-- Published: Friday, 6 February 2015 | Print | Disqus
As Koos will no doubt report at this site shortly, I found the numbers doing nothing but solidifying my belief on how gold trades. But first the numbers are worthy of review.
2014 mine supply of 3100 tonnes is misleading as roughly 25% of supply never leaves two large producers China and Russia (allegedly). Well, the Chinese just withdrew 255 tonnes in January alone from the SGE. Yet, do we see even an inkling of that in how gold trades? Of course not, because gold is all about lines on a chart and futures contracts.
Here is how gold trades. I have denoted on the chart a long blue candle as “A” and a long red candle as “B.” Now, these candles are easy to see because they are so large on the 4hr chart, but rest assured even on shorter time frames all candles like these are targets. This is how the cartel does it.
The blue candle labeled “A” was never covered or “re-traced.” Now, I have absolutely no idea why that matters but for trading houses it matters.
This is what always happens. Anytime you see a candle on any time frame, with the possible exception of a 1 minute chart and you have a long body to the candle, sooner or later they will bring gold back down and cover that candle. In the case of the cartel, they simply sell more and more and more until the price breaks. Of course, government numbers are always there to help when they need it, much like today.
It does not mean that candles on the daily, weekly or monthly get filled in a reasonable time frame. Sometimes it takes a very long time (see below). However, I have found that there simply aren’t any exceptions to this method in gold. None!
Again, this is a monthly chart of gold and you can see that a portion of the run up in 2007 before the credit crisis saw a candle marked “A” go uncovered. Do you think it was an accident that in the depths of panic in 2008 the gold market covered that area via “B” and then bounced perfectly?
I bring this to the attention of the gold community for one reason. The price that you see via trading action is always under control and I see no evidence that supply and demand of gold play a role in it whatsoever. Will that change in my lifetime? I sure hope so but for now, anytime you see a rally that isn’t covered be wary, the cartel is selling and will win the day until they don’t.
It’s a Mystery
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-- Published: Friday, 6 February 2015 | E-Mail | Print | Source: GoldSeek.com