Gold stock sentiment indicator.
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About a week ago there was an inclined rise in the gold price you could put the ruler through for a period of about 8 hours.
Friday night was the second time I have seen a flat line gold price. Silver doing the same on occasion.
My background in automation is telling me this is algorithm testing/operation for managing the price of gold.
As far as I am aware, the only way to move the spot price is to sell gold into the spot market.
If the buying rate/pressure is higher than the selling rate then the price goes up and vice versa.
Feedback loops allow the algorithm to regulate the price by adjusting the selling rate accordingly to deliver the resulting price.
I expect to see a similar rate in decline in the price of gold over an extended period in the near future.
By understanding the pressure (how much gold you pour into the market to regulate price) allows you to make some serious bets.
It provides a trove of information that can be used to best advantage.
Clearly the pressure is for the price to continue rising – the market closed in backwardation – spot higher than futures.
If you were the market maker, knowing at what rate the price wants to rise at gives you a huge financial advantage.
I use a similar algorithm for determining the target price for a stock on the breakout.
Imagine trying to manage the price but have limited resources at your disposal. You could run out of gold to dump if misjudged.
One option is to dump very large quantities in a short period. This will definitely move the price down. Could do some serious confidence damage as well (if that is your goal).
There have been cascade sales of gold into spot – these are fairly obvious. The rate at which it rebounds is also a measure of buying pressure.
I suspect they have lost control in trying to maintain gold at relatively low prices.
I also believe they are willing to sacrifice only limited amounts of gold for price regulation. Once it goes into this market and someone else buys it, it is gone.
Read a few articles about DOJ directing the racketeers to divest themselves of their bloated holdings in PMs.
The fed would not be happy about this as rising PM prices are a clear sign of falling confidence in the fiat system they maintain.
On the purchasing side (EFP) JPM have been breaking the trading laws for some time.
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Then there is the almighty short squeeze. Is it underway? Appears to be the case for silver.
This market is going to be fascinating to watch over the next few weeks as I do not think it finished yet.
Unless the market makers can convince everyone else there is serious resistance at the current prices then they are going to continue on and up. Hence the flat line.
A couple of interesting articles on silver and the current price moves. Add a dash of conspiracy theory.
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4 Banks Lose$248.8 Million For Each Dollar Silver Rises
https://www.youtube.com/watch?v=3f4wTFn3fNs
https://morganapreciousmetals.com/2020/06/29/the-final-chapter/
https://www.youtube.com/watch?v=Ny2ba_zBqPs
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At the current POG there are plenty of traders who probably think the run is over.
Gold stocks were sold off – possibly for profit taking. Stocks are also being sold off if the bourse falls.
Leading indicators are back around 45% and the sentiment indicator has dipped a little.
It is funny but I do not believe stock prices yet reflect the current POG.
There could be an air of disbelief around the PM sector ATM.
Gold bugs have copped it in the neck too many time and may be wary.
Then there is the implied threat they can do whatever they like with PM prices.
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