There was a interesting spike in physical gold activity last week on the LBMA.
It seems consistent with the 'tension on the tape' that I have been seeing. And a number of little indicators and some interesting things, like the generally 'well informed' Goldman taking delivery of gold at the Comex for their house account.
One outcome of this *might* be the realization of the cup and handle bottom formation on the gold chart, and a quick run to target around the 1250 to 1270 area. And depending on what else goes with it, that might just be for openers.
Or it might once again be ignored and derided and the price capped.
But it does seem that the gold flows from the West to the markets in China and India is intensifying at these prices.
One cause of this could be a divergence between the paper price of gold with leverage and the actual physical markets.
And those who do not think that there can be such a divergence has not been paying attention to what has been going on in any number of markets over the past few years. I am seeing increasing signs of 'fragility' in the precious metals market.
To the contrary, the excesses of speculation fueled by excessive paper money in the all the wrong hands and slack regulation permitting reckless pyramiding and manipulation is a good contender for the theme of the last two decades.
But like the proverbial search for the lost keys, we will find the end of this era of financial madness in the last crisis, the one that breaks the Banks.
The chart below was provided by Nick Laird at
goldchartsrus.com.
