- Gold Trader: “This Is What Has To Happen—To Generate The Conditions Necessary For A Bubble Phase”!
by Tekoa Da Silva, http://bullmarketthinking.com/
I had the chance to reconnect with technical gold trader Gary Savage, publisher of the Smart Money Tracker daily gold market commentary and trading service, which has outperformed most of the world’s hedge funds in 2011 and 2012.
It was a powerful conversation as Gary indicated that, “I think we finally got our bottom in gold”, after much exacerbation by government and hedge fund smashing, with funds intentionally widening and profiting from the Asian gold premium spread. That manipulation “finally appears to be breaking,” Gary also noted, which should trigger an aggressive launch into the “bubble phase” of gold’s bull market.
Speaking to the early-morning gold price smashes over the last two weeks, Gary said, “It had gotten to the point where the bears felt they had a freebie trade, and they just hit it every overnight and pre-market in the morning…then [they’d] wake up and book their profits—over, and over, and over again. But I think the bulls ambushed the bears last Friday…especially in the miners. It was the heaviest up volume day in history.”
Commenting on how hedge funds have been booking arbitrage profits through those smashes, Gary explained that, “The harder they smashed gold, the more demand rose in Asia, and so you get big premiums in Asia, and these funds can buy physical at an artificially low price, and ship it over to Asia and make the spread. And the spread just get’s bigger and bigger as they smash the price lower and lower. So I think that was the biggest reason for this extended multi-month decline…but I think it’s done. I think Friday was the end.”
When asked how strongly gold might snap back to the upside, Gary said, “The further you stretch something away from the mean—and especially if it’s an artificial [move]—it tends to move [back] very violently towards the mean. If it’s a manipulated market…once the market breaks that manipulation…it’ll usually [return] well past the mean…making the move higher, move aggressive, it’ll come earlier than it would have naturally—and it’ll go [much] farther to the upside.”