money-supply-accelerating.html
Brent at Santiago Capital has a great new presentation. Just click the link and enter your first name: http://play.goldmail.com/ehlflm5vu00p
And I was on with Dr. Janda again yesterday. You can listen to it here (I always chuckle when he call me "a force in the internet blogosphere): http://www.davejanda.com/audio/TurdFerguson032413.mp3
Have a fun rest of your day!