Why did the Bank of Settlements hit the gold price so hard last week? Viewed against the movements in the bond market since then it was obviously a last ditch attempt to prevent prevent precious metal prices taking off as the bond market tanks.
Gold and silver have bounced back sharply to almost recover the losses of that last slap down from the BIS. The mysterious Swiss-based bank of the central banks has been warning long enough that a collapse is coming in the bond markets. It thinks we are heading for another global financial crisis worse than 2008-9
Greek default
The imminent default of Greece has been pushing up yields on not only Greek debt but that of Spain, Italy and France as well and even German bund yields have almost tripled in a week from their astonishing lows of, yes last week when the BIS attacked gold perhaps for the last time.
There is a tipping point in all markets and this seems to be it for bonds and by extension gold and silver. Why would investors hold their money in a declining asset when they have such a convenient safe haven alternative that has always done very well in bond crises in past history?
It is a no-brainer unless you just got your fingers burnt by BIS market manipulation last week. But make no mistake the BIS can’t keep on doing this when the market turns. After all it could not stop gold going from $250 to $1,923 an ounce between 2000 and 2011.
Oil prices
Black gold or oil will also be in demand by speculators as a hard asset with a fixed supply and real demand. Those surprised by the bounce in oil prices will be surprised even more.
Pension and hedge funds with trillions tied up in US bonds are going to be the main losers, and the capital losses involved will result in impoverishment and ruin for many older investors in their retirement.
Still there is time to run out and buy gold and silver now before the price surge starts. Not so often do you have such an obvious chance to get out of the way of a steam roller but there will be no second chances.
