Last night while the Yen was breaking down I found myself laughing at the stubborn refusal for the futures market to allow gold to print a 14 handle for hours, even though the Yen carry trade was breaking down.  Finally this morning the bulls could be held back no longer but only to pop as high as $1418, not anything technically significant, before being systematically crushed back into the box below $1415.

It’s another day of the golden yo-yo and with tomorrow being Friday the odds are good that again gold will be pushed below $1400 so the hedge funds lackeys can write more thoughtless column inches about how gold is a stupid investment, blah blah blah.

With even a meager 900,000 looking to stand for delivery in June, we are seeing the resumption of draw down on JP Morgan’s gold vaults such that for all of this week it is technically more than 70,000 ounces short.  But, somehow the exchanges continue and the delivery notices continue to go unfilled.

Meanwhile in China and in India gold is still being bought at a near record pace.  Even the Vietnamese are getting in on the action as the State Bank has auctioned off nearly 1 million ounces in the past month at significant premiums –~$150 — over spot.

The markets are becoming more volatile intra-day and we are seeing erratic beahvior in markets so big that they should never be this volatile.  Gold should be volatile as it is thinly traded.  The 30 year U.S. Treasury market should not be whipsawing intraday for 0.2% in yield twice a week.