first majestic silver

Gold Beatdown-Bullish?

August 12, 2021

I am on vacation this week…so I will keep this short position.

I thought it was important to address the bombing of the gold market in the past few days. I have received numerous calls from people who are concerned with the recent action. I believe even more so because the Basel 3 regulations were supposed to make the price of gold go up and instead it has been heading in the opposite direction.

Keep in mind that the USA and Europe are already under the new Basel 3 rules BUT England is not. It is here that all these games are being played- most likely not only by English banks but also US and Eurozone banks also- just trading in London where the rules are FAR more lenient. Despite the objections of those at the LBMA and others England is supposed to be subject to these same rules by January 2022. I believe that all of this action is an attempt by mostly all the major banks to get positioned for this massive change in the value of their balance sheet assets which greatly favor physical metals and discount Paper proxies largely.

Those who called me were, no doubt, surprised to hear that I thought what happened on Sunday night ($400 Billion of FICTIONAL gold was sold when very few buyers were around in the middle of Sunday night) was BULLISH.

How could that be- you may wonder. First of all, the ridiculous action that led to a hard downturn in the gold price was short-lived. When I looked on Sunday night gold was down around $100.00 from Friday morning’s open and I was interested to see what Monday morning looked like. Gold was down around $17.00 when I looked on Monday morning.

What this suggests to me- as I have written before is banks are blasting the price and that is allowing them to exit their short positions that they have been using to suppress the price. I believe these short positions are likely to be greatly reduced or liquidated because these “paper” assets have to have a corresponding physical asset held when the new rules are fully implemented. This does not mean it has to be the same asset like gold=gold but a hard asset (even cash) has to balance the position. That makes these paper positions FAR less attractive and may actually COST the banks to hold them. In addition, it allows the banks to buy the metals they are going to need shortly at a great discount. Let’s not forget that when shorts are closed the (most likely fictional gold also) must be bought. This is likely what led to the price spike after the initial action.

My thoughts remain the same. Basel 3 should be massively bullish for gold shortly. Short-term (next 4 months) could be volatile as the banks extricate themselves from massive short positions AND purchase metals at discount prices that they maneuver for themselves. Those that don’t understand this are likely to sell in fear and miss out on one of the greatest bull markets we may ever see in our lifetimes.

Central Banks added 330 TONS of gold from January to June 2021.

It appears they know what’s coming and are planning for it.

What is YOUR plan?

Be Prepared!

Any opinions are those of Mike Savage and not necessarily of those of RJFS or Raymond James. Expressions of opinion are as of this date and are subject to change without notice. The information in this report does not purport to be a complete description of securities, markets or developments referred to in this material. The information has been obtained from sources deemed to be reliable but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.

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