No one who holds or trades the PMs should be surprised by what is occurring today. To summarize:
1) A billion Chinamen are the first to really feel the squeeze of HellyBenny's printing press. The cost-push inflation is already rearing it's ugly head there as dollar-denominated input costs are soaring. One billion people are hard enough to control when they're content. One billion hungry people are an entirely different matter.
2) The EU continues its death spiral which is leading to dollar strength. As noted in "A Quick Buck" earlier this week, a move through 79.60 on the USDX signaled a move to, perhaps, 81. Well you got it.
3) Blythe and The Flying Monkey Brigade have predictably seized upon these events to drive prices lower on this light volume, holiday Friday. Gold found buyers, however, right where I'd expect, at the 1350 level.
4) One other thing about the Chinese that you must understand. They are desperately trying to exchange their dollars for hard assets and precious metals. Anything they can do to temporarily drive prices lower, they will. Just whom do you think our buyer(s) of size are, anyway? They know that any move to raise rates and/or margin requirements will trip all the mindless, robot algos into sell mode, thereby lowering the prices of the items they wish to accumulate. The long-term trend in gold and silver is undeniably UP. The Chinese know this, too, and they hate to overpay so they will occasionally "manufacture" weakness to help their cause.
The charts below speak for themselves. Next week still promises to be a crazy, volatile and exciting week as $36B in freshly printed greenback flows into the Primary Dealers but let's worry about that then. For now, ignore the markets, kick back, have a few adult beverages and watch some football. That Alabama/Auburn should be a good one.
2:00 EST update: Gee, I wonder who started buying at 1350 and has, in the past three hours, managed to put $15 back into the price of gold? Hmmm, let's see. Who could it be???