Thursday, December 8, 2011

Jim Sinclair on Today's Coordinated Gold Dump by the BOE & The Fed

Jim Sinclair has sent the following email to subscribers on today's coordinated actions by the BIS, the fed, and the BOE to cap gold prices.

The ECB has reasonable funds available to it that, if used in the Euro bond market, would have some impact on containing rates.
Gold rises to $1762.50 , just below the $1764 angel. The new President of the European Central Bank says yes we have the money, but no we are not going to use it. Gold goes straight down into the first area of support at $1709- $1710 where it battles all afternoon.
Bloomberg releases an article saying that concerted central bank activity to control the price of gold was utilized today. Long scalpers barf out their positions based on the above jawboning MOPE. Gold ranges $100 so far today.

 Now with a clear head, the ECB has the money and will be forced to use it or watch their best bond markets look like "Day After," and "Mad Max."
  1. Central banks have been throwing blocks at the gold price ever since $248 without much success.
  2. The Federal Reserve has made dollars available at cheap swap rates to the ECB. To think that is not a step in monetization because it will be used to buy non-dollar bonds is so glib that it communicated ignorance, not understanding. Systemic monetization has the same impact an insular monetization; it just uses other hands to do it.
Gold is headed in the $2000s. The low in the accordion chop has been established in the drop toward $1530. It does not matter if gold launches from $1710 or $1650, what matter is that it will.

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