The panic to drive down gold despite the dollar’s decline suggests that “connected” players understand the hints embedded in the Fed’s communiqué. The deflation argument often mention in various media forms is nothing more than headline explanation which real intention is to create as much panic or technical sell triggers as possible over a short period of time. Technical sell triggers, recognized by trading algorithms, create heavy churn in which the controlling shorts cover their positions. Welcome to today’s casino markets. When next week's COT data shows massive short covering by the "connected" players, it will reveal the illusion and illustrate the footprint of control. By that time, most players, disgusted with the decline, will have turned their back on gold and retrospective gold analysis. The fact is that these paper operations have and will continue to be employed as a delaying tactic until the secular bull has run its course. Best advice is to ignore, better yet, buy these operations.
The Fed minutes warned of "significant downside risks" and a possible slide into deflation, an admission that zero interest rates, $1.75 trillion of QE, and a fiscal deficit above 10pc of GDP have so far failed to lift the economy out of a structural slump.
"The Committee would need to consider whether further policy stimulus might become appropriate if the outlook were to worsen appreciably," it said. The economy might not regain its "longer-run path" until 2016.
Source:
telegraph.co.uk
0 comments:
Post a Comment