Latest Attempt To Break Gold Will Fail Says Markets

Jim's expectation that the "cartel" will attempt another takedown of gold next week is justified. They and their highly concentrated short position realize that the probability of an accelerating up trend grows with each passing session. The means that the urgency to reduce their controlling positions (21.26% net long as percentage of open interest) ahead of the acceleration is extremely high (chart 1).

Chart 1: Gold London P.M Fixed and the Commercial Traders COT Futures and Options Net Long As A % of Open Interest


Any weakness in gold is likely to coincide with weakness in stocks. This dependency was again displayed in Friday's trading session. While the equity bears are growling again, they are likely missing the signs of accumulation (chart 2):

1. 5/14 breakdown gap closed on increasing volume 6/29 suggests increasing upside force.  This is bullish.
2. The high volume, 1.09 billion, breakout gap created on 6/29 should act as support.
3. Friday's trading session begun the process of "filling the gap" on shrinking volume, 595 million shares.  This suggests decreasing downside force and illustrates accumulation.
4. Accumulation in the stock market hints of another failure to break gold in July.

Chart 2:  NYSE Composite and Exchange Volume


The debt crisis is expanding and evolving at an alarming rate.  In other words, 2012 is not 2006 or 2008.  It's much worse.  Neither trading Whales and governments can oppose the flow of capital for long.  This is why this attempt will fail and a decisive buy signal will be generated by August (chart 3).

Chart 3: London PM Fixed Gold and GLD (ETF) Total Assets WA Stochastic

Next week is the war between manipulation of gold by the West, and appetite for buying gold in the East, both from friendlies and enemies. Anyone that does not see today's gold market as a rig is blind or brain dead.

Next week will be the time the cartel tries to break the gold price again. They have failed seven times, and will fail on the 8th. Gold is going to $3500 and above. All the lying and conniving only means the price will go higher. Just as Morgan’s whale could not fight the market, the cartel cannot fight gold as we have a flight away from all fiat currencies.

Source: jsmineset.com

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