June 27, 2017
- At about 4:00am yesterday, gold suffered a dramatic sell-off in just a few seconds. More than 15,000 contracts quickly changed hands on the COMEX.
- This caught most investors by surprise. That’s because they don’t follow the physical market meticulously.
- The supply and demand of physical gold is what drives price discovery in the paper market. The leverage involved on the COMEX, SGE (Shanghai), and the LBMA (London) allows the paper market to significantly magnify the action taking place in the physical market.
- The gold price trends are generally determined by the physical market, and magnified by the paper market. It’s that simple.
- Janet Yellen has stated, “I don’t think anybody understands gold.” I disagree. I’ll suggest that anybody who ignores the physical market will find that most of what happens in the paper market feels like an electric shock. It’s not a shock. It’s a magnification.
- To view the latest key physical gold market news, please click here now. When the major banks stop importing gold into India, even if it’s for just a few days (as it is in this case), a “price vacuum” can occur on the COMEX and/or the LBMA, and do so in just a few seconds.
- That’s what happened yesterday, and the good news is that gold importers may already be close to getting the clarity they seek on the GST tax.
- Please click here now. Double-click to enlarge. Gold has a “perky” feeling to it right now, even though the summer typically sees sideways to lower price action!
- I don’t see anything negative on this daily gold chart, and my 14,7,7 Stochastics oscillator is at a point where $50 - $100 rallies tend to begin.