Down dropt the breeze, the sails dropt down,
‘Twas sad as sad could be;
And we did speak only to break
The silence of the sea!

All in a hot and copper sky,
The bloody Sun, at noon,
Right up above the mast did stand,
No bigger than the Moon.

Day after day, day after day,
We stuck, nor breath nor motion;
As idle as a painted ship
Upon a painted ocean.

Water, water, every where,
And all the boards did shrink;
Water, water, every where,
Nor any drop to drink.

The Rime of the Ancient Mariner
Samuel Taylor Coleridge

It’s sometimes called The Doldrums, after the region of equatorial Atlantic Ocean in which ships would becalm for long periods in the times when sails were the main power source and you didn’t even need to shoot an albatross to get caught up in one. That was in ye olden days; here in the 21st century we have the thrusting business world and the relatively short period of August, when markets calm and in our specific focus sector, the world of mining, will wait until US Labor Day before coming out with any new news.

Is that our fate next month? So far at least (and forgiving a dollar or two on Friday) gold has kept inside the IKN predicted Northern summer range of U$1,300 to U$1,350 per troy ounce, but for one thing we haven’t got close to the bottom of the range (U$1,315/oz was the worst if memory serves) and for another, the way last week panned out there’s every reason to cast doubt on that arm-wave call. And for yet another thing there’s the chart of GLD and XAU that shows how the market reacted once the FOMC announcement was out and it’s difficult to call that anything else but BS. You can take all the geopolitical events and wrap them up in a tight ball but they don’t come close to the real catalysts for gold price movements, such as a couple of carefully worded lines in a Fed release. Money talks, bullsh*t walks and money spoke loudly as from last Wednesday lunchtime.

Another reason to cast doubt on the Doldrums scenario is my interpretation (rose-tinted specs or otherwise) in what’s happening in to GLD physical inventories today (regular chart above). In last week’s intro piece “The metal is leading the miners”, part of the theory proposed for expecting the miners to catch up again (which happened right in cue I might add…toot-toot) was GLD inventories were showing that the most speculative money from the desk jocks had been largely blown off, leaving gold in safer and smarter hands again. That process continued last week with another nine metric tonnes sold until Friday came along and four tonnes added, the first real add in a couple of weeks.

That’s indicative of a new appetite for gold from the speculative end, the type of money that pushes gold higher on momentum. From Brexit to peak spec, we saw 66.82 metric tonnes (mt) added to GLD. That retraced to last week’s low by 28.21mt. If that hot money is about to slosh back in and momentum runs again, this move would see GLD holdings challenge that big round number of 1,000mt. And talking of momo, it’s not my idea of entertainment and never watch it personally but trusted friends who do note that the talking heads on CNBC started giving bullish predictions on gold again. Here’s an example and here’s a typical paragraph on offer:

“Until and unless central banks begin to tighten policy, gold continues to be an unabashedly strong buy,” said Schlossberg on Thursday on CNBC’s “Trading Nation.” “That’s been the theme we’ve seen building up all through this year, and yesterday was simply a confirmation of that.”

That's Boris Schlossberg  (great last name, “mountain castle” or “mountain palace”). We need of course to be clear that when CNBC latches onto a bullish idea it’s already mature, but these people are watched by the momo crew par excellence.

Summing up the gold chat intro, the metal did indeed lead the miners, the miners did a good job of catching up but there’s evidence and enough momentum talk post FOMC to say that gold is going to blow away my early July prediction of a slow summer. So to answer my own question in the title, put me down for a hot summer and let’s see gold break away from U$1,350/oz next week. Reasons to be cheerful.