Loading ...I shall now describe to you all where the technical analysts go awry; it lies in the realm of “data”. Where they all fall upon sharpened Swords of Damocles is in their total and uncompromised abilities to worship at the altar of raw data in the form of “charts” or as an old mentor used to say, “tea-leaf reading”. Their arguments are that interventions fall into the category of “events” and that the term “manipulation” is irrelevant because of the duality of both bearish and bullish manipulations. I argue that the bullion bank traders working in the space as “Commercials” have unfair advantage in that they are permitted (and some would say “encouraged”) to orchestrate price movements that create the illusion of technical “events” such as breakdowns or breakouts. These events are designed to trigger buying by technical funds, by algorithm-driven funds, by Large Speculators, and by private investors. This happened back in early June when Commercials nudged gold through a technical “resistance” level around $1,260 and then fed thousands of ounces of synthetic “gold” into the market to do two things: 1. Satisfy all demand generated within the traditional technical funds, Large Specs, and private investors, and 2. Cap the rally. By definition, point 2 falls into the category of “manipulation”.
Here is the COT report from May 16th with aggregate Commercial shorts at 142,859 and the gold price at around $1,230. There is no evidence of an impending rally based on the activities of either the Commercials or the Large Speculators. In other words, there is no “event” that would imply a bullish intervention.