On the chopping block

Paulo · Oct 10, 2012

Interesting blog by TF Metals Report tonight...

While it seems that "everybody and their brother" is now expecting a sharp pullback, I'm not on that bandwagon...what I see is this:

As stated here often as of late, all reports are that physical demand in London remains robust, regardless of dips or rallies in paper price
***Gold priced in euro and Swissie just made new all-time highs last week and have been preceding gold priced in dollars by about 4-6 weeks.
The desperate move by The Cartels, particularly JPM in silver, to add shorts and contain price creates a condition of extreme UPside potential if longs don't capitulate and are, instead, emboldened.
RSI levels in both gold and silver have worked off excesses built up during the 4-week rally from mid-August to mid-September.
The silver smash of 5/11 and the gold smash of 9/11 both came during periods of ending or non-existent QE. The Fed just announced QE last month and those $ are just beginning to slosh around. Give it time. Additionally, QE only adds to and increases global demand to exchange fiat for hard assets.
So, call me crazy but I'm a contrarian here. (Even though, as I type, I see gold being smashed down to 1766 and silver well under $34.) The dollar has rallied and reversed from its head-and-shoulder top of last week. This has surprised many (including me). The algos then use this $ strength to game the metals and any weak hands with sell-stops. The Forces of Darkness might throw on some new shorts, too. Again, though, I do not expect any serious downside momentum to develop. I suppose you could get a dip toward $1750 but that's about it. As long as the QE-inspired physcial demand remains strong, prices will ultimately reverse and head back higher.
Click to expand...

http://www.tfmetalsreport.com/blog/4248/chopping-block

***Interesting point of all time highs in gold in the Swiss.

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On the chopping block

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On the chopping block

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