Bond ‘Breakdown’ Hits Gold and Silver

Posted by on March 15th 2012 in CFTC, Federal Reserve, General Economy, Gold, Goldman Sachs, JPMorgan, Monetary Policy, Quants, Short Sellers, Silver, Ted Butler, Wall Street | Be the first to comment!

Dan Norcini tells King World News that “the reason gold is getting hit so hard and by consequence silver as well, has to do specifically with the action in the bond market.  To start the year, I told KWN readers and listeners the most important market in 2012 was going to be the bond market.  The bonds have had a massive breakdown…. What you are seeing take place, at this immediate moment, is a rush out of the safe havens, the bonds and the gold market.  Most of the money has been flowing into equities.”

He goes on to describe a long-term pattern in which “Hedge funds buy paper gold and silver, pushing the prices higher on momentum and the bullion banks or commercials are on the sell side, building up a sizable short position. When the market begins to break down, the hedge funds turn into sellers and the commercials use that liquidation to cover their short positions.

Most of the commercial short positions were put on near the $1,800 level and they are all in the money.  This type of price capping and manipulation by the bullion banks is just business as usual as far as I’m concerned.  Longer-term, the reality is gold & silver are still in the middle of a spectacular bull market.”

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MarketWatch:  Gold futures rebound 1% on bargain hunting, dollar; silver gains 1.7%

Zero Hedge:  Why everything is up today – from Goldman: “Expect the new QE as soon as April

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Amity Shales:  Watch Bernanke’s ‘little inflation’ capsize U.S.

Telegraph:  Britain’s inflationary route to default

KWN:  Jim Sinclair – Is the Fed selling Europe’s gold during interventions

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