To be brutally clear, I never left gold trading, it left me … now that the complete
idiocy of the March 2020 gold pricing scam between futures and spot has ended,
mostly IMHO due to the HFT’s entering into the LP scene, it now can be looked
at again with a different set of eyes … cuz make no mistake, gold is a completely
different market than it was pre-pandemic 6 months ago … let’s be real here, gold
is NOT anywhere near a perfect market, but then again name for me one that is?
… crickets to be sure … stock indices a complete joke cuz of the slippage, and
quite frankly EVERY FX non dollar cross the same … tight bid/offer spreads in
crosses are a “fantasyland of delusion”, where your fill isn’t even close to what’s
being quoted, and the scumbag LP’s can do whatever they want with your order
… major dollar pairs are better [thanks to the HFT’s], but their inconsistent IVIX
INDEX levels day-to-day are a major problem … ditto for crude oil … dead one
day, bat poo crazy the next, stop on a dime and drift, and then a POL and/or
Apparatchik says something and it’s rinse & repeat … all of these markets
beholden to the manipulator POLS & Apparatchiks that control them.
Sure, I wish XAUUSD bid/offer spreads would go back to where they were
pre-pandemic, back in the teens [cents per Oz.], but that isn’t going to happen
anytime soon … most likely never … so, it becomes a question of what’s
“acceptable” and what isn’t … what’s acceptable are spreads in the “thirties''
[cents per Oz.] OR BELOW … what’s unacceptable is anything above that … given
the heightened volatility, increase in daily ranges, increased awareness of the
need for physical gold around the world by the public, AND increased buying of
gold by central banks, notably Russia, China, & India, while at the same time
government debt via the CNTRL-P machine goes berserk, and most days should
see very good volatility levels … although from last week, Thursday & Friday
were pitiful for gold.
There’s another big reason why gold, why now … and that reason is that the
bullion banks are no longer willing to go blindly along with the FED’s “Rally
Protection Team” [RPT] and sell futures contracts as the price goes higher … they
got burned by the FED on policy change before, and it ain’t happening twice!
… as the chart below shows, the March 2020 debacle in price saw massive 50%
reductions in open interest, and the meteoric rise to new all time highs on
August 11, 2020 only saw a small increase in open interest … and with the very
fast & vicious price slaughter of August 11 & 12 [Asian session], open interest
again fell … it’s now back to levels 3 -5 years ago when price was clearly a lot
lower … so, where’s the scumbag bullion bank selling?
Fact is, IMHO, there are probably more metals desks that are interested in
positioning long than positioning short, and using various options strategies like
“short gamma”, to hedge … and while the RPT is still there, unless the FED shifts
its policy away from basically ZERO INTEREST RATES, gold has a very long way
to go on the upside … outside of everybody and their brother getting long and
crowding the position, what’s gonna stop it? … government fiscal & monetary
sanity? … “yea sure, go with that and sleep with the fishes”!
Directly below, the IVIX INDEX levels for XAUUSD [spot gold] & XAGUSD [spot
silver] for last week … please read the footnotes!
And as long as the HFT’s can keep the spread sane in XAUUSD, meaning it’s
acceptable, I’ll trade it … and if they don’t, I’ll simply look at EURUSD & GBPUSD
and see if they are trading in an acceptable manner … ditto with crude oil … quite
frankly, I’d love to see spot silver [XAGUSD] get reasonable, but I’d be surprised
if that happens … that market is wild on steroids, so I don’t see the HFT’s going
below 1.5 cent bid/offer spreads … currently they are around 2.5 - 3.0, which is too
high … in any event, now that the froth has been cleaned out of gold [for the
moment], it’s time to remember what Palladium did first, before gold, when it went
to new all time highs, as it consolidated before taking off again … that chart
directly below … and somehow if people are stupid enough to vote for “Looney
Tunes Libtard” Rule come November, look out above!
And that little black rectangle is about where we are on the trajectory for gold
… price hits an all time high by a little, then gets clobbered down, and then look
what happens next … and given governments everywhere proclivity for FUBAR &
QE infinity, there’s only one possible conclusion to how this plays out … so onto
gold, and let “the pony run wild”!
… until tomorrow … Onward & Upward!!
-vegas
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