One Dozen More Days of Financial Infamy
Harry J. Clawar Ph.D.
Gold is not moving upward significantly and I'm not surprised. Why? In the past two plus years I have introduced several concepts concerning the price of gold:

  1. A way in which to examine the negative impact of New York related trading by comparing overseas trading changes (London am Fix - previous NY close), to New York trading changes (New York close - the London am Fix) -


    2. www.gold-eagle.com/editorials_00/clawar031300.html

  2. The manipulation of gold prices by New York banking / FED / U.S. Treasury related interests, despite increasing evidence of such manipulation, would not be reported as a major story by the mainstream TV or Newspaper outlets - Several financial writers have since picked up the POG price manipulation cudgel, but no major news stories that have a significant news half-life have appeared.


    3. www.gold-eagle.com/editorials_00/clawar070900.html

  3. Technical Analysis that predicted large POG upside breakouts, that would not be reversed, would fail - We have not, in the last 26 months, had any significant (e.g., $20-25+) intra day explosions of the POG, despite passing several price levels that were supposed to be the trigger for such advances.


    4. www.gold-eagle.com/editorials_00/clawar091500.html

  4. Cumulative negative financial news would not provide the impetus for large, irreversible POG upside breakouts- What can anyone say about this one? The stock markets continue to sell at historic multiples despite the sinking of consumer confidence, increasing mortgage defaults, pyramiding consumer debt, mounting job losses, major companies owe billions to their pension funds, several hundred public companies have more debt than assets, etc. Shouldn't this have moved the SM multiples to more appropriate historical levels?


    5. www.gold-eagle.com/editorials_00/clawar050400.html

  5. Only a cataclysmic event that panicked much of the worlds population would have the needed tsunami-like effect to overcome the NY based manipulation - This is what Jim Puplava has called a 10-sigma event. Remember that a 10-sigma event is so rare that its actual value does not appear in most normal curve probability tables.


    6. www.gold-eagle.com/editorials_00/clawar103000.html

Psy-Ops on the World's gold investors -

The desire to own gold is not evenly distributed among societies around the world at all times. If it was evenly distributed the trend for increasing or decreasing prices would tend to be approximately the same. In fact, every single country does not experience the same demand pressure at the same time. Unique financial conditions can cause increased or decreased demand for a period of time. Over a longer period of time the psychology of buying or selling should pull most countries' trading in the direction of worldwide trade. However, we have seen how over the last two plus years NY trading has consistently gone against the worldwide trend toward increasing prices. Many analysts have concluded that over a long period of time, much longer than my 2 plus year's worth of data, it has been the function, if not the goal, for the NY markets to cap the price of gold.

It should be obvious that continual heavy selling into a rising market will eventually dampen if not turn the upward trend. One of my previous articles

www.gold-eagle.com/editorials_01/clawar020201.html

demonstrated how over a year's trading NY has this effect on overseas trading. The last 10 days, although a small sample of trading, show in stark relief the extreme "determination" of the NY markets to dampen the price of gold. It is difficult to find a better example of one market segment trying to dominate all of the other market trading segments.

In 12 days of trading NY has a cumulative loss of over $33 per ounce while overseas trading has fought back with a cumulative net gain of over $11 per ounce. The NY trading shows a huge $2.76 average loss per day from the London am fix to the NY close. This selling is more than enough to force the price of gold down significantly, even in the face of almost a dollar a day per ounce gain overseas. In the absence of that cataclysmic event that I deem necessary to move this market up rapidly, will the continued suffocating of the POG advances by NY quell the overseas desire for gold even more?


Harry J. Clawar Ph.D.
Hjc@angelfire.com

March 26, 2003