History says, don’t hope
On this side of the grave.
But then, once in a lifetime
The longed-for tidal wave
Of justice can rise up,
And hope and history rhyme.

Seamus Heaney

Gold and silver were hit by some of the usual sharp and short selling, but most of the gains were taken back by gold during the afternoon. For silver, not so much.

As noted intraday in the NAV chart, the gold/silver ratio is  historically high at 75.

It was heartening that gold held the 1080 level despite the attempt to push the metals lower.

There were no bullion deliveries yesterday, and nothing of note occurred in the warehouses of The Bucket Shop.

Note that the USD DX index has fallen for two straight days.

There is some correlation between gold in dollars, and the Swiss franc and Euro in dollars as well. I show that in the first chart below.

This does not always happen, but sometimes it does. And I describe this as ‘gold trading as a currency.’

This in itself is not a problem per se. But it does ignore the hard reality that while the central banks may own a printing press, and are most assuredly not afraid to use it, they do not own a gold bullion machine over which they have the kind of discretion which they enjoy with fiat money. 

And so we end up with a marketplace choked with leverage and backed by multiply hypothecated, papier-mâchébullion.

Despite a good show and talk of ‘tightening’ and pricier risk, it looks like the Banks will be just engaged in the usual antics of the privileged, offshoring in a tag team  currency cage match of the major western currencies and their descent to the bottom of real values.

The reckless short selling, speculation, and derivatives pyramid created by the big trading desks that they encourage may come back to bite them, abyss-wise.

Let’s see how that works out for their financial combine. Especially in light of increasing leverage in the face of the massive movement of bullion from West to East. Record Gold Exports From the UK To China

Accountability. It’s not just for the little people, all the time. At some point of extreme hubris and irrational excess, a banquet of consequence will be served.

Feed your head.  And your soul.

Have a pleasant evening.