When Jim Sinclair (JSMineset) talks you better listen carefully. He is one of the most experienced investors in the gold industry. He has made a fortune with gold trading in the 70′s and is now running a royalty based gold company in Africa.
In a two part series to his subscribers he explains his prospects for gold. More importantly he advices what every “gold investor” should do and explains the current market dynamics. Hence he puts the recent sudden price take downs and the 1.5 year consolidation into perspective.
Jim Sinclair confirms once again that the gold price fundamentals and ongoing currency wars underwrite a recovery in the gold price. We can expect a move to new highs soon. The core of his message is the following:
“You have a weapon that has ultimate power to frustrate the price manipulation. All you need to do is to do nothing whatsoever which will confuse the shorts.”
Although the gold price has been going up on average between 12% and 17% per year for 12 consecutive years now, the gold price is being suppressed as described in detail in earlier articles including gold manipulation proven on the charts, how can the gold price drop in a matter of milliseconds, manipulation of gold price, silver manipulation explained in a simple way. Now this should not scare anyone off, because price suppression is “the new normal” in a lot of markets. Every individual makes use of interest rates. Well, the core interest rate (LIBOR) has been manipulated for many years. We all became victim of it, mostly without noticing. Jim Sinclair reveals on a high level how the gold price suppression is being played by the manipulators.
The manipulators that focus on moving price down and not selling volumes of gold to accomplish it wager on the fear mechanism of price decline to pressure you beyond your ability to reason logically. What the gold banks and short of gold share funds count on is that you will injure yourself just to stop the pain of loss.
Clearly the gold banks will try to get gold into a capitulation point. Hear me: We are right in front of that time when the market performs a classic bottom both in shares and physical. From this point gold is going to and through $3500. That is why what happened today is happening in the first place.
How the shorts are playing it
Every gold investor should stay calm and rely on his belief in the fundamentals. Short term prices do not make a market. For sure it is scary to witness sudden price drops without any reasonable explanation. But that this the whole idea: shake you out of your long position.
Stay away from the well known chat sites that harbor paid-for bashers that say nearly insane things to scare the hell out of you. If the big boys cannot terrify you to the point of taking your position away from you, a firm bottom will come into play very soon.
Technicals are good, but simply stated, the manufactured downside pressure stops only when it does not work. Those pressuring gold and silver prices clearly are not long position sellers looking to change their positions into cash dollars. This is a solid fact based on the manner of their selling.
Take comfort knowing that the early AM takedown and takedowns in late Asia time are not valid sellers, but painters of the price for their best interest. Nobody is so stupid as to announce they want to sell a major part of one year’s production of gold or silver when there is no market to absorb any reasonable part of it.
Detect the weak spot of your “opponent”
So if this is “a game” as Jim Sinclair explains then you should participate as in a real contest. The weak spot of the opponent is what you should focus on. Everyone has his weak spot. The weakness of the long investor is to get fooled by irrational price drops (as discussed in the previous paragraph). The weak spot of the short investor is that the longs are not influenced by their moves and simply … do nothing! As simple as it sounds, this is just very smart.
Please do not be duped by the giant bastards playing you. Every day that passes is one day closer to the day manipulators change sides to long, just like they did in the 1970s. Please let them play their numbers game but do not give them one ounce of your gold or one share of your gold companies for whom all things are progressing well. Soon you will know that you beat them at their own game for the first time. You can be proactive by simply having courage of your and my convictions, therefore not giving them any of your product. There will be great satisfaction when you face down the bully who is basically full of it. This is our last battle before victory. I will be there and I want you to be also. Let them play their price game but do not give them product. Stand tall and stare the bully down. He will flee as this is the last thing he expects.