Gold and dollar by the numbers.

We are witnessing the divergence of the US Dollar from Gold. The announcement by Brazil that it will defend the real (i.e. intervening to reduce the value of the Real or increase the value of the US Dollar) coincides with an increase in the value of the US Dollar. No public response.

We are beginning to see definite tendencies with the Gold market. Manipulation is now obvious as well as substantial.

Taking the 200 DMA from May 09 to today yields a more or less straight line with a slope of $25/month. Lately the 200 DMA is rising a bit faster. Volatility, however, has risen quite a bit. This shows up in faster rises, which are then knocked down by obvious intervention. During July and August last year the gold price had risen $200/2 months. During November last year, gold price had risen $150/month and during December, gold price had risen $150. Each rise is followed by the dumping of significant amount of gold that brings back gold price to the moving average.

The dumping takes place within an hour. No attempt is made to cover up the dump or get the best price. The only objective is to knock down the price. It can be concluded that gold prices would rise 4-6 times faster, were it not for the periodic intervention. Each dump is multi ton and may be ending up in China.

This then is the source of the volatility. When the entity that does the dumping runs out of gold it can dump, expect gold prices to rise parabolically (actually exponentially, meaning much faster than now). Gold and silver miners are cheap and I expect them to break out of the wedge on the upside.