I went out in the afternoon with gold screaming upward on COVID-19 hysteria. I see something like that and I mentally prepare for the “volatility violence” we talked about in last weekend’s edition of NFTRH (#591).
Maybe some of you old hats like me remember the last bull market, from 2001 to 2008. Yes, of course you do. Massive “attacks” on gold were routine, and they seemed to come at highly sensitive times for another manipulated asset class, stocks. How on earth can you calm the herds down and tend them back into stocks if gold is flying around way up there signaling ‘all’s not well!’?
Is gold manipulated? Why, of course. Policy makers and their agents stand ready 24/7 to shall we say influence the financial markets. Does gold get the shit end of the stick while stocks get the err, golden end? Why, of course. Deal with it, and don’t cry about it. One thing I have noticed over the years is that reversals in the gold price like yesterday, seemingly out of thin air, come more often in bull markets than bear markets. It’s a fact of life in a gold bull market.
Is someone strategically taking down the metal at a sensitive moment by jiggering the futures with a multi-billion dollar sale? Yeah, probably. Is it related to the BIS? Probably. Is it planned, coordinated and executed by scumbags trying to keep the paper and digital debt edifice from burning to the ground? Yeah, probably. Much for the same reasons they so desperately try to defend and pump stock markets.
Don’t personalize it! So they dive bombed you (assuming you are a gold booster) yesterday. If you were prepared mentally it did not mean anything. “Volatility violence”, remember? It’s easy to read someone write something like that but not so easy to sit through it when it comes about.
Yesterday it came about. The damn thing was getting overdone, anyway. It was a dive bomb, not a carpet bombing. 2 o’clock Charlie. He was a feature of the last bull market. Laugh at him, deride him, but don’t let him distract you and don’t let the Gold Bug hierarchy get you too pissed off and emotional. They are famous for excuse-making.
Gold is bullish. Silver is at support. The miners are bullish. The violence came and may not be done. For some, it may even represent opportunity.
As a final note, I am not comfortable with COVID-19 as the stimulant for gold. Insofar as this exogenous event becomes an economic event then fine, it’ll be a proper fundamental (and it looks like that’s the way it’s going). This may not turn out to be the usual gold hype that turns out to be ill-fated. But if it somehow does, no damn excuse making. Okay? Gold was doing just fine grinding out a cyclical bull market before the flu hysteria hit. Now it’s in the grip of other forces.
You can interpret that last sentence any way you’d like.
End of screed.