It’s auspicious that it’s a trick-or-treat market. The trick is that the collapse in gold and silver, particularly gold — having retested the $1,180 chart point three times, it violated it today. Second is that the S&P and Dow Jones are making new highs. All of this is coming after the Fed’s announcement that quantitative easing is over. And there is a terrific correlation between the S&P and quantitative easing, with the S&P being up roughly 40 percent as quantitative easing injected something like $4 trillion. So we know where that money went. At the same time, the GDP numbers came out and all this contributed to the strength in the U.S. dollar.
The ‘treat’ for gold investors is that physical buying remains very strong. Evidence coming out of China suggests that they have already bought somewhere around 1,500 tons of gold and they will probably buy at least another 200 tons before the end of the year. So they continue to buy at better than 100 tons each month. This evidence comes from the drawdowns on the Shanghai futures exchange, where in one week alone they withdrew 68 tons of gold. The Chinese have been buying the gold that we are selling in the West.
Please follow SGT Report on Twitter & help share the message.