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The War In Gold & Oil

Today an outspoken hedge fund manager out of Hong Kong spoke with King World News about shocking developments in the war in both the gold and oil markets. William Kaye, who 25 years ago worked for Goldman Sachs in mergers and acquisitions, also discussed what is going to finally cause the collapse of the Western Gold Cartel which is led by the Bank for International Settlements and the U.S. Federal Reserve.

Kaye: “There is a huge defense of the $1,300 level in gold. That has become the big number which is being defended by the Cartel. Gold occasionally pierces $1,300 to the upside, but very briefly. Right in the low $1,300s zone there is a huge defense barrier which has been constructed, where naked shorts are piled on naked short orders.

What is changing fundamentally, which I think is far more important from a medium-to-longer term investment position, is the real world dynamic. This deal that was signed by Gazprom with China is a game-changer. Worldwide gold trading is absolutely enormous in size because of the hypothecation and the rehypothecation of gold, and the development of high-frequency trading and so forth.

So the volume of gold trading on a daily basis is huge. It’s been said that the only commodity that gold can hide in, because of the size of that trading volume, is oil. So let’s talk about gold and oil for a minute because over time gold and oil tend to march together.

Oil has been trending higher, even as gold has come under renewed technical pressure. The importance of agreements such as the historic one between Gazprom and China really can’t be understated. This unifies in a very important way commercial and strategical Russian and Chinese interests.

But this is a very important development for gold investors because the demise of the Petrodollar will clearly be correlated with the demise of the ability of the Cartel to protect the U.S. dollar as the world’s reserve currency, and to maintain the Cartel defense of the paper and electronically suppressed gold price.”

Source King World News

 

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