The Phaserl


Gold Markets are not Efficient, Don’t Reflect Fundamentals & Understate Gold’s Market Value (part 6)

by Julian D. W. Phillips, Gold Seek:

The Sea on the Shore

The gold market is split up into three types of factors that take us back to our analogy of the sea-shore. The three elements of the sea at the seashore are the waves, the tides and the overriding currents.

In the gold market these become:

1. Waves – The short-term, day to day moves of the gold price driven by speculators, traders, high speed trading and the triggering of stop loss protections. These can be as small as day-traders, taking positions in the morning and closing them before the close of the day. They can be as large as the bullion banks throwing huge amounts of gold at the market to force it to be volatile, while making enormous profits in the Futures and Options markets. They too close their positions so that over time, the ebb of the waves is covered by the flow. This is a constant two-way action of volatility that traders milk for profits.

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