There is a big dichotomy going on in the gold market related to frenzy about potential invasion of Ukraine by Russia. Here are ten observations by Chief Investment Officer Nigam Arora of Kitco:
- Gold has moved up very strongly on frenzy being stirred by the media based on a comment by Polish official yesterday that Russia will invade Ukraine.
- Ask yourself this question, “How likely is it that Russia will share its plans ahead of time with an official of Poland knowing that Poland is now a member of Russia’s arch rival NATO?”
From our sources, we have not been able to determine any record that gives special credibility to this Polish official.- Russia is a big supplier of oil and gas to Europe. Why is oil falling if someone knows that Russia is going to invade Ukraine?
- Investors in Asia and Europe tend to be more knowledgeable about Russia than investors in North America.
No significant buying has been seen in Asia or Europe.
Almost all of the buying is coming from North America.- Our algorithms have detected massive short squeeze.
- Our algorithms have detected light selling by Smart Money every time gold spikes over $1309.
- It is important to understand about media that it needs sensational headlines; TV shows want ratings, websites want page views, and newspapers want subscribers.
- Polish foreign minister, Radoslaw Sikorski, did not make a definitive statement that Russia was going to invade Ukraine. Here is his exact statement: “There are several battalion groups there. There is a large concentration of military hardware there. These things are being done just to exert pressure. Or to enter.” There is nothing new in this statement.
- Junior miner ETF GDXJ, which has recently been a leading indicator of gold price movement is seeing heavy money outflows for the last hour. When money flow is negative and the price is rising, this is a negative divergence.
- Silver is seeing light money outflows.
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Chart courtesy of kitco.com