Gold Was “Fixed” At The London A.M. Price Fix

They often “fix” the price of gold at the London a.m. price fix – that’s for sure.  Although the LBMA London gold fix mechanism was supposedly cleaned up and reformed, those of us who have studied the gold market for at least the last 14 years know that the London “fix” is still the same old corrupt price-fix scheme.

Last night was particularly blatant, as gold was threatening to break over the key 200 day moving average technical level ($1,176 on the continuous contract basis) – note:  the x-axis is Mountain Standard Time, all references are in EST – click to enlarge:

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As you can see from the graph above, the price of gold was moving laterally during most of Asian/Indian trading hours. Not shown is the $9 gap up in the price of gold about an hour in to the Globex system trading session (9:10 p.m EST) when China devalued the yuan.

In the half-hour of the designated London a.m. “Fix” period, 9,620 paper/electronic Comex gold contracts traded, representing 962,000 ozs of gold (the Fix is a process, not a point in time).  This is compared to the 171k ozs of gold reported by the Comex vault custodians as being “deliverable.”  In the 30-minute period prior to the London “Fix,” a mere 1,260 paper/electronic gold contracts traded.  In the 30-minutes subsequent to the “Fix,” 2,871 contracts exchanged hands.    Please note: there were no news reports or events that would have influenced any of the trading markets during the London “Fix.”

Personally, I’d like to see an independent audit of the bars – visually open to the public – which includes all of the record-keeping associated with each bar.  In other words, contrary to most well-read gold market analysts, I do not trust or believe the vault reports as submitted by the HSBC, Scotia and JP Morgan, who control 96% of the total reported on the Comex.

It’s pretty obvious that as the price of gold threatened to take out a key technical level, a large seller dumped an “electronic contract bomb” on the market, which triggered hedge fund algo technically-driven selling as a means to take the price down.

Interestingly, gold shot right back up after the dismal U.S. retail sales report released at 8:30 a.m. EST.  There’s no question that – at least for now anyway – gold is behaving differently than it has over the past four years.   It seems that price hits are being bought rather than chased lower and moves higher are being chased higher rather than being sold.

Certainly the fundamental support underlying the gold market continues to strengthen every day, as it has for the last 15 years.

16 thoughts on “Gold Was “Fixed” At The London A.M. Price Fix

  1. But the AM fix price was 1173.70. This post doesn’t make any sense.

    You seem to be trying to allege that prices were manipulated lower on the London Fix, right? but that didn’t happen.

  2. But the net effect is, they were destroyed in the end!

    Never seen such price-action in the last 2+ years. Something has changed radically & incredibly different.

  3. What most people fail to get is that Comex players are not in the slightest interested in ever taking physical bullion. They’re in it for paper money gains ONLY. They will continue in this pursuit a infinitum…they’re NOT interested at all in GOLD. The Comex is a casino, one whose price-setting authority is being protected by government/regulators because they NEED to regulate the price of the metal…

    This CAN go on indefinitely, even if there is ZERO “registered” or “eligible” metal. The only thing that will stop it is to force government to divest the Comex of that price-setting power.

    1. If the future long trades on comex stood for delivery, the comex would either have to buy large quantities of gold to cover or default, either of which would send the price higher. The question is, “Why isn’t someone doing just that?” I suspect the buyers don’t want to upset the system as the price is way down and they want to accumulate as much as possible as cheaply as possible. But the clock is ticking and this is a strategem the Chinese must ultimately consider (nor to mention anyone else who wnts to upset the party).

    1. I think there’s a lot better shorts out there than WMT. WMT is cash flow producing business with nearly a half-trillion in revenues. There’s plenty of overleveraged companies in hyper-cyclical industries that will go from $25 to $2.

  4. The more people take delivery, the harder it gets’ for these assholes’ simple, the demand for money is virtually infinite..the supply of real money Gold/Silver is not, they can not scam this much longer which is why even for little people a purchase of real money is a vote for freedom JMO

  5. Well said,,,,

    The problem of the governments,,,that is Governments,,,,,,need to diminish golds appeal to the investors.Indians and Chinese as well as collectors cherish ,,physical gold ,,,not a Phoney promise of GLD or the bogus Comex doing the heavy lifting for the Paper Printers…

  6. The XAU index has tested the 2000 low last month – the lowest since 1990, believe it or not.

    It is now paramount to convincingly break above the 2008 low as the resistance to reverse the downtrend.

    This gold/silver miners’ bear market is the most disgusting one in decades, and the most unjustifiable considering how paper money has been created since the 2008 financial collapse.

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