After moving significantly higher on Wednesday and Thursday following the dovish monetary policy issued by both the Federal Reserve and the ECB, the precious metals were ambushed Friday morning by the Comex bank cartel. Right before the Comex gold pit opened on Friday, thousands of gold and silver contract were dumped wholesale into the Comex Globex computer trading system. The deluge continued for over an hour (click on image to enlarge):
The chart above is the July Comex paper silver. From 8-9 a.m. EST, 21,922 silver contract were dumped on the Comex. This represents 109.6 million ozs of silver – roughly 13% of the total amount of silver produced my silver mining annually. It also represents 40% of amount of physical silver allegedly held in Comex silver vaults as reported by the vault operators (primarily JP Morgan, HSBC and Brink’s). Friday was by far the largest volume day for the July contract going back to late April, when July became the “front-month” contract for silver. The same dynamic occurred in gold on Friday.
In the latest episode of “WTF Just Happened?” we discuss how and why the precious metals were smashed on Friday, as the Comex banks printed $10’s of millions in profits covering their enormous short positions in paper gold and silver ((WTF Just Happened is a produced in association with Wall St. For Main Street – Eric Dubin may be reached at Facebook.com/EricDubin):
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By smashing gold down they can easily manipulate the price of gold producers and acquire more shares, they can’t do it so with the price of gold. Nothing will beat the Gold at the End.
This will not end until the manipulators are jailed, which will never happen. Saying that gold and silver are good long term investments assumes there will not be any manipulation in the long term, and there is no reason to assume this.
I think you are partly right. They won’t be jailed, but as Dave has pointed out, the COMEX manipulation won’t last forever, and there can be COMEX default. If I remember what he wrote there are at least two ways they can default.
Cautious realistic people think of G & S as quality stores of value/purchasing power [that are outside the system] rather than investments. The price of both isn’t much above the average cost of mining & refining to .999. That sets the floor in price other than a brief drop if there is a big equities selloff/deflation event. But the price would rapidly come back up because there are always gold & silver buyers at close to mine & refine prices.
I’m just not sure how any COMEX problems will prevent the manipulation.