Thursday, May 24, 2012


                                      Gold Trading Directions

Just a friendly reminder from our pals at JPM that the rock needs to be rolled up the hill one more time; in a research note today they are now predicting more QE from the ECB at the June and July monetary meetings with a cut in rates in September.

So, after a $40 rally off the lows, muppets clients now have an official reason to buy gold at today’s highs near 1577. Maybe some day the public wakes up, but I doubt it; after all, these are the smartest guys in the room remember? That the market will undoubtedly back off from here on “profit taking” [thank you CNBC money honeys] isn’t anything to worry about. Neither is the probable fact your investment adviser sold the market aggressively in the 1575-ish area while you were buying.

“Hey man, it’s just a coincidence.”

So, we now have QE baked into the gold cake not only from the Fed, but now from the ECB as well. Super; when they don’t deliver what then? Who is left to buy? Even if they deliver, if we are still in this price area of 1550 – 1600, who is going to take the lead and take on the Central Planners above 1630?

One thing I am fairly certain of is the desire, on the part of Chalky Soetero and his pals, to keep gold out of the news as election season heats up by the day and week. No way do they want the sheeple people of Amerika to wonder why gold is rising? They might get ideas.

On  the currency front, if it’s daylight in Europe, some politician is lying and desperately trying to convince someone, anyone, that Plan G will work [even though the trial balloons of Plan A-F were dismal in approach and can’t work]. We will get fireworks on the upside as over leveraged shorts will bail in a panic [like today for instance] but the big money knows Europe and the EURUSD are toast.

It isn’t a question of if, it’s only a matter of when; what weekend do they announce Greece is gone out of the Euro? Come every Sunday afternoon from here on out, every money manager on the planet will be glued to the screen to see what’s happening at the open in New Zealand.

And lest you think it’s only Greece, the fellas in Spain and Italy will be watching very closely to evaluate their exit options as well. Forget the politicos; if there lips are moving they are lying.

Have a good day everyone.


No comments:

Post a Comment