I'll explain: In the Sherlock Holmes mystery "Silver Blaze," the world was introduced to the "curious incident of the dog in the night-time." The conversation between Holmes and a police inspector named Gregory goes like this ...
Gregory: "Is there any other point to which you would wish to draw my attention?"
Holmes: "To the curious incident of the dog in the night-time."
Gregory: "The dog did nothing in the night-time."
Holmes: "That was the curious incident."
Sherlock Holmes was referring to the fact that a watch dog didn't bark and wake the family, which is what the dog should have done. Why didn't the dog bark?
The larger question is: "What does it mean when something you expect to happen doesn't happen?" That's a question we are asking of gold today.
Why? Gold ISN'T selling off. And yet, as I warned Gold & Resource Trader subscribers last week about this upcoming week:
China’s on Holiday. We all know how Chinese buying supports the gold market. Well, the Chinese Lunar New Year holiday has China on holiday for the next week. There was a tremendous amount of gold buying in China leading up to the holiday; that’s now over. Worse for gold, with everyone on vacation, there is a vacuum of buying. If I was bearish on gold, I’d want to use the next two weeks to pummel the yellow metal as low as possible.
See, with China on vacation this week, gold should be going lower. It's not. That. Is. Weird.
As Tim Ioacono pointed out:
The absence of buyers in China in the week or so ahead (of the holiday week that starts this week) was also a factor in souring gold market sentiment as Reuters reported that gold premiums in China tumbled from as high as $20 per ounce just a few weeks ago to just $4 per ounce last week.See, speculators sold gold last week in anticipation of the Chinese going on vacation (and also because it was gold options expiration on Friday). The gold buying in China last year was THE main support for gold prices. As gold got cheaper, the Chinese bought a LOT more gold ...
Year-end statistics show mainland China had net imports of 1,158 tonnes of gold last year, more than double the year before.
So, since China is on vacation, why ISN'T gold tumbling today?
I'll have some thoughts on that later.