Will Gold's Tumble Continue? Here Is Citi's Answer

This morning's flash-crash dump of over $2 billion notional in gold futures broke numerous technical levels, but as the precious metal bounces back off support, the question is will the bounce continue? Citi answers...

 

Having tested up towards its 50-day moving average (green line), this morning's sudden and heavy volume flash-crash plunged the precious metal below its 100- and 200-day moving average (orange and red respectively below).

 

But as Citi notes, Gold is presently testing a strong area of support from $1,233-$1,237 where the 200 day and week moving averages converge with the 76.4% retracement of the May-June rally.

 

Citi concludes... we have confirmed triple weekly momentum divergence on Gold and as a reminder, this is one of our favorite indicators to suggest that a trend (downtrend in this case) is running out of steam.

Comments

bjax Mon, 06/26/2017 - 09:48 Permalink

These people should not be allowed to comment on gold, they are all part of the control system that is keeping gold low. Someone needed the price lower, and so they dump, like a dog shitting on the pavement, they avoid it, but others step straight in it.

swmnguy Bay of Pigs Mon, 06/26/2017 - 10:15 Permalink

Just about everything we know, or think we know, is useless in a rigged market.  The whole problem with the analytical doom-porn I love so much is that it uses standard "rules" of classical economics to explain things that are clearly not in accordance with standard "rules" of classical economics.Sure, all this debt is going to collapse the system.  Already has.  So they just printed up a bunch of money out of thin air and things kept going.  That couldn't happen, according to the "laws of economics."  Except, economics is a fancy term for a specific niche of human psychology.  It's not like natural science.  "Laws of economics" aren't "laws" like the law of gravity, or laws of thermodynamics etc.  Otherwise we could all just agree gravity wouldn't apply and nothing would ever fall down.So, while we can all tell an awful lot about our economy isn't working right, using TA or standard tendencies of economics to expain what's happening and why, and what we should expect, is nonsense.

In reply to by Bay of Pigs

dark fiber Mon, 06/26/2017 - 09:56 Permalink

I think that today's action was a bit too much and started to make many people ask many awkward questions thy shouldn't be asking.  So this City article could be just a damage control exercise more than anything else.  Then again we had worse smashes than this and nobody paid much attention.  So maybe something is changing.

GRDguy Mon, 06/26/2017 - 09:57 Permalink

Who cares what the sociopathic banksters heading Citi have to say?There mission is to profit from lyin' and stealin' from their muppets.They're just another agent for The Great Red Dragon.Keep on feeding them if you like what's happening to the world.

swass Madcow Mon, 06/26/2017 - 10:07 Permalink

"In a deflationary collapse, everything falls."Historically accurate."Soon enough, a crisp new $100 bill will buy all the land in California"A bit of an exaggeration, but cash is always king in deflation.  The credit implosion must cause deflationary collapse; the only question is whether the central banks and government decide afterward to ride to the rescue and try to hyper-inflate.  Remains to be seen.  My strategy is cash + precious metals, which is a way of hedging all situations and still being able to buy more assets in a deflationary collapse without worrying about the hyper-inflationary concern.

In reply to by Madcow

swmnguy swass Mon, 06/26/2017 - 10:19 Permalink

Agreed. I'm using the same strategy, with the added element of trying to have no debt at all.  All I have currently is the balance on my home mortgage, which I'm paying off as fast as I can.  It's become obvious to me that any and all contracts can and will be abrogated unilaterally if it serves the interests of The Banksters to do so in order to survive and progress on their goal to own absolutely everything.  When the next crisis hits, if a lot of consumer loans and mortgages in perfectly good standing were suddenly called in or collateral to be forfeited, I wouldn't be the least bit surprised, regardless of whether it was lawful or not by current laws and regulations.Seems to me the best way to skirt around these weasels is to not have any skin in their particular game.

In reply to by swass

swmnguy SubjectivObject Mon, 06/26/2017 - 11:32 Permalink

That makes sense too, and I've considered it.  I decided on the "pay it off fast while I can" approach to minimize the amount I pay categorized as interest and not applied to the principal.  I could have just gotten a 15-year, I suppose, but I'm a horseshit fortune teller.  I liked the option of a much-lower minimum payment in case things got bumpy, with the plan being to make large early payments to principal to minimize the interest, while I'm making a fair amount of income.Every time I've gotten clever with thieves I ended up sorry.

In reply to by SubjectivObject

FreeNewEnergy swmnguy Mon, 06/26/2017 - 10:44 Permalink

My strategy, cash + PMs + lead + tools + land + seeds + non-recourse CC debtWorking so far...I may have overindulged in the CC end, about 12K at present, but my net worth remans positive and my cash flow is also. Off-the-books work on occasion bringing in more FRNs which the IRS never sees. Long live freedom and the Great American Pasttime: screwing the tax man.

In reply to by swmnguy

swmnguy FreeNewEnergy Mon, 06/26/2017 - 11:29 Permalink

That's the other way to go on the debt side, for sure.  A way I've considered myself.I worry, "What if these clowns can keep the clownshow going a lot longer than I think?  Am I going to find myself in a scrape, and on the wrong side of these people?  People who can have the rules and laws changed to preserve the 'heads they win, tails I lose' environment?"And then I chicken out.

In reply to by FreeNewEnergy

Too-Big-to-Bail (not verified) Mon, 06/26/2017 - 09:58 Permalink

Until 3D printers can start printing Gold, it will continue to be a bad investment

swmnguy Too-Big-to-Bail (not verified) Mon, 06/26/2017 - 10:10 Permalink

I think you're confusing "Investment" with "Speculation."Gold has been a terrible speculative instrument, unless you bought around $625 (when I did) and sold at $1880 (when I did not).  I'm still perfectly happy doubling my "investment," but that's not why I bought it in the first place.  I bought strictly to diversify and have a little counterweight to the fact that everything else I have is denominated in FRN's.

In reply to by Too-Big-to-Bail (not verified)

shizzledizzle Mon, 06/26/2017 - 10:00 Permalink

What they meant by "unwinding" was using the funds from mature bonds to buy buy paper PMs high and sell them low. Liquidity gone, problem solved. Inflation?! Hit the flush lever boys!

45North1 Mon, 06/26/2017 - 10:00 Permalink

Funny how if a foreign nation wanted to tank the USD,  they would only have to stand for delivery.The most valuable thing in Fort Knox is it's secrets.

c2nnib2l Mon, 06/26/2017 - 10:05 Permalink

all I can say....I knew this shit will happen and with 50 leverage ! :D which is fucking crazy... I've set up SL at 1150 ! RISE MIGHT GOLD ! TP 1550 Elliot Wave looks legit at this point as this did not hit the last highest low.. every time they WHACK it it's highest than the last low :& so yeaaah Citi might be wright 

coast1 Mon, 06/26/2017 - 10:08 Permalink

seems weird to me that they keep dumping billions of dollars worth of paper gold, and it really doesnt seem to effect the price much...Do this to bitcoin and btcoin would cease to exist....ya think?

el buitre Mon, 06/26/2017 - 10:15 Permalink

Any real trader caught in a short squeeze would never dump their paper gold like this.  They would sell off a little bit every hour over a week.  Let it hide in the random flux.  This was a way to maximize their losses.  Unless they couldn't care less about losses.  Now who could that be?  An institution that can print its own funny money?

Ignorance is bliss Mon, 06/26/2017 - 10:16 Permalink

It's just noise. All of the historical gold manipulations fail because someone somewhere starts hoarding the good stuff. Then everyone starts doing the same. It's built into our DNA as a species. The fact that American citizens are so blind just goes to show you that our days as a hedgemon are coming to a close. The writing is on the wall for all to see except for the willfully blind and self medicated. I'm just greatful for the sun on my face, a hot chick on my lap, a cold one in my cup, and a pocket full of gold coins.

taipalag Mon, 06/26/2017 - 10:18 Permalink

What I don't get is why miners seem to be happy to get defrauded by the price manipulation. You'd think they would sue the hell out of the FED and CBs