Sunday 30 December 2012 It is impossible not to read some source, informed or otherwise, touting the “fact” that the price of gold and silver will be [insert whatever amount you wish, here], “in the coming months”, or safer, “in the next year or two,” etc. Yet, the market does not echo those almost universally held sentiments. Why not? Because that is exactly what they are, sentiments. When it comes to sentiments or opinions, regardless of how close to source or how well reasoned, the market does not care. One of the better “resolutions” one can make going into 2013 and beyond it to follow the market’s lead, stop trying to lead it, waiting for it to catch up to your trading acumen. But what about the shortages in silver production v demand? What about the overly re-re-hypothecated gold leases from central banks that cannot possibly cover actual demands for gold? What about the possibility that all of Germany’s [and other countries?] gold is gone and so much of it is being transferred to the East? What about [insert whatever issue you wish discussed, here]? Yes, well what about it! That information is and has been known for quite some time, so it is already “priced into the market.” It does not matter how well-informed your source[s] is. It does not matter how accurate the figures are for available supply v demand. The market is all knowing, and it is ahead of you, and it is responding to forces about which you are not aware, hidden deals, as an example. It does not matter how much gold there is, or isn’t. It does not matter where the gold is, or isn’t, the market is telling you what you all you need to know. Everything finds its way into the market, and if you would just ignore all else and follow the ultimate known fact, that being the current price of anything, then you have the answer right in front of you. The problem is, too many cannot reconcile the current price of gold and silver relative to their expectations. [From the buy side.] John Keats would have made an excellent technical analyst, for he excelled at drawing out the paradoxical nature of things, leaving us with a few of his most famous lines that apply to the above: ‘Beauty is Truth, Truth Beauty’ – that is all Ye know of earth, and all ye need to know. From ‘Ode On A Grecian Urn’ This is how we see charts. Everything you need to know is contained within them because they are based on truth. What truth? The ultimate decisions to buy or sell made by the collective forces of the marketplace. Anything else that does not get translated directly in the market is simply an opinion, of no factual value because the market only recognizes actual transactions. That is the truth and the beauty of the markets. They provide you factual commitments, unadorned by uncommitted interpretive opinions. That is all ye need to know on earth. Learn to listen to what the market is saying, and not what others are saying about the market. This is not to say that markets cannot be manipulated and factors grossly distorted, for even if they are, those manipulation and distortions are what is reflected in current princes, like it or not. Most who speculate in the markets, to the extent they rely upon charts, look at daily or intra day time frames. Smart money, what we call the “controlling forces” of a market, use higher time frames, for they are not concerned with day-to-day activity. Their positions and influence necessitate that they move over a more extended period of time, and one can get a greater sense of their intent from the higher time frames. When we talk about collective forces of the marketplace, it includes the most well-informed insiders, central bankers, the largest dealers, with availability to information and research outsiders may never know or learn about, until after the fact, all the way down to investors, fundamentalists, speculators, even the ephemeral day-traders. What they all have in common is that they are the market, once they make a decision to execute a buy/sell that influences and determines the price at any given point in time. Those executed decisions, regardless of how well or ill-informed, become market facts that comprise fluctuations, and they show up as the high, low, and close on a chart for any chosen time frame. Despite the relentless calls for gold and silver “taking off,” which they have not, of late, the elephants in the room, governments, central bankers and major brokers, plus exchanges, have been vastly under-rated in their ability to keep the prices of gold and silver suppressed as much as they have. They are not about to throw in the towel and give up their Wizard of Oz controls. Ultimately, they are doomed to fail, but when does “ultimately” kick in, and to what degree of damage before it does, remains unknown? One thing you should know about the opposition, in whatever form it is in, ultimately: It will not stop. It will not quit. It will destroy everything that gets into its way in order to suit its needs. The charts have been saying as much. The annual and quarterly charts had to be scanned because most services do not provide any beyond the monthly time frame. The comments on the charts may be hard to read, so we will put them in italics to make it easier. If gold and silver are going to go to such high price levels, why are charts saying the opposite? This end of year’s gold closing, actually Monday, is about mid-range the bar, a draw between the forces of supply and demand, but the range was the smallest in several years. Neither buyers nor sellers were able to extend the range further in either direction. Chart comments: This year’s close is higher, but the entire range is within last year’s. The bar is one of the smallest annual ranges in five years, and the close is just under the half-bar area. The conclusion would be neutral to just a touch negative. The quarterly chart may reveal more. We cannot get some of the charts smaller. For the entire article and charts, visit our site at http://bit.ly/VoYgyy