I apologize for my lengthy absense from the blog. I was sick for a period, and then had to catchup on work (to my 5 faithful readers – I know you are out there).
In any case I have returned, with a brand new technical formation that makes a quite common appearance on the charts of the precious metals. To illustrate I have uploaded a hourly chart of gold.
The trick of course is identifying what the price action is telling you. Now I believe that these “homohammer” (for those of you offended by this terminology, I suggest you stop being fucking ignorant and take it in context as the colloquialism it is intended as) formations indicate a what the big player(s) are doing. This is, incidentally, why we also saw a few coming into the end of the month – it is time for window garnishing, taking profits, and reallocating capital for hedgies. What we saw today was some serious conviction buying, pushing gold to all time highs and silver to 31 year highs. I don’t know who is still short the precious metals – or why you would willingly be stepping in front of the train at this point – but people are. Now I am not even going to say that these people are wrong, and gold and silver aren’t inflated, however there are significantly easier ways to make money than shorting the PM’s in this age of fiat creation. I expect this to lead to some short covering soon, adding fuel to the flames.
In a somewhat related note: Ben Bernanke has a brilliant new thesis: commodity inflation is what is causing inflation in the USA. Honestly, how this man got a PhD is beyond belief. Major commodities are priced in USD and he has printed trillions of them, which is about all the rebuttal you need to that.
Full disclosure: Long gold, silver and several miners.