Technical analysis of a manipulated market like gold has been tedious nonsense for years, but these days, with virtually infinite paper dropped on the gold futures market at illiquid times to drive the price down even as the physical market remains strong, technical analysis has become insulting.
The only analysis worth anything anymore is the identification of the source of all the paper.
The suspects are obvious -- Western central banks. Even a little-known fund manager who managed to get on CNBC yesterday perceived it:
But while central bank intervention now has driven the gold price down below the cost of production, the nominal spokesmen for gold investors and the gold mining industry have nothing to say, or nothing relevant.
Back on April 19, a week after the big gold smash, the World Gold Council could do no better than grumble about "speculative traders":
The gold council wasn't heard from again until this week, when it offered a new formula for calculating the costs of gold mining, the better to publicize the insolvency of the industry the council purports to represent:
This week the gold council also announced appointment of a managing director for worldwide investment, Kevin Feldman, lately marketing director for BlackRock's exchange-traded funds, the masters of "now you see it, now you don't" investing:
Feldman said: "I look forward to developing new initiatives to expand access to gold investment through innovative products and partnerships while extending the organization’s leadership in helping investors to understand the benefits of gold to their portfolio strategies.”
"Innovative products"? Please, not more of those! Part of gold's virtue as money is precisely that it is not "innovative." Gold is just a lump of metal. While it can be fashioned into coins, bars, jewelry, artwork, and special industrial components, to function as money gold requires no innovation at all. Indeed, it requires only possession safely distant from those who would "innovate" it away into mere hypotheticals.
If the objective of the World Gold Council is only to support the fractional-reserve gold banking system and thereby to help inflate the hypothetical supply of gold to infinity, thereby robbing gold of its other virtues as money -- its expense of production and its finiteness -- the council is the enemy of the gold mining industry, gold investors, and everything gold as independent money stands for, like liberty, limited government, and the brotherhood of man.
If the council is just an agent of central banking in disguise, it cannot be expected to behave any differently. But what about gold advocates who are not turning gold into paper and electrons? So many of them are just pushing TA and economic theory while daily reality passes them by.
At King World News today, mining entrepreneur Pierre Lassonde prattles about seasonal trading patterns and supportive fundamentals:
Even Ronni Stoferle of Incrementum in Lichtenstein and Erste Group in Vienna can't do much better today than remind everybody that negative real interest rates are supposed to be good for gold:
But of course real rates have remained negative throughout gold's big recent declines, and central banks are intimately familiar with gold's relationship with interest rates. That's what future U.S. Treasury Secretary Lawrence Summers' 1985 academic study, "Gibson's Paradox and the Gold Standard," was all about:
To get control of currencies, bond prices, and interest rates, central banks use their powers of infinite money creation and almost infinite secrecy to laugh at and nullify technical analysis, fundamentals, and anything else that gets in the way of their great objective, the defeat of markets everywhere:
After all, as Stoferle, who has acknowledged gold market manipulation, notes in his new report, "Non-standard monetary policy measures seem to have become standard procedure."
The World Gold Council, Lassonde, and a dozen other fantastically rich mining entrepreneurs and gold fund managers have been and remain utterly useless to the gold cause. With a mere million dollars to pay for lawyers and a little freedom-of-information and mandamus litigation, the golden grandees could tear the threadbare cloak off the Western central bank gold price suppression scheme and expose it to the world. While gold mining executives would still probably be too dense or fearful to understand it, many fund managers, governments, and ordinary investors around the world might, and might act accordingly.
Two years ago GATA had substantial success with its first freedom-of-information lawsuit against the Federal Reserve --
-- and we're ready to bring expanded lawsuits against the Fed, Treasury Department, and State Department to relieve them of the rest of their gold market-rigging secrets:
But if the gold mining industry, gold investors, and adherents of what gold stands for have no fight in them, it will be all GATA can do to keep the gold flag flying.