Central Bank Intervention Slams Paper Gold

This isn’t some trader’s “fat finger” accidentally overloading the sell button and pressing “sell.” This is unadulterated BIS/ECB/BoE/Fed sponsored market intervention:

At 4:01 EST, a paper gold nuclear bomb was detonated in the Comex Globex computer system. The graph above is just the August “front month” paper gold contract on the Comex. In that contract 1.49 million ozs of paper gold were dumped into the Comex electronic trading system. Zerohedge is attributing 1.88 million ozs. That would include the selling in all of the paper gold contract months.

But that’s not the entire amount of the paper hit. There would have been a large amount of LBMA gold forward paper gold contracts dumped in correlation with the Comex paper avalanche. ZH attributes $2.2 billion in paper gold dumped.  But the real number including LBMA forwards dumped was much larger.

“The mysterious plunge has the market spooked,” says some idiot named Bob Habercorn from RJO. This was not “mysterious.” It was intentional – a shock and awe market intervention that was intended to “spook” the market. That quote is from a Bloomberg report full of fake news (caution, this article contains fake news:  LINK).

The article claims that China bought less from Hong Kong in May. In fact, the amount of gold exported from Switzerland to India and Hong Kong was up 39% from April, according to Platts. Furthermore, we have no clue how much gold moves into China through Beijing and Shanghai, numbers which are intentionally hidden from the world.

Here’s the reason that today was selected by the BIS et al to attack gold in the paper market in an effort to scare the crap out of the market:

the day was well chosen as the Muslim world including Turkey was closed for the end of Ramadan as was India which has the amiable habit of observing the holidays of religious minorities. – from John Brimelow’s Gold Jottings

Two of the largest buyers of physical gold in the world right now, India + Turkey, were closed for the observance of a religious holiday. And Shanghai closed for the day 31 minutes before the paper dump.

4:00 a.m. EST is one of the slowest, lowest volume trading periods during any 24 hour period. Why would a seller of a large number of contracts sell at that time of day, when the largest buyers of what is being sold are not in the market at the time of the sale?

If it were merely a “fat finger” – the fake news narrative – then the mistake would have been immediately corrected and the price would have quickly recovered.  Anyone who buys the “fat finger” story is either tragically ignorant or hopelessly naive.

When India returns tonight to the market, I would expect gold to get a strong bid.  Indians have a habit of buying a lot more physically deliverable gold than they might have otherwise when the western Central Banks put gold “on sale” by lowering the price in the paper market.  I suspect Turkey and China will increase their appetite as well.

The mining stocks per the HUI barely acknowledge the artificial price take-down.  The HUI is down less that 1%.  In the past, on a day when gold was taken down to this degree, the HUI would have dropped at least 4-5%.   It’s almost as if mining stock traders are laughing at the latest Central Bank antics.  I know I am…

12 thoughts on “Central Bank Intervention Slams Paper Gold

  1. Acknowledging the wisdom of Buttercup
    (in Gilbert & Sullivan’s Pirates of Penzance)

    “Things are seldom what they seem,
    Skim milk masquerades as cream;

    Black sheep dwell in every fold;
    All that glitters is not gold.”

    Events in markets over the past while suggest to me that the black sheep are having their teats squeezed harder to give more skim milk than ever these days. And if that were not enough white stuff to spread around, someone seems to be milking the rams as well. What I’m thinking about is that in addition to the usual supposed fat fingers dumping paper gold, there is a new “store of value” supply being spread around: cryptocurrencies. I have read a good bit about these, and know that they are supposed to stand on a par with actual physical gold and silver as alternatives to fiat paper and dancing electrons. So far those of us who wish to use stores of value that have been around for 6000 years still are free to choose those over cryptocurrencies that have been around for about 1/1000 as long. Caveat emptor

    1. Crypto is not a storage of wealth , because they were actually thinking of increasing the amount of coins to mine .The fact they can do it, that is enough for me to see that it is not a storage of wealth.
      Crypto is a bubble ,think of the biggest fool theory

      1. Yup.

        The nature of bubbles is that the things that are rising exponentially in price seem to be desirable simply because they are rising so rapidly in price.

        Until they don’t.

        Speculators who think that they are immune to such emotions should look up the history of Sir Isaac Newton’s capital allocations into shares of the South Sea Company.

    1. “There are over 830 “alt-coins,” as the alternatives to bitcoin are called, out there, with new ones being added constantly. The “market cap” of all these cryptocurrencies combined, according to the Financial Times, has pierced the $50 billion mark. So this starting to involve serious money.”
      – from WolfStreet 15 May 2017

      Any given cryptocurrency may (in theory) be limited in amount issued. The total number of cryptocurrencies that can be loosed on the world is without any limit other than the creative imagination of issuers (sharks) and the credulity of purchasers (marks). Remember .com prior to 2000? Sharks have longer memories than marks.
      And more teeth.
      – RBE 27 June 2017

    2. The deep state does not have to be involved 1 bit. Human nature has proven over the centruries that all man made ”constructs” can and will be corrupted. Hence the fork at bitcoin. Within less then 10 years of bitcoin, they already want to issue more of them even when it was as good as gold and their main sales pitch. Need I say more?

      Regards,
      Hugo

  2. I wonder why the gold price falls 4% when the dollar index rises only 1%, and vice versa
    why the gold price drops/ or rises only 1% when the dollar index falls 3%, no one analyst
    has talked about these cases till now.
    what is really very strange and out of any logic , is why should gold price declined 4%
    from june 6 ($1296) to june 27($1238) while the US dollar index on june 6 was 96.52
    and today on june 27 is at the same value 96.52 !!
    Is there any analyst who can justify these anomalies and contradictions in this fucking
    civilized western markets???

  3. Why do more investors not keep their futures to maturity. Forcing to settle for gold that does not exist will result in hefty penalties. Defaults would also drive up the value of outstanding futures.

  4. All markets are fake and corrupt since they are products of the establishment, which is rotten to the core. The only thing less rigged is your local farmer market, but I’m not sure on this one either.

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