Gold and Silver are Poised to Sell Off Monday (Post No Fly Attack)

The attack on Libyan air defenses took place on Saturday when the markets were closed. We should open firm tonight (Sun, 20 Mch 2011) but we are poised for a big sell off tomorrow (Mon, 21 Mch 2011). The news will make the sheeple want to buy gold and not sell it while the pros and tptb sells it to them to continue the correction already underway. Why would I go against the conventional wisdom of war being good for gold? First, we have already stalled at technical resistance areas and creeped back up Friday in anticiapation of this attack (given the green light late last Thursday), Second, a confluence of fibonacci year dates that coincide with past military attacks and/or temporary tops. Eight (fibonacci #) years ago we have the invasion of Iraq on the same date and the high for March already occured in the first week and we did not rally after the attack. Third, three (fibonacci #) years ago was the Bear Stearns high at approx 1034 gold and 21.35 silver from which the market corrected violently for months. London Gold fix prices from 2003 and 2008 compared to 2011 are below (go to kitco,com to see silver during those time frames):
> kitco > charts > historical gold > result
The kitco charts would not post so please go there for both gold and silver.

reply to post by CosmicCitizen


So you're saying that PM holders should sell now? I mean even if the price goes down I still see a trend of higher prices in the private sector.

I would only question your reasoning with all the other factors that are increasing the value of gold, i.e, Yen, dollar weakening, dollar world reserve, bonds, rating, etc?

I don't follow this closely but it would seem this may be minor in the big picture. What do you think about those factors?

Gold was 200 dollars an ounce in 2001

There is over a billion pounds of undocumented gold in the world

I'll guess you are right for next week. THen the week after, it will climb to new highs again. Then the week after that, it will drop slightly, Then climb again with new worries of oil shortages, debts, dollars, corruption, wars. A piece of paper is no match for metal.

reply to post by SceneIt

I was about to post this caveat and then read the last two posts first. The caveat is what happens to the US Dollar. This is especially important at this time as the dollar made a new recent low on Friday (albeit ahead of the attack on the Libyan air defenses) and is in a precarious position....just a good down day from the 2008 lows. If the dollar reverses up tomorrow then it will put a head wind in front of further gold advances on the "news" and it might be a case of "buy the rumor and sell the fact." These 3 and 8 year cycle dates are important (especially in light of the bullish news 3 years ago and the similarity of the news during the Iraq invasion). Check out the historical charts for the months of March for 2003, 2008 and 2011 (which I could not upload for some reason). I am not suggesting a LT TOP in the PMs but it is poised for a st top worthy of profit taking as the big shorts have covered at least half of their position and now are in a position to try to drive it down again. Other commodities have carved out top patterns as well over the last 6 weeks and the commodity markets (including PMs) seems tied to the stock market like runners with burlap bags in a 3 legged race. The stock market looks toppy, too. I would not be surprised to see gold retest the 1350 area and silver 31+. Caveat Trader.

Dont forget this weekend is also the Supermoon (Full Moon + Perigee) and the closest that we have been to the moon since 1993 (the year that Silver bottomed at $3.515). Also today is the Vernal Equinox. Markets like to make extremes during astrological periods when people are more susceptible to emotional (rash) decisions.

reply to post by ADUB77

Gold basically made a double bottom in the 255-60 area in 1999 and 2001 (silver in 1993) approximately $60 above where it started trading again in the mid 1970s when American citizens could own it legally again. It dropped to $103+ after that before starting up on the bull market that went to $850 before dropping back to the mid 200s. A similar move takes us to over $2100 which is where the 1980 high would be readjusted for inflation. But dont forget that move was ephemeral.....it was a spike up of several hundred dollars and came back down just as fast (the London Daily Fix dropped $100 overnight from the high day even so it was hard to sell it at the high). Taking out the spike (during double digit inflation and Russia invading Afganistan) we are about where we should be....adjusted for inflation. Silver had the spike to $50 because of the Hunt Bros trapping members of the Comex short and trying to corner the market without that anomaly we never would have gone past $25 probably. In fact I talked to a dealer who makes the tightest market (bid/ask) in the area and he said that he is paying more for 90% silver now (ie record) than he was in 1980 (since the refiners were backed up and dealers did not want to even pay this much when the price was $50). 1980 was a surprise and now everyone knows about the price action then and are long expecting a repeat. Long term we will go much higher (to the point where it is economical to recycle silver from electronics rather than dispose of them) but nothing goes in a straight line. In fact a correction would be healthy so the market doesnt "shoot it's wad" like 1980 or tempt the Comex to change the rules again (ie, cash settlement like stock index futures instead of delivery).

In the Sun pm session (in response to the Libyan news): the Gold ran up approx $7-9 from the Fri electronic close in the first 15-30" and Silver rallied + .40-.50 from the elec close during the same time frame. Lots of time to digest it after the foreign markets open and hold it up til the pit opening in NY tomorrow before they hammer it. They might not wait that long tho as this is a 24 hr market. Other commodities are called mixed and the US dollar is up .08%.

I cant get any silver any where. yes there might be a small correction but i think the technical charts are worthless now when there is such short supply. Silver and Gold long b*****Z

reply to post by camaro68ss

Have you tried APMEX?
We have to open sharply higher tomorrow first....but we are virtually there. Watch 35.85-36.05 area in Silver and 1328-30 in Gold. Open higher in this area....hold up, try to sell off. run back up and make a marginal new high and then put the hammer down. We will close lower tomorrow despite the higher opening. IF NOT, then more surprises await w respect to the Mid East and they were able to convert this cyclical time frame to a low that came early (but I doubt it - the market is ripe for a sell off on "bullish news"). There is silver out there but they are holding on to it,,,,,and a lot of it was acquired at sharply lowered levels. Those who bought late and with leverage are vulnerable at this time. Just hit my lower level in silver....this is where the big boys will "flip the card."

reply to post by ADUB77


How do you know there's a billion pounds if it's undocumented?

If no linkie

You stinky!

Gold will hold firm or continue to go higher if the USD keeps low or drops. This inverse relationship is strongest at times like these. So, no, gold will not drop in the near future. There are way too many investors making heaps off the rise of gold, silver etc and they are not ready to cash in as yet. There are some firms behind the rise of silver in particular and they will continue to speculate (or control these markets).

reply to post by camaro68ss

Kitco is having a special on silver eagles at 2.75 premium over spot. We are about to open the NY Mkts and they are predictably going to open near the overnight highs,,,give it 15 minutes after the pit opening to fill the shorts who want out then they should try to take it down.

Watching with interest to see if you are right.

Suspect though that this may cause people to dump the USD, Stocks and head for safe ground.

Time will tell

reply to post by JakiusFogg

The dollar is the linchpin here....it is at new lows for the move and will need to make a concomitant reversal with the metals selling off or they (G/S) wont go very far. Keep an eye on the dollar contract.

At the moment the USDX is down 0.01

And contract lease rates are rising.

Can't forsee a mess sell of just yet. like we had last week. If that hadn't happened I think we would have seen the USD fall. However upward momentum on uncertainty seems to be getting the better of things.

Question is. When is the next bond auction, and how much steam has the USD got left. Is it enough to make it to the next inflation jump. Which would in turn put more upward pressure on G/S especially if people start to sell of bonds on rising US inflation would it not?

reply to post by JakiusFogg

The dollar has not yet moved up but the metals are rolling over (after opening near their overnight run-up highs): Silver has already dropped ~.45 fr it's early high and Gold is down ~8.50 fr it's high. (ST support here so they will back and fill some before trying to close the gap at Friday's close).

The Dollar just ralled 29 pts....a significant move from the lows. Possible key reversal day if it keeps up!

Lol..sell-off in gold. Nope, not today. Gold is up 12 or 13 dollars, and I'd say we'll see 1480 to 1550 before we see any minor, healthy correction.

Fibonacci, Elliot, tea leaves what have you - they all do a great injustice when it comes to metals, and that is they completely ignore fundamentals and the big picture. If anyone was to follow Prechter and his gobbledegook scam of Elliot waves when it comes to gold, they'd be in the poor house now and would have lost the shirt off their back.He's been persistently wrong over the years, but still bleats on trying to up his subscription.

No offense OP, but ignoring the reasons why gold is where it's at, with all the QE and systemic dysfunction in the monetary system, won't do you any good.

Buy and hold the physical is the safest bet these days - not trying to time markets and waiting for minor, flash dips.

Gold can rise in tandem with the USD, rise in tandem with stocks, and fall against a rise in oil. Correlations are no guarantee either. Anyway, not having a go at you, just saying fundamentals beats charts in my opinion.