FTW Precious Metals Advisory
COMEX DROPS PRICE FLUCTUATION LIMITS FOR GOLD, SILVER
Precious Metals Still the Best Long Play
Wild Price Swings Should Not Deter, Alarm Investors
Michael C. Ruppert
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June 16th 2006, 1:43pm [PST] – In another quiet economic move of major importance, following on the heels of recent announcements by the SEC and the Federal Reserve, the New York Commodities Exchange (COMEX), effective June 5th, eliminated all price fluctuation limits for commodities. Previously, daily price fluctuations in gold prices had been limited to $75 and those for silver prices had been limited to $1.50.
This will open the doors for wild and probably pretty nasty daily variances in spot prices but the risks involved are only for those playing shorts in the gold market. FTW has never recommended any short plays for our subscribers. The reasons for this should be fairly obvious. We have established over the years that almost every major financial market is rigged, lacking in transparency, and subject to intense manipulation by major players. But these manipulations work only in the short term.
Gold fundamentals remain unchanged. There is still roughly five times more paper gold out there than there is gold out of the ground. And while the decades-long manipulation (suppression) of gold prices has been well documented, the last two years have shown that the anti-gold cartel is fast losing its ability to suppress gold prices over the long term.
Oil prices are going to continue to rise. Both the Chinese and Russian central banks have recently announced their intention to make large gold purchases. Demand for the real stuff is, and will remain, strong.
What this move does is open the door for a wild-west type of speculative market where gold “day-traders” will be able to arbitrage paper gold transaction through a very volatile global market. This is not a game for amateurs and small traders. Short-term gold prices will now be used in Catherine Austin Fitts’ Tapeworm Economy model to whack small time players and drive them out of very risky short positions. I’m certain that this will also facilitate large liquidity and cash-flow positions of central banks as economic conflict becomes more commonplace.
I tend to agree with some who have commented that, at least in part, this looks like a desperation move by those seeking to halt gold’s inevitable long-term breakout to, and probably past, the $1,000 mark. Perhaps the one question I get asked most frequently by subscribers is about daily or weekly swings in the gold price. I calmly say that if you get nervous over these fluctuations you shouldn’t buy gold at all. That’s even truer now because the range of daily price swings now possible is going to look terrifying.
That, in fact, may be one of the intents here. First time gold buyers, failing to understand that the long term trend of gold is upward, tend to get real hinky when they see large one-day drops. I don’t even pay attention to them. I bought my first gold when it was $320 an ounce. I made my last purchase at $520 and then, seeing gold leap into a rapid (unjustified by the fundamentals) upswing past $700, have just sat on the sidelines watching.
If I had the cash I would buy more gold now and just sit on it.
The other thing that might emerge from this now is that gold prices might become a weapon of war between nations and competing economic factions. People are not the only ones who get tempted and caught up in the allure of fast cash. Governments and major financial institution play shorts on gold frequently. So wild price fluctuations, engineered by various powers that be, might trigger large liquidity or currency crises when people get caught holding short positions at the wrong moments.
None of that should be of concern to us. Just hold on to your gold and sleep soundly.
We know where it’s going.
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