The money flows below confirm this expectation.
Chart 1: Gold London P.M Fixed and the Commercial Traders COT Futures and Options Net Long As A % of Open Interest
The scramble to cover in the relatively tight and small silver market is even more noticable and urgent.
Chart 2: Silver ETF (SLV) and the Commercial Traders COT Futures and Options Net Long As A % of Open Interest
The setup is simple. Money moves first, then the explanations or events come out later.
Headline: This Major Fed Move Is About To Create An Explosion In Gold
I believe the cyclical period of deflation that I warned about several months ago is now close to an end. The Fed, foolishly, feels compelled to stop the rise of the U.S. dollar, and will soon opt to follow the lead from the ECB and stop paying interest on excess reserves. That move will not increase bank lending to the private sector, as much as it will force banks into purchasing even more sovereign debt. If the Fed does indeed go down that road, I would expect to see U.S money supply growth increase significantly. This will cause gold and commodity prices to soar and the dollar tank. I would also expect to witness the global economy sink ever further into the stagflationary abyss.”Source: kingworldnews.com
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