One of my favorite quips over the years has been, 'If gold is manipulated on the downside, what makes it go up?' Well, there are still fundamentals in the market, and I would say that they are more important than ever. Yes it is extremely easy for the Majors and the Centrals to take gold down, if it is by moving gold to a reserve from an asset, which increases the supply and lessons the demand, or outright shorting the trade. At the same time, there is a very finite amount of the metal, and it lessons everyday.
People are very able to call gold's progression. The reason is they take into account the fact that it is manipulated. We are ready for down days. We know the siren song.
The long run is what matters. Nit picking a range is fantastic, but the real value lies in the absolute. Day trading gold is one thing. Owning it is another.
Nickle and diming gold is fine and dandy if one feels like sweating through the day. The other alternative is to know the basic supply/demand fundamentals and preparing to allocate cash towards the asset at the bottom of the long range.
$1407 has been the support for weeks if not a month. If platinum's range is understood, and it is known that the two correlate (as well as silver) then one would know that we were not to break out of this range. This is why one must account for all three metals.
The dollar is a driver, but as the trends have shown, gold trades well on a weak Euro as well (the metric Euro vs dollar is simple, but it will do for now). The main driver is supply/demand. Banks through proxies of GLD, fractional reserve lending (all dollars are accounted for with gold reserves, even though the leverage is 100 to 1) and unaudited tungsten reserves, have created a false sense of supply. This is one reason gold is trading for $1000 instead of $10,000. So when the shoe fits, wear it.
Soon the fiat ponzi will crumble into tiny pieces. It will because it was based on promises, and those promises are slowly unraveling. There are too many charades now. There is too much pressure on fiat, and the debt is crushing all leverage. Real actions like earthquakes and hunger are ravishing the people of the world. The lie of fiat can not save people from real problems.
Yet the unraveling allows the opportunity to change horses. Finance has one last chance to remember what monie is. The definition is for all to see. Fiat does not fit. Gold does.
We tested support today. We may test it again tomorrow. Deflation and debt destruction is in full force now. Inflation is still falling from the sky. The two have promoted a 'steady inflation' thus far. Gold has 'steadily' benefited. How much longer this will continue is any one's guess.
There will be a change in the trend. It could be higher interest rates to battle the Fed's inflation. It could be QE 3 to battle real debt destruction; fundamentals such as earthquakes. Gold will rise with a rate hike, as this would show the dollar can not hold the world on its shoulders. QE 3 would also be bad for fiat, as it shows the system is still weak. Whatever way it goes, the best bet is a steady rise in gold. Of course, there could always be a catastrophe.
Ireland wants to give bond holders a haircut. Japan needs so much money it is sad. America is a financial train wreck of a collapsed housing market, unemployment, and many other ills. Anything that hits the fan will make a mess. Gold is a reliable shield from any given storm.