The Drubbing of Gold
Author: Jim Sinclair
The punch the markets took yesterday has participants in a mood akin to a person sitting on a razor blade, terrified to do anything.
I recommend for those that did not read all of yesterday's postings to revert to the item that concerned a near financial failure of the entire carry trade, not copper alone. A failure of such magnitude on the catangos (the difference in spread between cash and futures) due to the bull move might have threatened the financial structure of the historic London Metals Exchange. This would certainly require a central bank rescue.
The drubbing of gold took overnight in the US was the catalyst to send the entire commodity market into panic mode. This was an orchestrated hatchet job via the British Central Bank making a loan of gold to an entity that sold with abandon to create the result. That was the decision anyone in charge might have made.
The $682 magnet functioned yesterday. The dollar stinks and the commodity world is like a boxer that took an upper cut with a glass chin, wobbling in the corner and attempting to get its focus back.
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