Central banks stand ready to lease gold in increasing quantities should the price rise. – Alan Greenspan, 1998 in Congressional testimony on OTC derivatives
Gold has been in a steady uptrend since December 18th, bottoming at $1131 after a four and half month price correction. Firmly back over the 50 dma, the price momentum appears to be a threat to the ‘bullion’ banks who suppress the price of gold in the paper derivatives market on behalf of the western Central Banks and, ultimately, the BIS.
The banks must feel threatened by the recent activity in both physical and paper gold trading. This morning the price of gold was attacked in the Comex paper market after St. Louis Fed-head, James Bullard, delivered remarks about interest rate policy that should have propelled the price of gold higher: ‘We think the low-safe-real-rate regime is unlikely to change in the near term. This means the policy rate can also remain relatively low over the forecast horizon’ (link).
Instead, the Comex was bombed with paper:
This post was published at Investment Research Dynamics on February 9, 2017.