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August 11, 2011 / Hal (GT)

CME hikes Rates and gives gold a speed bump.

Gold is heading down now after getting up to $1,815.00 and it looks like we can thank the CME for this breather that has caused the gold bull to slow down in order to get over the speed bump without breaking a leg. For this we thank you CME. Sometimes the bull needs to be slowed to keep it from breaking a leg. So in a way the CME is helping the gold bull find a level plateau to rest and restore its strength. Which is giving some traders opportunity to take some serious profits.

And this I think is part of the secret. The governments can not allow gold to rise too far too fast. In one way I think they are dependent upon gold rising at a manageable pace because it is what their currencies are being judged against whether they are willing to admit it or not. After all they consider it an “asset” and are doing what they can to add it to their central banking balance sheets. And their hope is to buy themselves some time to figure out a means to save their fiat currencies. If gold rises too fast the regular people on the street are going to know that the fiat currencies are untrustworthy and worthless. And then the riots we’ve seen in England recently will look more like a tennis match.

(I just got to reading a piece by Peter Grandich, linked below, where he worries about gold going parabolic. This is a worry of mine as well, and it’s why, in my opinion, those CME rate hikes are good for the bull run long term.)

Right now the widget is reporting gold at $1,758.80. It looks like it may have found a bottom this morning. Time will tell as we go further into the day.

Here’s a 10 year chart of gold’s bull run. It’s a steady climb in my mind.

10 Year Gold Chart

10 Year Gold Chart

CME Hikes Gold Margins By 22% And Gold Drops by….0.4%, Resumes Climb <- JervisCapital tweeted this late last night.

Don’t Bet Against Gold or Silver

The Battle Begins <- Jim Sinclair

Now that we have reached $1800 gold, what should you do? <- Also from Santa Jim.

Lear Capital: Gold Soars Will Silver Follow? <- “If you could print money, which would you buy – silver or gold?” Important read with some info that makes some clear points.

Lear Capital: Did the Credit Downgrade Cinch Future For $4,000 Gold?:

Two days ago, JP Morgan echoed this sentiment calling for gold to hit $2500 by year-end.  That’s a bold claim one expects to hear from a gold company, not a bank – but there it is.  You might as well get used to it.  We live during a time when printing money is necessary to maintain this economy – and we will get it!  Globally, this could destroy the dollar’s rank as the world’s reserve currency but there is no choice

Embry – Fed & QE to Cause Financial Collapse & Hyperinflation:

“The real event that pushed it over the top was Mr. Bernake’s action when he said they were going to freeze rates at close to zero for two years and intimated they would take even more aggressive action.  This just confirmed my suspicion that the economy is starting to implode, they are beginning to realize this.  When you put all of these combinations together this is extraordinarily bullish for gold and silver, although silver hasn’t really reflected it yet.” – John Embry

London Trader – Many Gold Shorts Wiped Out, Lost Everything! <- more from KingWorldNews.

Update 7:45PM EST Gold $1,810 <- This update from Peter Grandich is worth a read.

How the Market Panic Is Affecting Oil <- From Casey Daily Dispatch. It’s the preamble to the article that caught my attention:

“The beatings will continue until morale improves.” I tried to track down the origins of the quote with no luck. For anyone who has been the victim of poor leadership, these words should ring a familiar bell. Sometimes the incentives offered are almost comical.

In yesterday’s FOMC press release, Bernanke pretty much said the same thing.

Emerging world buys $10 billion in gold as West wobbles <- ht to Global Syndication Digital Gold Currency Magazine.

Ed Steer’s Gold and Silver Daily <- Always a stop for me and should be for you too. Glad to see Mr. Steer noticed this too, and I’m not in the least surprised. Also click over and be sure to read down to the paragraph from Ted Butler:

“By the way, in case you missed it, there was something that happened yesterday that hasn’t occurred for many, many years.  The gold price closed higher than price of platinum….

“…Gold is now trading as a currency in its own right, independent of all fiat currencies…and I expect that trend to continue well into the future.”

Lear Capital: Is the Gold Pull Back a Surprise? <- Discussing the CME and gold’s pull back. Short sweet and full of goodness.

Silver Update 8/11/1 – Fiat Dollar <- Interesting analysis from a fellow on YouTube. “Gold is catching up with silver.”

Market Collapse, Gold & Gold Stocks:

We stated numerous times that it would be no more than 1-2 months after the end of QE2 that we would see QE3 launched OR a major financial crisis.

One month and a few days later and welcome to the crisis.

Market Turmoil <- see markets around the globe priced in gold.

Inflation: A Cure For The Great Recession?

If you liked the past two weeks, you’re going to love the next two years: welcome to the age of instability.

Okay. That’s all I’ve collected today so far.

Right now gold is down to $1,734.70 and continuing to fall. Silver is showing itself to be holding in there better.




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