What on earth’s going on in the gold market? – MineWeb 12-18-12

Salient to Investors:

Lawrence Williams writes:

  • Virtually everything happening in the global economy suggests gold should be rising yet its stuck in a trading range of $1680 – $1750.
  • A strong similarity exists with setback in late 2008 to a similar pullback back in 2006. 
  • The only way the gold price could burst downwards is if all the central banks decided to de-monetize gold and sell all their holdings – it is not in their interest to do so given gold constitutes such a huge part of the foreign exchange holdings of a number of nations.
  • The ever rising cost of mining gold mean that the price downside is pretty limited – around $1,100+ an ounce meaning many producers are only marginally profitable at current price levels.
  • Chris Martenson believes some entity has been selling thousands of gold contracts into the thinly traded overnight markets to push the price down. This unparalleled selling has only managed to knock the price back a few percent.  One suspect is China.
  • Japan planning its own version of QE to infinity to inflate the economy after years of stagnation and deflation, could be gold positive.
  • All the signs suggest a continuing rise in the gold price as long as the U.S. market shenanigans are ended. 

Read the full article at http://www.mineweb.com/mineweb/content/en/mineweb-gold-analysis?oid=167297&sn=Detail.

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