The usual 'rinse & repeat' cycle... with July 18 COT (not that...

The usual 'rinse & repeat' cycle... with July 18 COT (not that it can be taken as gospel) the Spec's NET position was shown as Short, the Commercials as Long & adding, this then obviously induces the Shorts to cover, so, POG rises....a progressive squeeze in a reasonably controlled manner...

The reason simply being is to allow Spec Hedge & Fund Managers to justify their fees & commissions (which is their ONLY motivation to play anything) by showing a few pips of profit.... so, just a numbers game for these players who are not at all interested in any part of the physical asset which provides the support base for their on-going derivatives play.... were it not so, the Specs would just stop playing....

On the other hand, the Commercials (BIS, CB's & Bullion Banks) sole objective is to 'control' the price of PM's in general... what to look for next is when the Spec's NET position becomes Long, not that we'll ever be pre-warned as the COT data is considerably delayed... but the Commercials are always aware in real time, so as has been the norm, they'll once again dump tons of 'paper gold' onto a quiet & ill-liquid low volume market... the recent patterns seems to suggest this ought occur between 1260 - 1300 POG...

It also suggests that POG over 1300 is a place the Commercials don't really want to be, given the added risk for they also play the margins game.... but it's not been a problem because, hey, who stands for delivery?... However, COT Comex data? indicates that only a mere 22 tonnes is currently registered as eligible for delivery, down 53t from Aug '16 inventory of 75t... this suggests that there's been some asset milking going on the last 12 months. The game suggests that it's now the Commercial's turn to be Short & should they find a bunch of Longs are going to stand for delivery on their Contract expiry... Well.... 22 tonnes AU is not a lot should a consortium of Sovereign States choose to make a run, at say 6 or 8 times the available eligible...Comex would technically be in a Default scenario... but their small print does allow for a suspension in trading, whereby they can honor their obligations in a fiat payment... but at the PREVIOUS day's closing price!.... But a Default is a Default, should they then wish to continue with their 'paper' shenanigans, they'll have to replenish their underlying physical asset base quite considerably by standing in the set free open market with the rest of us 'greater unwashed'...

Who can they be? It's no secret that many Euro-Asian Sovereigns have been accumulating physical for quite some time, also that Sharia Law now allows Muslim's to invest in Gold (but only physical & jewelry, not speculative futures or derivatives), that the hub of this market, Dubai, has joined with SGE to implement this venture, & it's almost incidental that among these Sovereigns are the largest holders of USD Reserves.... How many more 'rinse & repeat' cycles left?... dunno... but be done by Xmas for mine...

USD nears it's 200 MA, which I liken to the starting gate of an Olympic Bob-sled comp.... breach this & history shows it's a run down ... the irony here is that the fastest to the bottom earns a GOLD Medal...

Dropped my dictionary & the word "parabolic" fell out which I pasted onto my whiteboard... I reckon it'll become a word many commentators will be using in conjunction with their coming narratives on the PM miners & explorers in the next few months....& you heard it here first...