Until there is a clear break of elite’s central banking dominance over the gold and silver markets, there will be no dramatic recovery reflective of where the true price for both metals should be.
Whether it is $5,000 or $10,000 for gold or $100 or $200 for silver [the ounce], the current distorted pricing, as dictated by the paper derivative market and not actual physical metal, will prevail demonstrating the power the elites exert at will.
The probability of the elites being “all in” has not even reached the stretching point, yet,
although it may be getting there. All that remains, really, is to wait and let events take
the unnatural course they have been on for several decades. The undoing of too many
decades of gold/silver manipulation/suppression will not be accomplished in a single year,
as it has not been over the past few years, and there is no way of knowing the time factor
for change in the year[s] ahead.
We have said on several occasions, the elites think in terms of decades, while most people
have trouble planning a year in advance. Back in 1988, the Economist, [A Rothschild-
backed publication, certainly in terms of content], published an article, “Get Ready For
A World Currency By 2018.” Here is a 30 year plan as evidence of how the elites work,
and there was surely years of planning involved before the article was even published.
The new world currency was to be administered by the International Monetary Fund.
It could only work if nations gave up their sovereignty [Hello, European Union], and all
currency control to the IMF, as it was imagined back then. Greece, Cyprus, Ireland, Spain,
etc, etc, and more to follow, have virtually given up their sovereignty in favor of increased
debt “bail-outs” to “cure” the excessive debt under which each country was already buried.
There is no one who would agree that increased doses of heroin will “cure” an addict, or
increased whiskey or vodka will “cure” an alcoholic, yet the Western banking elites have
sold the notion that the only way to save a financially destitute country is to take on even
more debt as a “cure,” and the masses continue to buy into it.
There is one thing upon which almost all can agree as a certainty: the paper fiat currency
scheme, as it exists today, is near its end, inevitably doomed to failure. Consider a few
related circumstances. Seven years ago, the Fed’s balance sheet was 6.3% of the U S
economy. Today, it is over 25% of Gross Domestic Product. During that time span, the
Fed’s balance sheet grew 5 times larger while the actual economy was up about 20%. All
that the Quantitative Easings have done is shore up the entire underwater banking system
while the US economy has been purposely gutted in the process.
In the 10 year period prior to 2007, $13.88 of new GDP was created for every new Federal
Reserve Dollar printed by the Fed. From 2007 through the first half of 2014, only 81.8
cents of new GDP was created for every fiat Federal Reserve Note. This is but one example
of how the elites are destroying the Federal Reserve Dollar, gutting the economy, and
propping up their precious “Do Not Disturb” fiat debt enslavement Ponzi scheme. Most
Americans remain in a comatose state of [un]awareness when it comes to understanding
how the fiat monetary system [does not] works.
The G-20 met in Australia last week, and guess what has been announced as a part of their
agenda? The G-20 has vowed to focus on a plan to add $2 trillion to world GDP. This
kind of economic insanity has no limits for the elite’s New World Order, to be controlled
by a single IMF currency. Can it be any clearer why gold and silver are being suppressed
in order to serve the greater NWO good?
We mentioned the importance of the Swiss referendum requiring the Swiss National Bank
to maintain a 20% gold reserve requirement, from the current 8%, and it also prohibits the
Swiss central bank from ever selling any Swiss gold. What is of great interest is the ability
of the elite’s central bankers possibly preventing the Swiss referendum from passing.
Should it pass, despite both Swiss government and banking pressure against it, the
question then becomes, what will the payback consequences be against the Swiss for
fighting the elite’s system of controlled debt.
All Western politicians are controlled by the Rothschild central banking system, and all
Western governments are subservient to these banking interests. While it may appear
that China and Russia, along with the other BRICS nations, have banded together to put
an end to the elite-controlled fiat currency system led by the once “almighty dollar,’ now
in rapid decline, appearances are never what they seem to be, on purpose. What is not
clear is the extent to which the elite’s central banking system has control over both the
Chinese and Russian governments.
The United States, as a world-dominating power, fades with each passing month. This
country is done, finished, and is running on its remaining military might. The US has no
viable means of sustaining itself. There is no manufacturing base, there are no savings
in plant and equipment from which to rebuild. Cities, even states, are facing bankruptcy,
burdened by decades of public pension promises that can no longer be met, along with
diminishing tax revenues. Which country will take over?
Both Russia and China have a host of issues that preclude them from implementing a
workable world-serving financial currency/system. It is not clear that China even has
the capacity to become the next world powerhouse. Russia does not. Yet both nations
have expressed support of a currency system run by the IMF, the elite-controlled
mechanism for running its New World Order agenda. Why would they say that?
The elite-dominance of its fiat paper dynasty has ruled the world for a few centuries.
Money is least understood by the masses, yet it is the greatest controlling influence by
a small group pulling the strings by which the Western world operates. Does that
small but most powerful group extend its control over China and Russia? While the
thinking is that both countries will “reset” the price of gold and silver as the fiat system
of the Western world is toppled, who knows if the elites are simply changing horses, as
it were, and will eventually be running China and Russia as it has the US/UK/EU?
There are so many unanswered [unanswerable?] questions, beyond when will gold and
silver “take off?” As to the latter, the charts still say “No time soon.” While this is true
as the way things stand now, change can occur at any time, but that is future, and all we
is address what is actually known in the present tense.
Yes, last Friday was the best for silver in a single day in over two years, but that does not
materially change anything. Three weeks ago there was a S/D [Supply over Demand], two
day move lower when the recent 16.60 support area was broken. The decline started from
the 17.20 level, so resistance is defined by that range. Last Friday was an attempt to begin
an assault on this immediate overhead resistance.
Friday was a D/S bar, [Demand overcoming Supply]. Combining the last two Fridays, we
are starting to see a change in the character of market behavior where the strongest bars
in the down trend are to the upside. For next week, it is important to see if there will be
any upside follow-through, and to what extent, given the overall layers of resistance, and
also the way in which Friday’s rally bar is retested.
An example of a positive retest is what occurred two Fridays ago when price moved in a
sideways manner for four trading days, maintain the gains. Once a pattern of gains being
able to hold emerges, it will lead to a trend change.
When last Friday’s impressive rally is incorporated into the weekly chart, the response is
not as enthusiastic for its impact. There will be an increasing number of articles declaring
silver is on its way, probably from the same writers that said the same thing over the past
several months. Glance back at the low for 2010, and you can see how after an initial rally,
price moved sideways for about five months. It does not mean a similar pattern develops
here, just that it can take some time for a trend to change course, and being first in is not
always the best situation. Waiting for an upside breakout of the 5 month pattern brought
more immediate results, so it pays to be more select in one’s timing, at least for futures.
Gold’s pattern is more stable than silver’s, even though silver outperformed gold last
week on a relative price relationship basis. The previous two swing bottoms in 2013
and almost 2014 did not lead to sustained rallies, and there is zero available evidence
that says a new bull move will commence, presuming the recent low holds as a swing
low. Let the market prove itself first.
You can see how the general level of volume has picked up in the month of November.
The fact that the volume increase is occurring at the lows, if they hold, usually indicates
a change from weak hands into strong. Keep in mind, it takes time to turn around a
trend, and the down trend can change into a sideways move before an up trend occurs,
so patience has merit for not “jumping the gun,” which often means a false start.
Note the combined volume of the last 10 TDs [Trading Days]. In total, it still has not led
a price move over the single down day and its volume from 31 October. It shows the
difficulty of effort required of buyers to overcome sellers in a down trend. It also suggests
the volume and price behavior is more in the form of short-covering as opposed to new
longs being established.
Gold has dropped 770 dollars from its highs. A rally of 55 dollars should not be viewed as
game-changing.
With gold prices reaching a three-week high on Tuesday, one famed economist and CEO may not be so far off in saying that the metal is in the best fundamental environment right now.
“Gold is going to go to $5,000 [and] I’ve had that target in mind for some time,” Euro Pacific Capital’s Peter Schiff told Kitco News in an interview at the Grand Cayman Liberty Forum on Tuesday.
Peter Schiff, CEO of Euro Pacific Capital talks with Kitco News’s Daniela Cambone at the Grand Cayman Liberty Forum
“Normally markets […] take the stairs up and the elevator down. Well, I think that gold is going to take a rocket ship back up,” he added.
Gold prices ended the U.S. day session higher mainly due to a weaker U.S. dollar index, but also because of some media reports suggesting that the European and Russian central banks were looking to acquire more gold.
“If they’re going to buy more gold, which I think would be smart because I think the price is going to go a lot higher, it’s not to counter low inflation,” Schiff said. “A lot of people thought, when gold was falling that Russia was selling […] Putin is way too smart to sell his gold. If anything he’s buying gold and selling dollars.”
Looking at the dollar, Schiff said the U.S. currency is not as strong as people perceive it to be.
“I think people are worried about the yen, about the euro so the dollar wins by default,” he argued. “I do believe the dollar’s days as the world reserve currency are numbered.”
With regards to monetary policy, Schiff said he expects to see another round of monetary stimulus in the U.S., even as soon as in the coming year.
“I think as the U.S. economy drifts back to recession next year, we’re going to come in with QE4,” he said. “I think this could be the last round, this could be the fatal dose…and I want people to take advantage of this last window of opportunity to sell their dollars…and to pick up all this gold that they can below $1,200 an ounce.”
Finally, Schiff shared his insights on the upcoming Swiss referendum and why he thinks it may potentially have a bigger impact ‘beyond Swiss borders.’ On November 30, the Swiss will vote on whether or not the Swiss National Bank will have to hold at least 20 percent of its assets in gold.
“This can be a game-changer worldwide,” he said. “If the Swiss franc stops falling and starts rising because of this…more people will understand that a strong currency is good not a weak currency.”
Investors and gold producers alike are becoming nervous as the global price of gold continues to soften in the face of the strengthening US dollar.
Alarm bells ring for producers when gold dips below $US1200 ($NZ1520) an ounce, severely eroding already stretched profit margins, but the prospect of $US1000 an ounce is now being mooted by some analysts.
Gold’s softening price has prompted New Zealand’s largest producer, Oceana Gold, in East Otago, to give notice that unless prices firm, its East Otago and West Coast operations could be facing closure between 2015 and 2017.
In a recent two-day survey of 27 US analysts and traders, half the respondents predicted gold prices would breach a critical support at $US1100 an ounce by the end of this year, Reuters reported.
A significant portion even had $US1000 in their sights, which would be a five-year low and a level considered critical for miners.
Only two of the 27 analysts expected prices to recover above $US1200. From about $US1200 in early December, gold went on to peakpeaked above $US1300 in early March before easing to trade below $US1200 since late October – most recently trading around $US1160 an ounce.
Craigs Investment Partner broker Peter McIntyre said there was ”always a chance” the predictions of a fall to $US1000 could be correct.
He said there were ”three negatives” working against the global price of gold. The lack of inflation in some economies meant gold was less attractive, investors were turning from gold to the strengthening US dollar, and countries in the euro zone were continuing to sell gold stocks in order to repay debt to the European Central Bank.
”$US1200 has been the floor for gold for the last 18 months, but if there’s a break below $US1100, then $US1000 does look very likely,” Mr McIntyre said.
Early last week, investment banking services firm UBS said with gold prices likely to remain weak, it expected mine management teams in Australia to be looking for more cost savings and productivity improvements, Dow Jones reported.
”But, with an already slimmed-down workforce and stockpile strategies enacted at many mines, the next round of cuts and decisions could be a lot harder and potentially have a lasting impact,” analyst Glyn Lawcock said.
UBS expects gold to average $US1200 an ounce during 2015. Prices may remain volatile and prone to rallies on spurts of short-covering, and weak prices have unleashed a flurry of physical demand for coins in Europe and the United States.
But with the dollar on a tear against global currencies and institutional cash being pulled from the market, any recovery may be short-lived.
”The drivers of a sustained rally in gold are ephemeral at best,” said Tai Wong, director, metals trading at BMO Capital Markets in New York.
A strong dollar makes it more expensive for foreign buyers to own dollar-based gold.
Holdings in the world’s No1 gold-backed exchange traded fund, SPDR Gold Trust, which proved popular with investors during the financial crisis that followed the collapse of Lehman Brothers, sank to their lowest in six years on November 7.
The poll highlighted how far gold has fallen out of favour with the end of the Federal Reserve’s years-long bond-buying stimulus programme, worth more than $US3 trillion.
At $US1000, gold would be off almost 50% from the all-time highs of $US1920 an ounce hit in 2011 when investors were piling in to protect against inflation and geopolitical and economic uncertainty.
David Lennox, resources analyst with markets research group Fat Prophets, said gold mines that opened during the global financial crisis would close if the price dropped below $US1100.
”A lot of mines would have to shut – there would be no doubt at that price level,” he said, noting diversified miners would end gold production to focus on their main commodity.
This would reduce the supply of gold and push up prices again as jewellers, rather than speculators, bought the precious metal, he said.
”You’d start to see again that increase in the appetite for gold from its real sources,” Mr Lennox said. He was ”comfortably” forecasting a gold price of $US1200 by the end of 2015, even as a rise in US interest rates put some short-term dents in its value.
Banks have swung into action as gold prices continue to slide. Reduced loan-to-value ratio (LTV), cautious lending, and a close monitoring of the gold loan portfolio have prompted them to hedge their loan books against the reduction in prices.
The yellow metal has lost 14.5 per cent in the past year and fallen to Rs 26,660 for 10 gm from Rs 31,190 for 10 gm a year ago. In the past six months, the speed of slide has increased, with gold losing 10 per cent.
To safeguard themselves, lenders have reduced the LTV (the part that can be given as loan) on gold. For instance, Federal Bank was earlier financing up to 70-75 per cent of LTV on gold ornaments, and has reduced it to around 60 per cent for a one-year tenure.
“We are also looking at starting short-tenure loans of up to a month, three months, etc. For such loans, we will be ready to provide higher finance. But for a loan of one year, we are now looking at an LTV of 60 per cent or so compared to the 70 per cent or so we were lending earlier. The prices have become very volatile,” said A Surendran, general manager and head (retail business) at Federal Bank.
Lenders have also started monitoring their gold loan portfolio more cautiously, as risk rises with a fluctuating prices.
According to a senior Indian Bank official, the sharp fall in gold prices increases the risk for existing gold loan portfolios. Therefore, the bank is marking the portfolio to market (revaluing an asset at current prices) daily. With the fall in prices, the eligible amount for loan is also coming down. So for existing loans, borrowers are being asked to bring in additional collateral or prepay for amount, which is in excess of the eligible sum. The bank has kept the loan to value ratio and risk margin intact as the daily mark to market exercise captures the pricing trends, said the executive.
With the drop in gold prices, the customers have also become reluctant to lend by pledging their gold ornaments, says another banker. As a result of the falling prices, for the same amount of gold, a customer would be eligible for a lesser amount of loan now compared with last year.
Gold prices are likely to be under pressure for some more time and, as a result, banks continue to grow their portfolio with more caution.
“With favourable conditions for an appreciating dollar, and given the strong correlation between gold and the dollar, we would not be surprised if the price of gold dropped below $1,100 per ounce during the first half of 2015,” says a report from Natixis Commodities Research.
Currently, gold is around $1,189 an ounce. Australian Dollar price check is out at www.sydneygoldertraders.com.au