Marshall Swing: Are We About to See New Lows for Gold?

by Marshall Swing, Silver Doctors

The headline reads: “Chinese Premier backs Russia on Crimea ”

I haven’t seen news that mentioned in the Main Stream Media but in recent articles I have explained the battle lines are being drawn.  It appears to many to be battle lines of potential war being drawn, or a potential for WWIII.

But, it is not.

The lines that are being drawn are those of economic freedom from the ravages of the U.S. Dollar and its manipulative efforts around the world.  The Federal Reserve and those who control it want this system of fiat money control of the world’s economic systems and all nations to continue into infinity as they draw the life of independence out of nations and peoples but they know the present system cannot continue much longer to give them the necessary controls to steer all facets of life in the secular directions they desire them to go.

So, a new system is in order and the final designs of it are being polished even as we speak.  It is a system with a hard asset (gold) backed currency that will be the last resort to salvage a chaotic world after the Global Crash of 2015.

But the nations are not going to get what they expect.  They expect independence and what they are going to get is, in fact, order, but this new world order will not grant them control of their own economic futures but it might once and for all arrange the currency system to thrive without fluctuation, therefore, being very dependable.

However, there is an old saying “he who has the gold makes the rules” and that is what we are going to see happen, I believe.

The battle lines of independence are being drawn by the BRICS nations and on another “front” Saudi Arabia and OPEC have asserted their right to market dominance at particular price levels sans challengers.

A Facebook friend of mine from SilverDoctors who lives in Houston tells they are seeing huge layoffs from oil fields and that affects ancillary support businesses and this has a way of cascading through a segment of the economy.

We see this article from Canada how the oil war is affecting households:

Canada-household-leverage-indicators-1992-2014_Q4 (1)

Not a pretty picture!  But this is the inevitable result of fiat money.  No anchor for the paper boat!


If you are one of those people hoping for OPEC to have mercy on the Western Oil world and slow down their output so oil workers and the businesses that surround them can get back to work – this article is for you:

The headline: “OPEC far from blinking in oil price war”

“…some industry analysts expected OPEC to move by its June meeting to shore up prices, and while that could still happen, there are no signs of it.

“They’ll basically go to Vienna for nice weather and good shopping and go back home,” said Fadel Gheit, Oppenheimer energy analyst.”

That is a couple of fronts in the end time economic wars and here is another economic issue that is exploding around the world:

When we think of Brazil, we don’t usually think of drought.  We think of the expansive Amazon River and anacondas and piranha.

Well, unfortunately, Sao Paulo, a mega city of 20 Million people has all but run out of water.  Go figure.

But, its only 20 million people and far away from home, right?

California, by the ocean, is having massive water problems and getting worse every day.  A NASA scientist has come out saying they only have a year of water left.  But, that’s only 40 million people, right?

A caveat to that minor issue is California produces about 33% of the U.S. produce!

The headline: “California’s water supply headed for collapse in just one year; state has “no contingency plan” – NASA scientist

California Drought

And if far too little rain is not horrible enough, here is what happens when too much rain gets into the picture on another continent:

Just when you thought you were safe….

But, enough of that frightful stuff let’s talk gold and silver manipulation!

In silver, we see a renewed commitment on the part of the Large Speculators to take heavy short positions and they gobbled up almost 7,000 of the negative ounces as we also more than 5,100 new contracts added to the total open interest INTO DECLINING PRICE.  Nothing like being optimistic in making miney on the short side and the Commercials are all too happy to take the long sides of the best as they added 2,400 longs.  One thing to notice is the obfuscation in the numbers as we do not see all the long side of the Large Speculator’s shorts represented in the numbers but we know they are there because the numbers balance each week, shorts and longs equally since a contract always has a short and long side.

We do see some division in the Large Speculators as they also take 1,624 of the long positions but the Small Speculators were still piling onto the short side with 1,417 shorts.  Since there is significant division in the Large Speculator it means many are beginning to suspect that a bottom is in and sure enough price has refused to go lower in recent days.  Last night, there was a major operation in silver, in Asia, about 2130PM with about 7,156 contracts trading in a 30 minute period so some sort of change took place there and I suspect Commercial repositioning and we are about to see it manifest and depart from this channel we have been in and around $16.50 for several days.  This operation does not show up the charts below as I filed them during the day on Monday.

In gold, we see the same operation in Asia last night with 27,974 contracts trading in a 30 minute period.  Gold has been attacked somewhat more than silver lately and the price has declined more.

We are roughly 6 months from when I believe we will see a global economic crash and if we think back to last summer we saw Large Speculators beefing up their short positions followed by the crash of metal prices over several months and we are starting to see them build up the short positions once again so it may be time to abandon the remainder of the rise to May then sell and go away in favor of a gradual depression in price psychology over almost 6 months causing holders of physical metal to sell whether they are individuals or countries.

As countries are squeezed by the various economic events afoot, the likelihood they will sell gold for cash looms larger as price declines and they need to shore up debt and currencies.

Over the weekend, during the COT Week, we see a massive attack on gold price and again it is in Asia as many 10s of thousands of contracts move and gold drops over $30 and has declined since that time.  Also, in gold, we see almost 6,000 new total open interest contracts INTO DECLINING PRICE!

How many times do I have to repeat INTO DECLINING PRICE?  Until there are no more gold and silver writers mentioning in articles that it is some sort of strange; phenomena, that’s how long.  I have said many times and want to say it again: higher price is not a function of total open interest when it rises.  More players in the game does not mean price will rise at all because for every short there is a long and for every long there is a short.  Price is always a function of psychology, especially in futures markets.  And lower price in this case is both a function of psychology and manipulation as a number of mines cannot produce for a profit at these levels.

Large Speculators took 25,188 new short positions.  Small Speculators took a paltry 1,054 and they think the bottom is in.  Commercials did their price raid covering 19,547 shorts into a steep price decline and taking 14,498 new long positions.  They love taking long positions into declining price!

In the disaggregated COT numbers we see the massive short covering price raid was almost equally split between the Producer Merchant and the Swap Dealer.  Which bar is it those guys meet for nightcaps after work?

Large Speculators or Managed Money lost 8,247 longs.

That’s it for the recap.

It appears to me the promise of a significant, Spring price rise is now over and by significant, I mean over $19-$20 silver.

We may indeed be in the doldrums to lower now with an occasional price rise to take eyes off the obvious setup of physical holders, institutions, and countries with physical metal and the intent to entice them out of their metal believing they can make far better profits in paper or real estate somewhere.

Don’t be fooled, the time to buy physical metal, PHYS, is now at these ridiculously low prices.

A friend and avid SD reader who friended me on Facebook asked me the question about weighting postfolios and balance between gold and silver.  My answer is not going to change and it is and always has been to get out of all paper and into physical metal and my preference is silver over gold.

Reporting from the Wilderness of Southern Illinois, stay thirsty for physical metal my friends!


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