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Tuesday, February 12, 2013

Long-term Gold Buyers Smiling

The Chinese New Year which temporarily removes Chinese participation often creates a demand vacuum in the physical gold market. These demand vacuums often setup elevator-shaft (sharp) declines.  Since the physical market heavily influences its paper counterpart, a demand vacuum in the physical market makes it easier for shorts to 'press' the paper price to extremes.  The trick for the operators is trying to time or create these demand vacuums.  The Chinese New Year makes timing easy; the elevator shaft decline generated from them while generating frowns across most of the investment world are eagerly awaited by long-term buyers.

Gold will be 'pressed' as long as possible, so WA reading of 0% is not inconceivable, but TIME is running out.

Chart: London PM Fixed Gold and GLD (ETF) Total Assets WA Stochastic Exponential Moving Average (13DEMA)


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