timing the market

Good morning and welcome to another Top-Shelf Thursday! The Guess Who greets me this morning with their 1970 hit, “No Time.”

The New York Spot Prices pulled backed for the third day in a row yesterday with Gold closing down $4.30 settling in at $1,280.50, Silver was down $0.03 to $16.97, and Platinum lost $14.00 to close at $919. Well, it seems either the economy is firing on all eight cylinders or the bullion banks are shorting the market bad!!! This morning as I write this Gold has rebounded $5.10, Silver is up $0.04 and Platinum has gained $5.00.

After writing yesterday’s musings, I received an email from Chuck Butler who writes “Pfennig For Your Thoughts” for the Aden Group, and I thought it’s worth sharing. Now before I share it, know that Chuck was a Managing Director for EverBank in Saint Louis before retiring, so he’s no slouch. And he doesn’t get into real conspiracy theories. He is on top of the ball when it comes to understanding finance and the markets. So here are his thoughts:

“Front and Center this morning, "the boys in the band" have taken Gold below its 50-day moving avg. There were more than 300,000 contracts traded yesterday, and once there was some slippage in the early morning trading yesterday, "the boys in the band" (TBITB) decided to pile on and point to the slippage in the currencies and the rise in the Dollar Index as their reason for all the short paper trades... And Gold is not faring well this morning with the early morning trading pushing Gold lower by $4.

Yesterday's damage to the shiny metal's price was $9.70... What? have all the geopolitical tensions gone away? I don't think so! And is the Fed really going to hike rates in December? I don't think so! So, tell me, tell me true, what's behind this assault on Gold all about Alfie? Well, I could give you my conspiracy theory answer, but if I did, you would probably think that I've lost it... So, I won't, that is, unless you want me to.... Oh? You say, you want to hear it? OK, hold onto your hats... And for those of you not into conspiracy theories, then skip ahead, go ahead, my feelings won't get hurt!

OK, for those of you who wanted the conspiracy theory it goes like this... First of all, you must recall the "big price reset" thought that James Rickards has for Gold... And then think about all those short positions out thee in Gold. More than 90 days of production it would take to equal the short positions on the books.. So, what's the only way the institutions behind all those short positions are going to make money? That's right, if the price of Gold continues to drop, but what happens to all those short positions if the "big price reset" happens tonight or tomorrow or next week? Those institutions take HUGE losses... So, in my mind, these short Gold paper traders are rushing to push the price of Gold lower so they can close out their short positions, and get ready for the "big price reset"... Sound corny? Well, it's how I see things going on right now, right or wrong, it's how I see it!“

Okay, I’m back. See? I’m not the only one that is scratching his head in bewilderment with these drops in precious metals. The other explanation is that the current U.S. dollar rally together with the “risk-on” mentality in the stock market, the hopes for real tax cuts, a December rate increase, a sane approach to North Korea, and a hawk in Janet Yellen’s seat all culminate in limited investment demands for hard assets, such as precious metals. Wow, have all of the planets aligned or what?

So take your pick. Which explanation fits you better? It really doesn’t matter to me because in the end, all of the numbers that the government reports on jobs and the economy are massaged to the point that they’re propaganda and we are still sitting on $20 Trillion in debt!

Well, I’ll let that be it for today. Go out there and make a difference! See ya’ll later!

*Disclaimer: Precious Metal Musings™ is written for entertainment and news purposes only and should not be used in making purchases and/or sales of precious metals.