from TF Metals Report:
The GLD is once again being drained of “inventory” during a period of rising prices. Is this a sign of tight, global supply? Unfortunately, we can only speculate.
As we’ve diligently established over the past eight months, the paper price of gold is now largely controlled by daily changes to the dollar-yen. HFT trading algorithms now control nearly every “market” and, within paper gold, it appears that most HFTs are set to sell gold as the yen declines versus the dollar and buy gold as the yen appreciates.
Here’s the past three years of correlation, with the yen in candles and gold in bars:
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