Markets Closed, Gold Drifts Sideways
With Halloween falling on a Wednesday this year this may be another opportunity for some kind of dislocation in the Gold market as the November contract expires on that day. I say this because of what happened the last time the month ended on a Wednesday, the Leap Day massacre that dropped Gold by more than $100 in a couple of hours.
One gets the feeling that something is going to let loose in these markets soon. The signs are all there and the closer we get to the U.S. presidential election, the more likely something dramatic may occur. Since the QEIII announcement nothing has gone to plan as the combination of U.S. electoral shenanigans have been liberally mixed with conflicting headlines and poor earnings to create another round of genuine fear in the markets as the U.S. Dollar continues to grind higher along with bonds while gold and commodities are ground down during the a period of normally strong seasonality.
The only rational conclusion is that the markets are being held in place artificially until a major event horizon is past, be it the election, Spain formally requesting (or being forced to accept) a bailout, an attack on Iran by Israel or some other unforeseen black swan.
At this point gold being pushed back towards $1700 per ounce is simply another opportunity for foreign central banks and their hedge fund proxies to build an even stronger position with which to use in an end-game tactic to bust the paper market by standing for physical delivery.