What Happens To Gold And Silver Next? Look Out Below?

@Miggs

how are you my friend!

To me, I compete everyday with HFT and I find it to actually help with trades. This is the thing and is not discussed publicly- HFT runs on algo's. These algos are based on humans and basic trading principles. These principles and algos show their hand constantly.

So the HFT's dont interfere at all with supply and demand. If an asset is rising, they push the price up and conversely, assets drop, they push prices down.

I think it has something to do with taxes and the housing bubble when it burst. One of the knocks against them was they didnt have the hard assets to cover the amount they were lending, this would obviously address that. I think they also get some sort of tax break for money held that way as opposed to sitting on it. There may have been some requirement with the bailout about what they do with their money in terms of holding assets as well.

But theres also the part that they dont necessarily need to make money on gold to make money on it. If they see positive movement in their stock prices by touting their metal holdings the value of the metal could be bleeding away while theyll still be ending up on the positive side of the investment.

Between tax/banking laws, stock prices, and public perception its so overly complicated you could write a dissertation trying to figure it out.

I agree with @basebal21 again,,Cosmos

That was the prime minister's call Gordon Brown
That was a doozy on his part, he's still getting flack over that idiotic decision to this day

"When Brown decided to dispose of almost 400 tonnes of gold from 1999 and 2002, between the prices of $256 and $296 an ounce, he did two distinctly odd things.

First, he broke with convention and announced the sale well in advance, giving the market notice that it was shortly to be flooded and forcing down the spot price.
This was apparently done in the interests of "open government", but had the effect of sending the spot price of gold to a 20-year low, as implied by basic supply and demand theory.

Second, the Treasury elected to sell its gold via auction. Again, this broke with the standard model. The price of gold was usually determined at a morning and afternoon "fix"
between representatives of big banks whose network of smaller bank clients and private orders allowed them to determine the exact price at which demand met with supply.

The auction system again frequently achieved a lower price than the equivalent fix price. The first auction saw an auction price of $10c less per ounce than was achieved at the morning fix.
It also acted to depress the price of the afternoon fix which fell by nearly $4.

It seemed almost as if the Treasury was trying to achieve the lowest price possible for the public's gold. It was."

It almost looks like they did it on purpose... (to save the financial system)

wow what a volatile trading session. Lets look closer!


We turn to our proxies, first looking at GLD. for a good part of the morning session GLD churned lower and in the late afternoon turned higher to flatish and closed lower but off its highs. It seems we are getting the same continued action- stocks higher, gold lower, stocks lower, gold higher. The other thing is that gold is right now within areas of support going back 4 years ago.

For the day, GLD turned in a lower high but higher low. It appears it is settling into another of its ranges, on the lower end.

Silver continues to essentially do nothing. Just chopping around bouncing in the same area. I call it a no mans land. Looking at our proxy for silver, SLV we see today it up in a lower high and a higher low.

So, both are still stuck in downtrends. They are broken. As I always say, this range will end and thats what we are waiting for. Price action wise, odds favor another leg lower but I wouldn't be surprised that we get some head fakes before the move of importance happens.

Sentiment tends to be going around, expecting a move lower. That might stall things for a bit. Just be cautious going forward, this is not the time to be buying bullion coins.

@yup
Gold on the move, what are you seeing?
I'm reading;
Gold jumps 3 pct; US budget deal seen delaying stimulus cut
"Gold prices surged more than 3 percent on Thursday as the dollar stumbled"

"With prices showing little further weakness after a deal was struck on the debt ceiling, short positions, or commitments to sell, were squeezed, forcing prices higher."

"There were probably lots of shorts in the market, hence the probe of the lows in the last week or so, and all of those guys have been wrongfooted, and have had to cover."

Gold spot price jumps on US downgrade by Chinese rating firm

BTW, this AM the biggest joke was the action by the China rating firm,,, which caused a big "who is that"? lol