Gold price takedown a plot by the Fed and the bullion banks says veteran gold bug Jim SinclairPosted on 22 December 2012 with 3 comments from readers
The year-end slump in the gold price by around $100 in three weeks is a plot by the Fed and the bullion banks to disguise the true state of the US economy, argues veteran gold bug Jim Sinclair on his website this weekend. Sell now and you are being caught in their trap.
Mr. Sinclair has the gold price shooting to $3,500 and higher in the near future. His predictions have been very accurate for more than a decade now. However, even if he gets the long-term trend right, there is no accounting for the manipulation by the Fed and the bullion banks.
‘There is not one professional who does not know sales in extreme volume at a time of low activity internationally have but one purpose, and that is to reduce the price of gold,’ he explains. ‘You cannot fix the problems of the Western Economic system by breaking the telltale thermometer, which is the price of gold.’
He adds: ‘The idea that the patient (Western financial system) will recover because Dr. Strangelove [we assume he means Ben Bernake] of the Fed jumped up and down on the fever thermometer (the gold price) is the height of rank, blatant, foolishness and ignorance I thought the Fed leadership was not even capable of. They did this in the 1970s and it failed as miserably as this act of desperation will also.’
Mr. Sinclair points out that all this achieves is to drive gold into the hands of China where eager buyers will snap up this insurance against the coming devaluation of the US dollar. Many global central banks, particularly from the BRICS nations will do the same.
ArabianMoney would also note that we faced exactly the same crisis of confidence over gold and silver prices this time last year (click here). Could it not also be a bit of profit taking by hedge funds at the year-end? This year prices took off nicely in January after many predictions of the end of gold towards the end of 2011.
So often with gold it is a case of deja vu all over again. What we have not seen is the massive price spike that would indicate an end to this bull run. Then we would be looking at Mr. Sinclair’s $3,500 an ounce and everybody would be talking about gold going much higher.