Friday, July 22, 2011

Battle Royale Continues for $1600 Gold, $40 Silver

A major battle continues this morning over $1600 gold and $40 silver.
Gold has now fought off the dark forces to retake $1600, and silver temporarily did as well, trading as high as $40.13, before being knocked back just under $40.
Apparently 250 million ounces of paper silver dumped onto the market in 1 minute just doesn't work as well as it used to, as the t1/2 of this extraordinary manipulation to knock silver under $40 appears to be less than 2 days.
With silver now re-taking the $40 level, if it were not for today's launch of the HKMEx silver futures, we would be calling for CRIMEX silver rate hikes by this afternoon at the latest.
We still may well see a rate hike soon, but the Hong Kong market should prevent another episode of 5 successive rate hikes, as traders now have the freedom of moving their business from the CRIMEX to the HKMEx.
Silver's long term charts show clearly the breakout from the correction/consolidation from May-mid July, and a strong move past $40 will confirm that for all to see.  This is why this level is so critical to the cartel, for with the COT set-up remaining so bullish for silver, we could see a retest of $50 in a flash, and this time have plenty of powder left to bust through to new all-time nominal highs. This must be prevented at all costs by the cartel, as there is absolutely no resistance past $51, silver will be trading in completely open sky territory.
Live 24 hours silver chart [ Kitco Inc. ]

Again, we would like to see gold close from $1605-$1610 today.  If it can manage to hold its gains and close near this level, it should continue to work higher next week and just may finally challenge Jim Sinclair's famous $1650.  As Sinclair's $1650 call was made over a decade ago, he deserves enormous amounts of credit for calling $1650 gold within 6 months of its occurrence.  This is why Sinclair's new call of $12,500 gold must be seriously considered as likely where gold is headed long-term.

Live 24 hours gold chart [Kitco Inc.]