Howling at the moon for a change of trend for gold

11:27a ET Thursday, July 30, 2015

Dear Friend of GATA and Gold:

With his commentary today, "Gold and the Full Moon" --

http://321gold.com/editorials/moriarty/moriarty073015.html

-- 321Gold's Bob Moriarty notes that negative news and commentary about gold have exploded in the mainstream financial news media in recent weeks, and he construes this as such media explosions are often construed: as a contrary indicator, an indicator that a trend has run its course.

Moriarty writes: "If you have 100 investors in a room and you ask them where will gold be in six months and 100 percent of them say lower, gold can only go higher."

Certainly sentiment in the monetary metals sector is the worst it has ever been. It has been declining steadily for years and well could be worse in the days ahead, as mining companies cease production and even go out of business as the price of their product falls below the cost of production and they fail to inquire about the cause.

... Dispatch continues below ...

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This isn't to pick on Moriarty again; many other gold market observers have been making his point about sentiment as a contrary indicator. But your secretary/treasurer argues that sentiment long has been irrelevant to the monetary metals markets -- at least the sentiment of ordinary investors is irrelevant.

For the only sentiment that counts in the monetary metals markets is the sentiment of their biggest participants -- central banks and their agent bullion banks. Good luck getting them in a room, surveying them, and inducing them to give honest answers for publication or broadcast.

Of course it will never happen. Central banks run the world and even in nominal democracies they answer to no one.

So as a practical matter the most that can be done is to pick through government archives and other official records for the traces of central bank involvement and intentions with gold, as GATA has been doing for 16 years, ascertaining past policies and actions for indications of present and future policies and actions:

http://www.gata.org/node/14839

But rather than do such research or concede any legitimacy to the effort, Moriarty today goes on to assert a correlation between reverses in market direction and the appearance of the full moon, and he notes that a full moon is scheduled for tomorrow.

As the moon influences the ocean tides, it also may influence other things on Earth, including human moods and psychology. Certainly the moon has gotten pretty good notice over the years; it figures in thousands of songs, poems, photographs, and paintings. But if the moon has much to do with reversals in gold prices, it may be only because lunar cycle tables by agreement have been marked the same way at the Federal Reserve, Treasury Department, Bank for International Settlements, European Central Bank, Banque de France, People's Bank of China, and International Monetary Fund.

Of course there have been many full moons in recent years and they have done no good for gold. But Moriarty still could be on to something here, since the intervention of central banks in the gold market lately has been so obvious that they now just might look for cover even in the phases of the moon, confident that mainstream financial journalists and stock touts everywhere will happily seize any rationale for overlooking the central bank interventions that deprive their market analysis of any meaning.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

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