Gold & silver are both heading much higher over time, but the key question is when? Could be…
It started in the late hours of Sunday the 8th and the early hours of Monday the 9th, when swimming alone, in the darkness, I encountered a co-ordinated ambush from a group of unsavoury animals.
To my right, a Cantil, a venomous pit viper, that causes necrosis, haemorrhage, and renal failure, was luring me to his attack range by mimicking a wriggling worm. In front, a large, motionless alligator turtle with its powerful jaws wide open. Its tongue also mirroring a scrumptious looking worm. I don’t know about you, but in normal circumstances, I am very partial to a tasty, wriggling worm and teetered on entering and feasting on it. To my left, I fleetingly saw the fleshy tentacles of a snake devouring a fish in milliseconds and overhead, a black heron, hunched over the water, portraying a dark canopy with its wings to block out any moonlight, was brutally beak stabbing some of the fish, attracted to the supposed safe waters, to death. I tried, in vain, to escape the dangerous waters only to come face to face with a group of assassin bugs in the trees, disguised as ants, tucking into a buffet of ants and ambushed spiders. Higher up, a worried group of male monkeys were being attacked and devoured by Margay’s, after mischievously misrepresenting a distressed baby monkey.
Sound a bit far-fetched? Nope, just a normal Sunday night in the venomous gold and silver trading pits. It was very clear officer, that on the Sunday night in question, when it was quiet, and liquidity was thin, a crime scene was unfolding. Predator’s lurking, working together, ready to feast on me, my portfolio, and any other poor like-minded soul. Parasitic female cuckoo bees, sneaking around, killing the queen, whilst the unsuspecting sleep.
You see, all these unsavoury animals are so like the unsavoury characters who populate the markets. $4 billion or 25,000 contracts dumped on the gold market on a Sunday night when the western world is asleep, and parts of the Eastern world is on holiday and causing it to drop nearly $100 to $1660.
Maybe I should stop blogging, if it continues to prompt ‘a nasty $100 drop in the blink of an eye’ moment, within 10 days of my last blog. Maybe I should take responsibility because no one else will for this blatant, manipulative attempt to drive prices as low as possible to help the criminals to cover their shorts. ‘I am sorry, it really was selfish of me to do that when liquidity was so thin. Hopefully, you are not all scarred for life, and I promise it won’t happen again.’ The only certainty is that it will happen again. I have experienced it so many times in the last 20 years of trading and have earnt my stripes by experiencing them, weathering them, and buying when there is blood on the streets. It’s only an ambush if you don’t expect it. I said a test of $1750 or $1675 was not out of the question, and whilst I did not want or expect it to happen so quickly, I was prepared for it, with sufficient dry powder on the side to pick up some very beaten-up mining companies. ‘Thank you, whoever you are, for the discounted prices. All purchased on the day of the beating and put in my back pocket. The mere fact that you are resorting to such blatant beatings, is enough for me to know you are hiding something behind the scenes and are in trouble, deep trouble. You are simply driving the paper price down to purchase physical at a lower price.’
Talking to an invisible, manipulative, corrupt and ruthless foe, may be the 1st sign of madness or maybe the 2nd, after trading these manipulated markets, but what prophetic words can I conjure up for you this month? After all, a broken clock tells the right time twice a day, so maybe I am on an unstoppable run? The simple truth is I have no prophetic words because neither I nor anyone else really knows what’s in store for the precious metals in the short term. I am convinced they are both heading much higher over time, but the key question is when? Could be next week, could be next year, could be 10 years from now.
The year-long downtrend is still in play but I am hopeful we have experienced the final bloodbath phase; hopeful that all engineered cleaning of stop losses is complete; hopeful we triple bottomed at $1675; hopeful that all downside gaps have been filled; hopeful that traders are feeling as much fear as me and hopeful that my generous gifting back of a large tranche of last-years profits, back to these invisible, corrupt and ruthless foes ends sometime soon.
The Charting Centre
I miss my football playing days. I now run an adult team, but it is nowhere near as good as playing. The camaraderie; the celebrations; the combat. A playing field of testosterone v testosterone. I miss it all. Perhaps it’s the loss of combat on the pitch that makes me consider trading against criminals as a battle to the death. Perhaps it’s the still competitive streak in me that wants to win the fight. Perhaps it’s the clear guidance in my upbringing of what is right and wrong that gives me the mental fortitude to put one over on entities with less morals and principles. Who knows? What is clear is that they’ll be a lot of precious metal traders, investors and stackers who feel the same way and I feel good that I am part of that global team. Honest thoughts: honest money and an awareness of how crooked this world really is, is an advantage that few have. Knowledge, resilience, and patience will see Team Gold have a very successful up-coming season.
Football games are played in the open for all to see. They are transparent and you can see who your opposition is but in the murky world of trading, that is not always the case. The opposition could be individual sovereign states or Banks; sovereign states working together or Banks working together. Maybe Banks working with sovereign states. You will see them on the other side of the pitch, but they will all have different colour shirts on. Their purpose is to confuse you and to score. I stall at calling them enemies because the biggest enemy to Team Gold is us. I read a lot these days about ‘starving the beast’, ‘stacking’ and ‘beating the shorts’ but in truth, the only way to get higher precious metal prices is for demand in all investment areas to overwhelm supply. It really is as simple as that. There must be many more people buying physical or allocated accounts than selling; many more people buying mining shares than selling and many more people buying unallocated ETF’s, spread-betting and other paper markets, than selling. The biggest factor is an increase in the flow of money from other markets into all these vehicles so that supply is overwhelmed. As with the 1970’s, it will happen. The second biggest factor is that everyone should be aware how crooked the paper markets are and how, ultimately, the paper price may go to zero. It is difficult to trust any market these days but essentially, we are all on the same team and we should never forget that.
Plenty to rant about this month
Afghanistan is an absolute tragedy. Someone in the weak, wobbly, Biden administration should have a loud word in the senile fool’s ear and explain what the phrase “I’ve got your back” means. Probably originating in WW2 commando raids, it refers to the courage of men and women who pressed forward 1st and who needed protection from enemy soldiers who could be anywhere, including right behind them. Biden and his administration are not watching anyone’s back in Afghanistan. People who have put their lives on the line over 20 years, abandoned and sacrificed to the Taliban.
Whatever your thoughts are of whether troops should be there or not, one interview and one speech captured my thoughts on this harrowing situation. A sprightly 100-year-old Colin Bell, who served as an RAF Pathfinder pilot in World War 2 said that unless there is “intent to win” a war and “crush the enemy with massive force” the military should not be” getting involved in a fight”. The speech, from MP Tom Tugendhat, who served in Afghanistan, was greeted with cheering and applause (not normally allowed in the House of Commons chamber) when he said it was with ‘great sadness’ that he was to criticise the US, noting: ‘to see their commander in chief (Joe Biden) call into question the courage of men I fought with, to claim that they ran is shameful’ and ‘those who have not fought for the colours they fly should be careful about criticising those who have.’ This is a clear abdication of US responsibility in assisting the withdrawal of troops, civilians, and refugees from Afghanistan.
As we witness the continued loss of US influence and respect in the world, we will see a meaningful move away from the dollar, which has always derived its strength from US domestic and global dominance. In my simple brain, the equation: crumbling empire and dollar + unmanageable growing debt + inflation = higher gold and silver prices.
Hats off to all ‘A’ level students this year with 45% of all pupils this year achieving A’s or A*’s. I really do congratulate the students because they’ve had to endure 2 years of unprecedented disruption. My own daughter has not had a typical university experience, so my sympathy goes out to all those who have travelled through the education system in the last 2 years, but as usual the authorities have cocked up. Not wishing to miss out on everything else such as food, raw materials and prices generally suffering from inflation, we now have over-inflated grades. Is this generation really cleverer than its previous generation of 2019 in getting 75% more A’s or A*’s? Or is it the Government glossing over the disorder and ensuring grades depict a system that perfectly weathered covid disruptions? Fiddling the figures to portray an illusion that all is well, and no one having a bad examination day. Mmm, where have I seen that tactic before? Let’s print ourselves out of trouble; let’s fiddle the exam grades; let’s keep stock markets buoyed high; let’s keep Gold and Silver artificially depressed to present a perfect world, so you vote us in for another 4 years and the whole charade continues. Well, judgement day will arrive and in many ways it already has. Once the exam celebrations have finished, the authorities will have to look ahead to next year to consider how they bring these helium balloon results back down to earth. If you’re a C or B graded student in 2022, make sure you let prospective employers know that you would have been an A or A* graded student had you taken your exams a year earlier.
Disrupted supply lines in the UK, are usually linked to Brexit because that’s what our still wounded liberal press want us to believe. Get over it. The reality is that this is a global problem with surging delta variant cases stunting factory production and disrupting shipping. When you have countries, companies and ports going into lockdown when one covid case is identified, it’s going to impact on the supply of everything. Shortages of key components; rising raw material and energy costs are causing shipping containers to be 10 times more expensive than May 2020. Shortages in Nando’s chickens, magnets for Rubik cubes, semi-conductors, bikes, the list goes on. I am lucky I live in the UK where the Government still, marginally, has one eye on maintaining jobs and growth in the economy. Whilst other countries such as New Zealand and Australia, have incredibly successful covid stats, time will tell whether their economies, small businesses, and young people’s mental well-being were sacrificed in the process. Detached youngsters, with a lack of hope and damaged supply lines of goods, are a sure-fire recipe for civil disorder.
I don’t pretend to be a medical expert or scientist, or even a conspiracist (ok – maybe sometimes), but I do read a lot and I am reading a lot more about vaccination related deaths; potential covid cures from Eli Lilly being put on hold and studies that show natural immunity is 13 times more effective than vaccines at stopping the delta variant. Are my initial concerns around the vaccines coming to fruition? Who knows, but I am becoming more and more sceptical as time goes on.
I succeeded last weekend in following my last blog’s own advice, to get back up after being knocked down. Lubricated by a few pints of England’s finest ale, an empty car park witnessed a 50m sprint between myself, a friend and his 9-year-old son. A rematch of a classic sprint 10 years earlier, the quiet, summer night was interrupted by a high-pitched squeal, as 2 torn hamstrings propelled me through the finishing line. Whilst I got back up and was declared the winner, 2 very painful weeks have ensued, and thankfully, I am slowly on the mend. Is this a physical metaphor of the Sunday night massacre at the start of August, which has seen a mild recovery since? It will take time to repair both the precious metals markets and my hamstrings, but I really think it is.
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Stay safe and see you next month. I am Sheep Shearer and I shear sheep.
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