For the past year, we have been saying that the charts for gold and silver are likely bottoming in a normal manner, and it takes time for a this kind of formation to complete itself. It remains the case, to date.
What is likely to cause a sharp price reversal to the upside for gold and silver? If both were allowed to simply adjust to inflation, you would see a fairly substantial rally. Given that will not be the case, what will be a/the catalyst for a precious metal [PM] change in trend?
Could it be enormous purchases of whatever-is-available physical gold by countries like China and India? No. That has been in the works and a known fact for a few years now, and gold continues to languish near recent lows.
How about prospects for a U S-prompted breakout of war? [No other country seems interested in starting one.] No. Libya failed to ignite anything, nor did the Arab Spring or the ongoing Syrian situation where the US sees chemicals everywhere, except in rebel hands.
What about Iran and its “nuclear proliferation” that needs to be stopped? No. Pakistan and North Korea have nuclear capabilities well beyond that of Iran, so a nuclear threat from a country that does not have nuclear capability is another US false flag. What Iran does have that neither Pakistan nor North Korea have is oil. Wait. Are not all contracts for trade in oil based on use of the petrodollar? The first “yes!”
How about the US-sponsored coup d’etat in Ukraine as an instigation for war? No. It has been well-checked by Putin, so far. Wait. Are not all contracts for natural gas trade based on use of the petrodollar? A second “yes.”
What about the loss of the petrodollar as a world reserve currency? Would that cause the prices for gold and silver to rise dramatically? A huge yes for that one.
Come to think of it, the reason for the US-led invasion of Iraq was due to Saddam’s cache of Weapons of Mass Destruction. Turns out, there were none, but Iraq did have oil, just like Iran, and both countries were selling their oil for gold, by-passing the use of the US fiat-issue petrodollar. The elites have consequences for when their rules are ignored. Iraq was invaded, and partially ruined, and Iran has been economically sanctioned
Syria is not known as an oil-producing nation. True. That is not the threat to the US. What is a threat is the strategic location of a Syrian port used as an integral part for sending Russian natural gas to Europe. A successful pipeline that is not run by the US is a huge concern, especially because the natural gas coming from Russia will not use the petrodollar. Without the petrodollar standard, the US cannot export its inflationary fiat to the rest of the world.
Countries that use the petrodollar hold large quantities of US treasury bonds to facilitate trade agreements. If countries, let us say like Iraq and Iran, stop basing oil trade on the petrodollar, other countries will follow suit. The elites cannot allow this to happen. Both countries are relatively small compared to the BRICS alliance, of which China is fast- becoming the world’s biggest energy user. All of the BRICS nations,[Brazil, Russia, India, China, South Africa], and a host of other countries are starting their own trade agreements, and guess which country is “odd man out?” The elite’s own United States. The elites cannot allow this to happen, but they cannot stop it, either. This is a problem for them.
While everyone is focused on the demand side for gold, doing all kinds of calculations, trying to figure out the real number of tonnes China has purchased. Our simple answer: a lot, and the real number is of no consequence.
All of the charts depicting countries purchasing gold, graphs showing the depletion of COMEX, LBMA, GLD, et al, are well done and nice to look at, but none address why the price of gold and silver are at relatively low levels, these days.
Gold, more so than silver, has been purposefully suppressed to keep the fiat petrodollar propped up. The elites will stop at nothing to prevent gold from being recognized as an alternative to their Western world fiat Ponzi scheme. Why has the elite-puppet Obama been continually enabling and prompting the illegally sponsored coup in Ukraine?
The US is fighting to keep the Wizard behind the curtain from being exposed for the fraud that it is. The fraud is the fiat Ponzi scheme and the utter insolvency of the entire Western central banking system. What keeps it alive, actually more on a respirator, at this stage, is the grip over the entire Western world political system which is designed to keep the masses enslaved to the debt system from which there is little hope of escape.
There is a reason why there has been such a militarized build-up in the United States, used against certain countries to keep all other countries in line, lest they be next. The militarization of local police forces, with their highly armed swat teams, former military vehicles being “donated” to cities and towns. This is by elite design to have the means of keeping the masses under control, no match for the excessively armed police. This is why elite-kisser Michael Bloomberg, who has turned the NY police into a virtual private military, and why he has been busy campaigning for national gun control. A population with no means to defend itself is an easy target to keep under control.
Chicago has some of the strictest gun-control laws in the nation, yet crime and death by gun is amongst the highest in this country. What will more gun controls accomplish? Nothing. Not a thing. All that needs be done is to enforce the gun laws on the books, but that would not solve the disarming of the people, which is what the corporate federal government wants in order to eliminate all forms of civil resistance.
We got a little off topic re the threat of dismantling of the petrodollar, and with it the rapid fall of the United States into a third-rate country drowning in debt with no way out. The elites can ill afford to lose its primary ATM machine that feeds the top .0001% who profit by controlling all the money. All of these seemingly extraneous events are really tied into the control of the powerful and power-hungry elites. The Rothschild crowd.
As was stated last week, we know of no sentence that has had a more profound effect on the people of the world than the one uttered by Mayer Amschel Rothschild, “Give me control of a nation’s money, and I care not who makes the laws.” [See Power Of Elites More Important Than China’s Gold, 5th paragraph and the ones following as explanation.]
Why is it that 2014 may be like a repeat of 2013 in failed expectations for gold and silver to reach new highs and beyond?
For as long as the elites maintain their monetary power to destroy countries via their imposition of financial terrorism, [Greece, Cyprus, Ireland, Spain, et al, and now trying to gain financial control over Ukraine, in desperation. The utter inability of Germany to repatriate its own gold, to which one should ask, why is Germany not in an uproar over this? Hint: Power of the elites to keep Germany in line.], the price of gold and silver will take time to turn around.
The catalyst will not be how much gold China owns. The catalyst will be the fall of the petrodollar. Once that happens, checkmate elites. Game over US. Gold and silver, rise to your natural relationship between supply and demand, no longer being artificially suppressed.
The problem for now? There is no viable alternative to replace the broken fiat petrodollar scam. The Chinese have already made clear that they do not want their Yuan tied to the price of gold, and China is not really equipped yet to have their currency be a substitute world reserve, emphasis on the adverb “yet.”
Russia’s ruble is not sufficiently held by other countries to make the ruble a reserve currency. It is in a position to grow into that status, but not in the near future. Which country has the ability to replace the petrodollar? None of which we are aware. The BRICS nations are successfully building an alternative to trade that eliminates the fiat petrodollar, and that, more than anything else in the interim, poses the biggest threat to its demise.
We could see a marking of time during which all of this continues to unfold. No one has a clue as to the how or to the when, which is why 2014 could be an extension of 2013. The way in which Obama keeps prodding Russia could precipitate an event that escalates out of control, just possibly, as an example. This is why we say to watch out for weekend surprises. When people least expect, and/or are in a position to least react, some kind of announcement could be made that devalues the fiat Federal Reserve Note, still wrongly called the “dollar.”
A few paragraphs back, we said the there is little hope of escape. For as long as the fiat monetary Ponzi scheme exists and people remain tethered to it though debt, dependent upon government through assistance/subsistence, there is no exit. The only means, or perhaps the best means is through the buying and personally holding physical gold and silver. Both PMs represent a form of wealth that leads to independence from control of any government.
This is why the Rothschilds took over this country via the Federal Reserve Act, [“Give me control of a nation’s money, and I care not who makes the laws.”], gained control of the money, and then once in control, had FDR make the Executive Order to have “all persons” turn in their gold under penalty of $ 10,000 and/or confiscation. This was also another sham that fooled people into believing an Executive Order applied to them, which it did not. But that is how the Rothschild formula works, through total deception.
[We keep repeating the Rothschild sentence about control over the money supply because once you comprehend how it is the genesis for all what ails people in their own country. Governments are nothing more than instruments for elite control over the people.]
These are the reasons why we keep exhorting everyone to buy gold and silver. Price is immaterial, having it is all that matters. Having gold and/or silver is what will keep you financially viable when this country falls apart, and fall apart it will. The US has been hollowed out since the Rothschild central bankers took over in 1913, in a financial coup d’etat.
On a final note, before reviewing the charts, a second interview conducted by SGTReport has been posted on the site. Here is the link for anyone interested. The Rothschild IMF Bankster Fiat Death Machine. The title was selected by Sean of SGTReport, and it gives a clue to some of the content discussed.
There is not a shred of evidence that the price of gold is about to embark upon a much higher trajectory. This is the value of reading developing market activity within the context of all the world news and events that potentially impact price. What the market is saying is that nothing in the news is disturbing the bottoming process. What people are saying about the market may be a different “story,” but it is the market that has the final say. Pay attention to it.
What we are paying attention to in this chart is the volume spike. Whenever you see a sharp increase in volume, the immediate question to ask is “why?” Remember, it is not the public that creates volume. The public reacts to it. Therefore, almost always, any increase in relative volume is indicative of “smart money” activity.
When volume increased while price was declining, one would naturally expect to see more downside follow through. When the opposite happens, it is worth paying closer attention. The lack of further downside suggests buyers were overcoming sellers, shifting market composition from weak into stronger hands, and that is positive for a market trying to form a bottom.
The daily chart confirms the weekly. The read of the developing market activity prompted a buy recommendation at 1291. Because of our own trading rules, a sell, about $ 18 higher was made a few TDs later. Price is still under a half-way retracement from the March swing high to the recent April swing low. On the wide range bar lower, market “S/D,” which indicates Supply overcoming Demand, a thin horizontal line was drawn off the high, a place where sellers will defend a retest. That high is just above the 50% mark of the trading range. The confluence of two separate indicators could make the 1235 area resistance on a rally to that area.
For now, it looks like gold can be bought on breaks, based upon whatever rules one has for establishing a position in the market.
While silver is not showing signs of strength, it is showing signs of resistance to downward selling pressure. It has taken 5 – 8 weeks to correct the previous 3 week rally, shown on the chart. This tells us that even in a weakened state, silver is showing an ability to rally with greater ease than decline. Little signs like this can be the forerunner of more change to come. Preparation becomes important in order to take advantage should a buying opportunity present itself.
Here we see the importance of reading developing market activity. You look for patterns because they repeat, over and over. We discussed a volume situation in weekly gold, and here it shows up on a daily silver chart. The patterns will not always be exactly the same, for good reason, but they sure do rhyme a lot.
The increase in volume at an area of support is not random. Markets are not random, except for those who have no clue about what price and volume can consistently reveal. We look for these repeating patterns to be prepared for opportunity when it strikes, for when a pattern is recognized, it is the market’s way of offering an edge. The most important part of seeing these behavior patterns is to know how to respond to them as they occur. How do you know how to respond? You devise a set of trading rules that fit the pattern behavior. Everything then become a function of following your rules of engagement. Nothing is left to chance. This is how skilled professionals trade. Therein lies a message.
By Michael Noonan
Michael Noonan, mn@edgetraderplus.com, is a Chicago-based trader with over 30 years in the business. His sole approach to analysis is derived from developing market pattern behavior, found in the form of Price, Volume, and Time, and it is generated from the best source possible, the market itself.
© 2014 Copyright Michael Noonan – All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.
