by Natura Naturans
Gold Soars To 10-Mo. High; Powerful Bulls Looking For More Upside
Jim Wyckoff Jim Wyckoff
Tuesday February 19, 2019 13:31
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(Kitco News) – Gold prices are strongly up and hit a 10-month high in early-afternoon U.S. trading Tuesday. Technical buying, some geopolitical uncertainties and ideas of easier monetary policies being put in place by the world’s major central banks are boosting the precious metals markets. A drop in the U.S. dollar index today, after holding mild gains overnight, is also working in favor the metals market bulls today. There are no early chart clues gold’s push higher will end anytime soon. Charts suggest the path of least resistance for prices will remain sideways to higher for at least the near term. April gold futures were last up $21.90 an ounce at $1,344.90. March Comex silver was last up $0.222 at $15.965 an ounce
The reason gold went down during the last several years is outrageous manipulation by central banks. There have been MANY articles about it but what happened is the exchanges of the world started expanding futures and options on gold and silver to the point that NOW there is 100 times more paper contracts than physical gold. So the central banks and their fake private companies simple sold gold short at critical times to push the price lower, sometimes $20 in a day. No way would any real investor do that as the price recovered and those shorting it lost money. But the central banks PRINT money, so they don’t care how much is lost. Now there is too much buying of physical gold around the world and paper gold can’t keep a lid on it. With more money printing gold will go much higher. China just announced they had printed an astonishing 5% of GDP in ONE MONTH!
From China’s side, Friday’s PPI data said it is sliding into deflation again – and borrowing for January was insane. I won’t describe the numbers because they are so large it is meaningless. Yes, this is one month, and Lunar New Year means we need to see the February/March data too; but if the January pace is kept up China is already throwing the whole kitchen at the economy. It borrowed FIVE PERCENT OF GDP IN ONE MONTH. That’s 60% of GDP in a year. China GDP is about 13 trillion, so about 600 billion money printed IN ONE MONTH!
Behind the scenes we know that Russia and China have been accumulating gold, especially Russia. At some point the paper gold contracts run into the lack of the physical for delivery. If enough buyers demand physical delivery the paper contracts have to follow or one could arbitrage it, buy the paper that was quoted lower than the physical. I believe that is going on now but I can’t confirm it. Traders can’t seem to figure it out either: