Gold's Coming Rise
by Darryl Robert Schoon
predictions, especially about the future.
~ Casey Stengel
Last year on
September 6, 2011, gold reached a high of $1920; but when bullion
banks intervened by pushing gold lease rates deep into negative
territory in early September, they made sure enough leased gold
would reach the markets to drive the price of gold lower.
By late September,
gold had fallen back to $1600; and when gold began to again rise,
gold lease rates were pushed even lower forcing gold this time below
$1600. The bullion banks one-two punch took the momentum out of
golds 27% summer rally and by years end gold would still
be at $1600.
on image to enlarge)
In 2012, between
March and August, gold traded between $1550 and $1650 until late
August. This tight trading range persisted even as global economic
conditions deteriorated; and, gold, a barometer of economic distress,
should have risen higher. It didnt.
I read Sandeep
Jaitlys Gold Basis monthly newsletter with interest
and, as golds trading range remained intact for much of the
year, Jaitlys advice remained remarkably consistent; his study
of the basis indicating gold and silver were moving into increasing
backwardation and accumulation of both metals was recommended.
On July 25,
2012 with spot gold at $1602, Jaitly advised:
from 4th Julys missive is reiterated. August gold has now
moved into actionable backwardation (positive co-basis) which
is progressing higher. September silver is also in an acute backwardation
that is progressing higher as well. Both of the metals will be volatile
going forward and advantage should be taken on any dips.
[bold, mine] Both of the metals are being taken off the market
or equivalently peoples intention to sell either
metal in size is diminishing rapidly. This is what the bases are
What is memorable,
however, is Jaitlys mid- August advice which still recommended
buying gold and silver; but, this time, Jaitly wrote the opportunity
to buy on dips had passed. Jaitlys observation was remarkably
prescient. The next week gold rose $50 to $1670 and there
had been no intervening dip to take advantage of a lower price.
latest rise of gold is the beginning of golds long awaited
ascent is unknown. What is known is that gold has broken out of
a protracted trading range, that supplies of physical gold and silver
are increasingly tight, that the willingness to sell is diminishing
and macro-economic factors, e.g. more Fed bond-buying, rising food
and fuel costs and falling global demand, will all contribute to
golds explosive rise when it does happen.
Jaitlys Gold Basis Service is available
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© 2011 321 Gold