The Gold & Silver Price Dipped Today

“The markets are now well and truly broken. Not because they don’t conform to my predictions, but because they are no longer sending useful price signals.” This quote comes from Chris Martenson his latest editorial. We believe it perfectly describes the gold and silver price action of the past days, and especially today (December 18th, 2012).

The charts show both gold and silver took a dive today. They did not close the trading session on the lowest point of the day.

What follows are some commentaries about the precious metals price action.

It’s almost amusing how some commentators are attaching so much importance to headlines. Could a safe haven really lose its status in one day? The first quote comes from Marketwatch:

“Gold is not looking like a safe haven as Greece gets an upgrade and going over the fiscal cliff looks less likely,” said Phil Flynn, senior market analyst at the Price Futures Group. “Stocks look like a better bet and bond yields are providing a better return.”

Jim Wyckoff has an extensive background of 25 years in the markets and commented today on Kitco:

There is no doubt in my mind that bigger players in the market place can and do manipulate markets—on a short-term basis. The big boys like to catch the market in thin, low-volume conditions so they can have as big of a desired price impact as possible when they execute their bigger trades. Such activity is not exclusive to the gold and silver markets. It happens in nearly all traded markets—and it is nothing new.

Additionally, Ronald Stoeferle (precious metals analyst and editor of the “In Gold We Trust” reports) explained how these short term takedowns in thinly traded markets mean nothing in the bigger picture. The intra-day or intra-week price actions could be designed and can go into all directions. They should not be a guide for investors. That view was extended by Mineweb today:

Given the amount of paper gold futures that have been sold, those doing the selling must be wondering how long they can keep this up given they have only managed to knock the price back a few percent.  The volume trades, seemingly designed to drive the price down below various stop loss positions and thus make the falls self perpetuating in these days of computer-driven trading, are patently only succeeding to take the price down to another point where perhaps an even bigger position holder is buying.  The finger tends to point at China in this respect given a number of statements from various senior officials suggesting that a) China needs to increase its reserve holdings b) that it is buying on dips and c) that it needs to keep the population happy and has been in the persuasion business of telling its rapidly growing middle classes that gold and silver are great assets in which to invest.

It comes all down to staying focused on the big picture and controling oneself. In that regard, nobody is better positioned than Jim Sinclair to share his words of wisdom. He sent out the following message earlier today (source: JSMineset):

This is capitulation everywhere. This event has been a manufactured market move since $1800, with clearly planned and executed intervention. The gold price take downs during low volume periods internationally is a known price moving only tactic.

I simply shut off the machine because all the regular causes for the gold price will make themselves effective with time. A manufactured market event will not change the trend. Even the most professional can be reduced to sheeple by their emotions.

Like every mistake made by Westerners, what you see today is simply driving gold into Asian control.

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