Well here is one for you if one could turn back time and allow now to be that moment. The chart (BELOW) is a chart many of us have seen before. It is a chart of the US Debt limit and the price of gold. As you can clearly see the price if gold was forced lower (actually manipulated lower) where it now becomes extremely oversold and not reflective of reality. The US Debt limit is currently over the allowed limit but is given a pass (and media blackout) and temporary funding is coming in the form of borrowing from gov’t pensioners until the new official debt limit is increased in September, which is only weeks away. Some ask why even have a debt limit if you are going to raise it every time you exceed it?
The bottom line is that the money centers accomplished their goal, force gold lower so they can kill the canary in the coal mine and buy every ounce from every seller. This was brilliant if you can control the price and play by a set of rules that doesn’t exist for anyone but the money centers.
Gold is clearly over sold (same for silver) and is due for a sharp rise. There will be plenty of volatility between here and $3,500 (first real target) with no significant corrections. Sit tight and watch the same manipulators who forced the price lower now force the price higher.
Our metals positions will do good. Our immediate focus is on FX trading. Our positions are reduced as the currency markets are not in trend mode so we will look to take small profits when possible. When the markets start trending we will be more active and increase position size.
Does this correction look familiar?