Friday, August 22, 2014

Interest rate fears trample gold! Ha ha ha!


And today, Wall Street Fatty tweets this:

WSJ paywalled - interest rate fears trample gold.

Uh, no.

Gold is being trampled this week by the coming options expiry. It happened back in late May too. We'll see what happens after next week.

Gold might also be getting trampled by fears of a poor monsoon harvest in India. That's the country that buys a big chunk of world gold production, and we're getting bad news about the coming harvest - though Indians do tend to whine and worry about the monsoon quite a lot.

Also, gold might look bad due to worries that the corrupt Chinese kleptocrat class won't be buying as much gold now that the anti-corruption campaign has everyone looking over their shoulders. Hey, maybe that's pure speculation, but I've heard Toronto condo prices are also dropping right now. It'd be interesting to talk to someone at the downtown Scotia Macotta and ask if they've seen fewer Chinese people at the bullion desk recently.

If you want to make the argument that US interest rates have anything whatsoever to do with gold supply and demand, or that supply and demand do nothing to determine the gold price, then I'd be very interested in hearing it.

But the fact is that fat white Americans don't buy gold. They certainly don't buy it based on interest rate movements.

And if the gold price had nothing to do with supply and demand, then the big ETF liquidation a couple years ago would never have made the gold price drop through $1500, right?

Anyway, if I wasn't a lazy-ass I'd go look through Tatyana Shumsky and Ira Iosebashvili's past articles on gold.

I mean, it seems there's always a flood of bearish gold news during the week before OpEx, and I darn well betcha it's the same few people in the press who file the articles. So, for example, we'll probably see an article before Monday on GS and Citi's bearish gold price targets. Gotta get everyone out by Tuesday, right?


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