Today’s Gold Price Take-down Operation Has The Smell Of Desperation

I had a feeling that gold and silver were being put on the “down” elevator by the bullion banks when I checked prices late in the evening  last night and saw that gold had been hit for about $8 right at the open of trading in Australia.  A quick drive-by hit when Australia opens has become almost as common an occurrence as the near-daily price take-down at the opening of the Comex floor trading in New York.

Then Bloomberg, Reuters and the Wall Street Journal each published conspicuously negative news articles which predicted a big drop in the price of gold during 2014.   All three articles were based on a recent report published by the World Gold Council which contained highly questionable estimated data on China’s YTD demand for gold and an even more highly questionable forecast for China’s full-year gold demand in 2014.  It was clear that none of the reporters who wrote these articles had vetted the WGC’s data, which has been shown to be remarkably unreliable in the past.  See this report, for example:  Chinese Gold Demand and the WGC’s Estimates.

Furthermore, the Wall Street Journal’s article highlighted a comment  about the gold market from some money manager in Miami.  It was a name I had never come across in nearly 14 years of studying, researching and trading the gold market.   The money manager’s commentary was riddled with incorrect statements and nonsensical assertions.

Shortly after the Shanghai gold market closed last night, the market manipulators went to work on the gold price.    Gold was taken down another $20 during the morning trading in London, primarily in three HFT trading induced “mini flash crashes.”  There were not any related news reports or events that would have triggered the relentless selling of paper gold (Comex futures via the Globex system and LBMA forward contracts).

As soon as the Comex floor trading opened at 8:20 a.m. EST, nearly 4,000 contracts were dropped instantaneously onto the floor and into the Globex system.  This is over a half a billion dollars worth of gold – over 10 tonnes of paper gold – in a nano-second.    This amount represents 47% of the amount of actual physical gold that was reported to be available for delivery by the Comex yesterday.   The sudden burst in volume halted the Comex computer system for 10 seconds.   The contract bomb caused an immediate $16 plunge in the price of gold.   Over a period of 7 minutes from the time the Comex opened, over 14,000 contracts traded.   This represented over 18% of the total volume in Comex contracts that had traded in the previous 14 hours of trading starting at 6 p.m. EST the night before.

Obviously this is was intentional and determined selling  of paper gold for the purposes of driving the price a lot lower.  The news reported over the last 24 hours, if anything, should have caused the price of gold to move higher.   This includes the re-escalation of the events in Ukraine, an inflation report released this morning which showed that the rate of inflation in March was double the rate that was expected by Wall Street forecasters and a report of manufacturing activity in the northeast which was significantly  lower than expected.

It is no coincidence that today is the anniversary date of last year’s $200 price plunge in gold.  In fact, about a week prior to last year’s intervention operation, a series of bearish articles and Wall Street analyst reports started hitting the newswires, similar to the flurry of news reports that were released last night.   It is painfully obvious to anyone paying attention that there is a serious effort being conducted by the Fed, the U.S. Government and the big banks to hold down the price of gold.

The reason for this is that the U.S. Government is growing more desperate by the day to prop up the stock market and the U.S. dollar.  Russia and China have been announcing a series of deals between each other and with several other large trading partners to begin conducting oil and gas trade using their respective currencies, thereby completely bypassing the use of the U.S. dollar.  It is clear that far and middle eastern countries are working to systematically scale down and phase out the world’s reliance on the U.S. dollar and the catastrophic political and economic policies it represents.

23 thoughts on “Today’s Gold Price Take-down Operation Has The Smell Of Desperation

  1. It’s a holding card game right now. Paper currencies cannot hold value for very long when the system is rigged. The US dollar will at least reached a partial devaluation due to other countries deciding to trade in other ways. I think the global economy will become a barter-like system where you trade items that have real worth (metal ore for oil, as an example) and eliminate floating paper currencies in the process entirely . The inner economies of nations will still use the toilet paper to make their people still think its worth something.

  2. Thank God for the manipulation. Could be collateral stress?

    We get to buy at lower prices.

    I just wish they manipulated the price of food, clothing and shelter lower as well.

  3. When the markets are being run by sociopaths and narcissists, the end result is ugly. Today was just another example of the blatant frauds being orchestrated within our financial system.

    Just sad, very, very sad.

  4. If a flurry of negative news articles are suddenly cropping up (in the same way as they did last year and just before the big price smash), might it be reasonable to conjecture that another big smash is just around the corner?

    1. Anything’s possible but GOFO is negative now and it wasn’t back then. They had an easier time sourcing the gold bars they dumped on the LBMA. I think if they smashed gold the way they smashed it last year, it would lead to default into China.

  5. “Each Spring, thousands of government officials, journalists, civil society organizations, and invited participants from the academia and private sectors, gather in Washington, DC for the Spring Meetings of the IMF and the World Bank Group. At the heart of the gathering are meetings of the IMF’s International Monetary and Financial Committee and the joint World Bank-IMF Development Committee…”

    Wednesday’s opening IMF seminar was titled “Managing the Transition to Normality – Implications for Fiscal Policy.” From panel moderator Rob Cox (Reuters): “Or, as one of my colleagues said, ‘Isn’t this the panel where you ask the question whether the world is ready for a withdrawal of the punchbowl.’”

    a portion of the air-head stupidity that went on at this IMF seminar:

    Citigroup’s chief economist Willem Buiter: “Financial stability is a key responsibility of every central bank. And if it’s a choice between inflation or whatever – and financial stability, then financial stability comes first.”

    Federal Reserve Bank of Chicago President Charlie Evans: “Wow, that’s amazing! That’s amazing to me! Are you kidding me?”

  6. PRICE aka Predetermined Results In Currency Exchanges
    have year in, year out been
    PIMPED, i.e. Priced In Money Pumping Every Day
    as traders have belatedly learned
    Patterned Open Operations Persist
    to the dismay of family finances leading to
    Dislocated Old Guys Divorced Away Yellow Stashes
    calling to mind, at what price piece?

  7. Hi Dave, good work once again. I’m sure your work queue is a mile long, but if time and opportunity allow maybe you could write a little about how the manipulation on the downside is more egregious and worrisome than any manipulation that may have occurred on the way up. We’ve all seen the posts/trading charts showing massive contract buying that sometimes occurs on big up-days, so I’ve no doubt there’s monkey business in both directions. It’s not just downside manipulation happening. But if anyone can explain in layman’s terms why the downside manipulation is the more egregious, it’s you. Thanks again!

    1. There isnt’ any intentional manipulation on the upside. A lot of the flow in gold futures is from the big hedge fund “black box” HFT algo trading. When gold moves higher above the standard t/a signals, hedge fund computers pile in. Same is true on the downside. The difference is that the banks/Fed/ESF drop massive paper bombs on the market to trigger the downside flood of selling. Trust me, the Fed doesn’t go in and buy 5k contracts all at once to trigger an upside spike.

      If the Fed stopped its intervention, the gold market volatility would be primarily to the upside and current price would be well over $2,000

  8. The bastards are still in charge. It is the main reason that I laughed at Sprott’s 2100 dollar gold call and told him I would bet my house that he was wrong.

    These are very desperate times and the bastards are going to try and do anything they can to rescue the dollar from the collapse it so richly deserves.

    1. Yeah, speaking of, anyone seen him ? LOL. he’s not even on the interview circuit these last few weeks that i can find.

      maybe because someone noticed & pointed out the hypocrisy of his sidekick Ricky saying publicly this area is dead until late 2015.

      but kharma can backfire humorously, as in:
      i wonder, but do not care, how many (or few) subscribers are left at notoriously shifty but sickeningly arrogant characters like casey, who see absolutely no hidden hand at work.
      i can only hope to see him collecting empty beer cans from trash bins in under a few years.

  9. Gofo negative up to three months out, and at – as far as I could tell – a 10+ y record low for the 12 months at a measly 0.088 %. Just let them take paper gold down to sub-1050, at this point it’s just all so ridiculous. Bring it on, bring it on, I’m a happy buyer at 1050, at 950, at 850, though I seriously doubt it will come to that, or if so, the recovery to and past current levels will be very quick and V-shaped. Ditto for 14$-Ag.

    1. I know some dealers who mysteriously run out of inventory when price falls abruptly, only to have it all back, after price returns, or after they’ve tacked on a fat premium.
      Imagine his reverse situation, when gluttonous out of towners arrive to clean out inventories when the bull just resumes momentum.
      The wise dealer will ration his sales, knowing replenishment price and availability will not cater to all his restocking wishes or needs.

    2. target $13.50 ?
      apr 15
      this guy is as big a megalomaniac braggart as the likes of sprocket, grandich, etc but at least he’s been right far more than they have.
      Phase E has been the unfolding congestion since the June 2013 low. This congestion appears to be taking the form of a descending triangle with support in the 1800 to 1850 zone. Should this support give way, then the 1660 target would be quickly met, with a further target down to 1350.

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