Steve Quayle News Alerts

July 10, 2003

When a man spends his own money to buy something for himself, he is very careful about how much he spends and how he spends it. When a man spends his own money to buy something for someone else, he is still very careful about how much he spends, but somewhat less what he spends it on. When a man spends someone else's money to buy something for himself, he is very careful about what he buys, but doesn't care at all how much he spends. And when a man spends someone else's money on someone else, he doesn't care how much he spends or what he spends it on. And that's government for you." --Economist and Nobel Laureate Milton Friedman

It was a choppy session for gold, trading as low as $341.90 and as high as $345.60. This is what I meant about gold needing to do some "work."

John Henry is one of the legendary commodity traders. He has done so well over the years he now owns a professional baseball team. His firm sold 5,000 to 6,000 gold contracts around 5:30 EDT in London this morning. Somebody bought a huge amount of silver at the same time. Perhaps Henry’s outfit was dumping a long gold/short silver spread trade.

My sources tell me Henry puts on gold and silver trades in New York and often exits in London, where he feels he can unload positions in a more discreet manner.
As well as Henry has done, The Gold Cartel has cleaned his clock in gold over the years. Technical trading acument doesn't work in rigged markets.

To get the bull in gear, gold must take out a modest downtrend line around $350. When it takes out the top of the megaphone formation around $357, it should fly to $370.

Gold
http://futures.tradingcharts.com/chart/GD/83

Silver ran up to key resistance at $4.87 before retreating late in the day. The cabal couldn’t let both gold and silver go up in the same day.

All in all, the set-up for gold to move much higher could not be much better. The US stock market looks very toppy, silver is finally on the move, oil is $31 per barrel, the dollar rally is probably over, bonds are not responding to the stock dip, the news from Iraq is not good and the US economic news is lousy, which means the Fed has to keep its pedal to the medal.

The John Brimelow Report

http://www.lemetropolecafe.com/