Archive for the ‘Chinese language’ Tag

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The commercials [JPM and possibly HSBC]
who are in the process of covering their shorts

have tried three times in May
to  break the Dec 29, 2011 gold low
and cover their shorts
by buying the sell stops below.

Anyone who wants gold around that low level
probably could not buy the stops below the low
cause JPM probably put their orders in for those stops
when they started to drive the market down.
And, as I understand it
the High Frequency Traders [JPM]
pay off the exchange
for the privlage of front running other orders.
So, other purchasers must place their orders
above the Dec low.

If the Chinese [or any sovereign nation]
wants to buy gold,
as JPM sells to drive the price down
they can grab that gold for sale
at no cost to them,
because they can buy gold
the same way they buy bonds.
When an enterprise does business in dollars
and wants to exchange those dollars for Yuan,
the government takes the dollars
and prints the Yuan for payment.
They then use the dollars received to buy bonds…
or gold.

Since the gold is paid for in printed money
and is free to the government
[tho not to the taxpayers]
their purchasing power is unlimited.
They can hold a basket above the low,
The huge buying volume
on June 1st
appears to be capitulation by JPM
and loading of longs
for the next move up.

There is reason to believe
the gold price will be at $1950
before it will fall below $1523.