GOLDBUGS AMEX Goldbugs Index (GOLD)

[peel+green]

Two things come to my mind this a.m.

As already commented upon, the barbarous relic is so barbarous to the USA that they will not allow Iran to accept gold for its oil. No clearer sign could present itself that the USA wants to take every step possible to reduce the attractiveness of gold as money in comparison to its lavatory paper dollar.

Secondly, the positive strengthening of GOFOs and the increasing willingness of the BIS to dump shorts in gold in the paper market suggest that the west is stepping up, and will continue to step up, its efforts to destroy gold as a trading medium and a currency.

As the US National debt gets bigger and bigger and China increases its Yuan currency swap arrangements there will be no lengths to which the USA will not go to preserve its now-creaking dollar supremacy as the world reserve currency.

In my opinion they will seek to eliminate all confidence in gold and furthermore, as the likelihood is that Yellen will be forced to increase the amount of QE rather than taper it, the frequency and size of attacks on gold will intensify.

Like most people I cannot put a base level on gold but I would not be surprised at $800 per oz when things get very angry and volatile in the currency markets. The price of gold will, I think, be hit more and more even in extremis, as the USA and the USD slide under the waves.

We can expect no help from China. This price smashing is an answer to their financial prayers and they are unlikely to upset the apple cart buy buying in huge volumes to raise the price against themselves.