Heavy Buying into the Close: Big Week Ahead For Gold, Silver, & Mining Shares?

by The Doc and Eric Dubin, Silver Doctors

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In this week’s Metals & Markets The Doc & Eric Dubin Discuss: 

  • Today’s vertical move in gold and silver early in COMEX trading, and heavy buying of mining shares into the close- is momentum building for a freight train runaway move in the metals?
  • With gold set up to mount an attack on $1200 early next week-  Eric makes the case for a BIG January rally!
  • The Doc breaks down retail silver demand and Ted Butler’s theory that JPMorgan bought 20 million Silver Eagles in 2014– do the numbers make sense? 
  • How will the end game play out?  A deflationary collapse, or a hyper-inflationary supernova? 

The SD Weekly Metals & Markets With The Doc & Eric Dubin is below: 

 

 



 





The cartel leaned on precious metals to manufacture a small 2014 loss for gold.  Based on the nearest COMEX contract (February), gold settled at $1,184.10 an ounce, down 1.4% for the year.  But even with periods of downside volatility they were able to generate throughout December, the reality is that the cartel is stuck playing a game of whack-a-mole.  Spot gold reached an intraday high of $1,210.90 on December 30th.  Even more telling, as we discuss in today’s show, today’s LBMA trading clearly shows physical demand supporting and even lifting the market, with silver following along for the ride.  

The cartel tried to push prices significantly lower.  But the scenario I outlined played out, and I think the set-up for the rest of that scenario still holds.  There’s a good summary of that forecast within last week’s show write-up and my “Flying Wombat” comments under the write-up.  To access the page, click here.

 



The short-term trend change in GOFO fits nicely with this pattern, as we have been slowly moving back towards positive rates.  This week’s trading, even with the periodic capping and smashing, still represents the “retreat” part of “managed retreat.”

gofo-dec31-2014
Going into the close and during aftermarket trading the GDX precious metals mining shares ETF rallied to finish normal session trading with the 3.05% gain.  Big money investors are sniffing around the sector overall, and January should be a good month for precious metals.

Round Table Discussion Next Week:  Sound-off below  

One of the key issues everyone is going to have to wrap their brains around this year concerns how the end game plays out.  We believe we are moving through the early stages of the end game.  Last April, the long-end of the bond markets started to reflect hedging by big money against a deflationary end-game (along with ongoing financial repression and associated direct asset purchases by central bankers, declared and clandestine).  Oil and other commodities joined the trend, especially during the second half of the year.    There’s a distinct possibility that with a sufficient catalyst, a deflationary spiral could develop faster than central bankers can counter.  Then there’s all the fur flying on the geopolitical front, and the petrodollar as the tip of the spear of the dollar reserve standard.  The IMF will meet later this year to discuss voting share and SDR basket composition, and China and the rest of the BRICS stand to gain power.  Incidentally, there’s an ongoing debate between analysts as to what China’s intentions are vis-a-vis the IMF and the SDR basket.  Frankly, both sides of the debate are correct to some extent because China is playing more than just one game of poker.  She’ll gladly take more IMF power and the renminbi is going to join the SDR basket.  But at the same time, China is building an entirely parallel system.

We will discuss subjects like these at next week’s round table.  We welcome questions you would like us to address.  Bill Murphy, David Morgan and Alasdair Macleod will join the Doc and I for what will certainly be an interesting discussion.  Post questions you’d like us to address in the comment section below.

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