Léonard Sartoni https://goldbroker.com/author/leonard-sartoni Since February, the gold market has been in short-squeeze mode. This is a process by which excessive speculation on the declining gold price is being eliminated. The more the price goes up, the more of those speculators are forced to buy back their short positions. When a speculator closes his short position he has to buy it back, hence participating unwillingly to the upward bullish spiral. This is a short squeeze, a laundering of short participants, after a long period in which shorting gold was profitable. And there were lots of shorts! Furthermore, many bullish investors were waiting on the sidelines for an ultimate possibility of buying under 1000 $. But as they saw gold going up vertically, this triggered buying on their part, which helped fuel the rally. We can see it clearly in the uptick of gold ETFs. A first bullish move in a new bull market often produces a short squeeze. We saw one in 2001 that caused a 12% rally from the last time it touched its 50-day movi... Wed, 23 Mar 2016 15:16:34 +0000 https://goldbroker.com/news/the-gold-market-short-squeeze-mode-929 The situation on the paper gold market shows that speculators are massively short on gold currently (even more so since they’re anticipating a friendly settlement for Greece). On the other hand, the commercials have taken the opposite side of the trade. Generally, this is a typical signal of a price having reached bottom... Greece is only fodder for daily speculators; it certainly wasn’t needed to push gold from $250 to $1,900! And eventually from $1,200 to $3,000 or $6,000... The problem is much more global, at the level of the excesses of central banks all over the world and their paper currencies that need to be printed as fast as possible to keep the system from collapsing. This pause in the gold market is akin to being in the eye of the storm. The more central banks distort markets since the 2008 crisis, the bigger the storm grows, and the harder it will be to clean up afterwards when markets correct back to their equilibrium value. On the much shorter term, the... Thu, 25 Jun 2015 15:44:28 +0000 https://goldbroker.com/news/speculators-massively-short-comex-802 The gold market has been in a profound lethargy (at least in dollar terms) for over a year. This is as frustrating for the bulls as it is for the bears. These days we are witnessing an avalanche of bearish commentaries on the price of gold for the coming 6 to 12 months. The psychological $1,000 threshold is attracting analysts like a magnet attracts iron dust, just because an almost four-year old trend ends up drawing everybody in it! Harry Dent (the one predicting gold at $700) is now being joined by many long-time bugs who are seeing gold plummet toward $1,000-$900... before it takes off to $5,000! I call this the final capitulation of the analysts. They are throwing the towel on this frustrating sector and their short- and mid-term predictions end up being dictated by their negative emotions. We can see in the next three following charts that a bear market is defined by constant higher highs and lower lows. When this process ends, the bear market has stopped and a n... Mon, 15 Jun 2015 06:30:30 +0000 https://goldbroker.com/news/goldbug-analysts-capitulation-791 The control of the commercials and the COMEX manipulators have is very depressing for the gold market investor. As soon as gold and the miners are about to get on another bullish leg, that the moving averages are positively aligned and re-crossing the 200-day MA, that the traders are standing by to get back in the market and are following the buying signals, BANG ! A new flash crash ! And, as usual, it is explained by vague and far-fetched reasons. The last example we have is what happened last Friday: Because of slightly better numbers on jobs creation in the United States, gold has been massively attacked and lost $40 in a single day ! Ten days like that would bring gold down to $834 ! This is gigantic ! One doesn’t have to look very far to realise that the manipulators are still running the show and are systematically keeping gold from resuming a bull market. They have failed to keep it under $1,200 for any length of time in 2014, but they are very active in keeping i... Tue, 10 Feb 2015 16:28:00 +0000 https://goldbroker.com/news/financial-markets-pinocchio-enchanted-island-715 The $1,180 bottom acted like it was butter being cut through by a hot knife in October, due to the spectacular and unexpected strength in the dollar. But this time, contrary to what happened when the $1,525 support was broken in April 2013, breaking this support hasn’t led to self-feeding selling cascades. On the contrary, we came right back up, which is a good sign. It is as if we were touching more solid ground. Gold is being sold under its cost of production, which has investors asking themselves serious questions. Gold is in backwardation, sentiment is historically negative, but this process of gold price destruction on the paper markets goes on... How much gold do the central banks have to recuperate still? What is behind those never-ending attacks? For how long will there be physical gold available? These are the only questions that matter to me but, sadly, I have no answers for them. I am still amazed to see those attacks happening with so many commercials, the s... Sat, 29 Nov 2014 15:39:00 +0000 https://goldbroker.com/news/with-gold-backwardation-physical-shortage-getting-nearer-663 The Fed bankers must be really upset: They haven’t even started to raise their base rate and markets are already in panic mode with the expected end to QE 3, just like junkies being told they might have to go into detox. The truth is that economic recovery is so fragile that it can’t go without monetary fixes. The wind of speculation, brought about by much too low interest rates fixed by the Fed and the other central banks, is such that even turkeys have started to fly! In 2014, stock market euphoria and multi-billion dollar IPOs have reached new heights. Money has flown into all kinds of assets, including crypto-currencies. When the tide recedes we’ll be able to better see who was swimming naked. The bursting of the Bitcoin bubble may be interpreted as an advance warning signal of a coming implosion of the stock market bubble, just as the bursting of the internet bubble in 2000 preceded the 2001 and 2002 stock market’s poor performance. These small bubbles can... Mon, 20 Oct 2014 14:47:00 +0000 https://goldbroker.com/news/end-qe3-first-signs-panic-markets-623 Bob Moriarty tells us, in this latest commentary, that parabolic moves always end in capitulation. "When an earthquake strikes and a tsunami forms, the water doesn’t come in at first. It goes out. The further out it goes, the bigger the tsunami on the way." And this is exactly what is happening with the dollar today! An inverse silver chart resembles a dollar chart, in a parabolic ascent: A parabolic ascent ALWAYS ENDS VERY BADLY. Here we see a major peak for the dollar and a major trough for silver being formed. I also have the feeling that we are experiencing the mirror image of silver’s 2011 parabolic ascent. Not on the chart, but as far as sentiment and annihilation of bulls go. Sort of a self-feeding loop that will last until THE final capitulation. For a vast majority, THE final bulls’ capitulation will occur with a $1,000 trough for gold and $15 or even $12 for silver. At the very least, this is how all of those who have already... Mon, 06 Oct 2014 16:21:00 +0000 https://goldbroker.com/news/parabolic-moves-always-end-capitulation-609 As expected, immediately following its Wednesday speech, the Fed went on with its market regulating policy in order to send positive signals to the markets and to maintain the trust of investors. Thus paper gold was sold without end, combined with the now traditional suspicious moves occurring outside of the COMEX, in order to be able to break support levels more easily. Silver, though already quite oversold, but easier to manipulate, was hit by a powerful smash-down on Friday that broke its major support at $18. Usually, those violent attacks can last up to two or three days, so it is still possible to witness more hits. Sadly, for the “market regulators”, gold could not be brought down near its $1,180 support... if it had been, we’d have witnessed the same avalanche of paper gold on the COMEX to break it! The gold miners, for their part, did not manage to stay above their lateral support that was defining a bullish trend since December 2013. In short, the entire sect... Sat, 20 Sep 2014 18:51:00 +0000 https://goldbroker.com/news/gold-price-artificially-pressured-down-594 I think we have all seen this series of attacks on gold and silver on the COMEX, but also outside of it, in London and Hong Kong, as has been the case for every gold price control operation since 2013. The last few days, these attacks have grown more intense, as shown by Hulbert’s sentiment indicator, which has fallen at a 14-month low (lower than at December 2013’s trough of $1,180). But, notwithstanding sentiment, if any market is pounded by determined bankers it can go even lower, and contrarian investing might fail just as much as fundamental analysis of the market, albeit on the short-to-mid term. Technically, gold is coming out of a symmetrical consolidation inverse triangle and might be testing its $1,180 low, which could explain the capitulation of some bulls, at least the ones closely following technical indicators. We often see moves that become self-prophesized when many participants follow the same indicators. But this move could turn out to be a short-lived... Mon, 15 Sep 2014 14:21:00 +0000 https://goldbroker.com/news/gold-silver-under-series-attacks-comex-586 The Fed is in full market control mode after its tentative interest rates future increase announcement. It constantly keeps the stock market from properly correcting, in the hope it will keep going until the next Fed announcement. It must be said that the stock market reaction to the Fed’s speech is followed and analysed almost as much as the speech itself. Normally, the stock market should have corrected. Eventually it will, but the Fed is doing all it can to keep this bubble-like market from reversing, because doing so entertains the feeling of wealth for Americans who have invested their pension funds and savings in it. Gold has become the Fed’s “punching-ball barometer”, just another parameter needing to be controlled. For the Fed, it is crucial to be able to raise interest rates without creating panic on the stock market in order to have some ammunition left when it turns bearish; but I am not sure it will be able to achieve that, because its actions come late int... Thu, 21 Aug 2014 15:50:00 +0000 https://goldbroker.com/news/federal-reserve-full-market-control-mode-569 I believe the next 7-year cycle, from 2015 to 2021, will bring a crisis of “biblical proportions”, much worse than the 2008 crisis, that might resemble the ‘30s Great Depression even more but, this time around, with massive devaluation of the dollar and other paper currencies against gold. In 1934, the dollar had been devaluated by 41% against gold, but total debt was not exerting as much weight in the system and the Fed’s gold could then cover many more circulating dollars than it can today, no matter the money aggregate used (M0, M1, M2 or M3). Today, the Fed’s gold (if it still exists) can only cover 2% of M3 and 8% of M0 (monetary base). In any case, banks are already prepared for the next insolvency crisis and will be allowed to use savers’ accounts to cover their losses. In such an environment, accumulating cash will be risky, thus perhaps encouraging the move of some capital toward gold and silver, outside the banking system. It is said that a... Wed, 20 Aug 2014 16:05:00 +0000 https://goldbroker.com/news/massive-devaluation-paper-money-777-kondratieff-2015-2021-crisis-567 In March, 2000, the start of the imploding TMT (Technology-Media-Telecom) shares bubble marked the start of Kondratieff’s Winter correction wave, following years of maniacal stock market speculation and historical valuations that have not yet been seen again. Source: http://longwavegroup.com/principle/longwave_principle/longwave_principle.php After 1971, money creation becomes limitless and debt keeps on growing despite entering Kondratieff’s Winter. Such a system is doomed to fail before the end of the cycle, around 2020-2021. When gold is part of the monetary system, excessive debt is always purged out of the system during Kondratiefff’s Winter (deflation). Since then, the Fed has fought by all possible means the installation of the correction wave, because the amount of debt is so high that letting deflation happen would lead to a never-seen-before catastrophe. As a matter of fact, we have long passed the point of no return and the only solution the Fed ha... Tue, 19 Aug 2014 10:41:00 +0000 https://goldbroker.com/news/777-kondratieff-winter-2000-2021-crisis-part1-566 The gold miners’ good performance in 2014 bodes well for gold not having to worry about a bear market taking place, like in 2013, or about testing again its major $1,178 bottom. We are still witnessing massive accumulation of junior miners’ shares since they touched a major bottom in December of 2013. Clearly, the April 2013 breakdown zone for gold, silver and the miners will oppose great resistance to the bull market recovery. This is why I’m anticipating large cup-and-handle formations to cross those crucial zones to the upside. The enormous technical damages done in April, 2013, will necessitate time to be repaired, and I expect a breakout above those resistance zones only by the beginning of 2015. Until then the stock market will have reached a peak and will probably already be in an accelerating phase of its new bear market. The technical cup-and-handle formation gives, as objective, the equivalent of the cup’s depth, or the former high of around... Mon, 04 Aug 2014 14:33:00 +0000 https://goldbroker.com/news/gold-starting-blocks-miners-shares-556 It seems the market has been doing all it could to scare away as many participants as possible out of their positions on gold, silver and the miners! Even the most ardent gold bugs are throwing in the towel. The enormous volumes on the GDXJ since the beginning of the year are a sign that deep pockets are accumulating the miners. And these people do not usually comment, either for free or for money, in financial newsletters or on websites. The only observable trace they leave can be seen in the volumes, just like one can see a buffalo herd just went through by looking at the footsteps on the soil : Yesterday, the daily volume on the GDXJ Junior Miners Index beat all records, exceeding by 33% its highest historic value, and producing a 5.78% hike, five times the performance of gold! The bears had tried to gain back control of the market, but they remained all by themselves after having provoked the capitulation of the last weak hands holding gold miners, on May 2... Fri, 13 Jun 2014 15:22:00 +0000 https://goldbroker.com/news/historic-volumes-junior-miners-gdxj-516 The Fed is trying to control the price of gold below $1,300 and the price of silver below $20. Every time the Fed speaks flash crashes in gold and silver happen, which has probably kept the dollar from falling more as a consequence. It is of course easier to manipulate the price of gold than the dollar level. And the fall of the dollar since July 2013 reflects foreigners’ lack of appetite for United States debt. Backwardation is showing us that physical gold is harder and harder to pry loose from investors and that the actual price does not encourage recycling or mining activity. The manipulators have now reached a hard zone and their raids are rather met by determined buyers than by disgruntled investors ready to sell. No one can say for how long this little game of breaking the psychology of the gold market will last, but we’re certainly much closer to the end than to the beginning. For a year, the stock market has been in a bubble phase, as attested by the greedomet... Mon, 12 May 2014 14:35:00 +0000 https://goldbroker.com/news/very-close-major-reversal-stocks-gold-492 The breakout observed on the CCI commodities index should correspond to another leg in the bear market for the dollar and to another leg in the bull market for commodities that started in 2001 and that can be qualified as a « supercycle ». During this supercycle, a large part of the rise in prices has to be attributed to the loss of purchasing power of the dollar. To the point, if we measure this bull market in swiss francs, the general rise in prices since 2001 doesn’t exceed 40%, whereas, in dollar terms, prices have already gone up by 200%! Gold, as an excellent safe haven against the fall of the dollar (and of the other currencies, but mainly the dollar), will perform best (along with silver) for the total duration of this supercycle. A commodities supercycle can easily last between 15 and 20 years. If we take into account the pressures exerted on commodities by countries such as China and India, world population growth, peak production already reached in... Mon, 31 Mar 2014 12:30:00 +0000 https://goldbroker.com/news/gold-commodities-supercycle-460 I think we are getting to a very important test for gold, around $1,300, without a doubt the most important test of the year. Selling volumes on the GDXJ (junior miners’ fund) broke all records yesterday. Dropping below the 50-day MA for the HUI, the main miners index, triggered a lot of panic and many investors just jumped out of the window without asking any questions. As far as I’m concerned, there are two possible explanations. The first one : This is a brutal, albeit normal, correction in the miners that started this panic movement as gold was simply coming back down to its 50-day and 200-day moving averages, precisely at $1,300. And, as a coincidence, these two MAs are crossing each other at this moment and are showing a strong « golden cross » bullish signal! The natural volatility of gold miners is often frought with very disconcerting episodes. The second one : Two days before the Fed’s announcement, the manipulators decided to gain back control of the gold ma... Tue, 25 Mar 2014 14:56:00 +0000 https://goldbroker.com/news/testing-200-day-moving-average-for-gold-456 This chart by itself shows how much investors’ sentiment about the gold miners has reached a peak of pessimism not seen since 1943. Miners selling so cheap in relation to gold is a sign of historical capitulation all over the sector. Their valuations, in terms of P/E and business value, haven’t been this cheap for decades! But we also must take into account that, for the last ten years, the mining sector has had to face major hurdles : higher energy prices, higher costs for construction material, higher taxes, lower-grade ore, not as many new discoveries to replace existing mines, environmental problems, and more difficulties in obtaining the required exploitation permits. So it would be normal that the ratio would be higher than in the ‘80s and ‘90s, but today’s level is just plainly absurd and can only be the result of capitulation from investors in this sector. As far as I’m concerned, this is a sign of a major bottom and constitutes an exceptional buying opport... Tue, 11 Feb 2014 00:00:00 +0000 https://goldbroker.com/news/trough-intermediate-bear-market-gold-has-already-been-reached-426 In the newspapers, one can read a lot of stupid things about gold. They say that gold needs inflation in order to go up. They say that gold moves in an opposite direction to the dollar. Those things are true sometimes, but not always. There is no mathematical relation between the two. They say that gold gains from negative real interest rates... True. But why are they negative? Because we are going through a corrective crisis period from the preceding cycle, and because central banks are trying to boost the economy with floor-level rates, under the rate of inflation. They say that gold gains from monetary printing and that if the Fed’s monetary press slows down, that should push the price of gold down. But if that’s the case, why didn’t gold gain from the enormous increase in the monetary mass between 1980 and 2001? Because the financial wizards of debt money were able to kick the limits of the system further down the road before the debt hit a wall and the first crac... Tue, 11 Feb 2014 00:00:00 +0000 https://goldbroker.com/news/overall-look-gold-what-makes-gold-price-go-up-425 Paper gold sellers (probably banks like HSBC or JP Morgan) decided (jointly?) to hit the market hard on April 12 and 15, and on June 20 and 26, with so much selling that the effect on the price had to lead to a brutal collapse. On those four days of smashdown, the price of gold fell by $340! It should be noted that there was no particular news that could have explained such selling spree. It was like it had been announced that someone had discovered 30,000 tonnes of pure gold in South Africa! The goal of the sellers was to produce the maximum of fear and terror on the gold market at a time when the Fed’s printing press was overheating by producing the equivalent of 20,000 tonnes of gold in new electronic dollars! Each time the price would reach retracement levels sellers would appear, very often outside of the main COMEX market, to systematically smash any rally and, incidentally, trip many circuit breakers, their heavy selling being too big and drying up the market ent... Tue, 11 Feb 2014 00:00:00 +0000 https://goldbroker.com/news/overall-look-gold-market-mysterious-2013-spring-smashdown-424