Huge Money Flow Into GDX Today (September 4th)

Obviously gold/silver and the miners were hit hard today.   I can’t emphasize enough that the sell-off in the sector was 100% a product of an extreme degree of market intervention in the precious metals by the Fed/Comex Paper Bullion Banks.  How do I know?  Because if you look at an overnight graph of the price of gold, you’ll see that gold and silver drifted higher during Asian trading hours.  Asia, of course is where massive accumulation of physical gold and silver is occurring.

Gold and silver did not get hit until about an hour before the Comex – long after Asian investors were in bed.   That was right around the time that the ECB announced taking its interest rates more negative – something which should have been very bullish for gold.

I bring this up because a reader sent me a link from the Wall Street Journal which shows the money flows in and out of stocks.  As it turns out, GDX – out of all of the stocks on the NYSE – had the largest inflow of money:


The metric is calculated by adding up the dollar value of uptick trades minus the dollar value of downtick trades.  A stock can only have an uptick if enough investors step in to buy it at a given point in time.   With GDX, $291.43 million shares traded on an uptick (meaning buyers lifted an offer) and $77.58 million traded on downtick trades (sellers).   Now this does not mean that stock can’t go down just because more money flowed in on upticks than flow out on downticks.  $1.2 billion worth of stock traded (buyers can buy stock from sellers on market crosses or no-ticks – this would be money flow neutral;  if market makers see a lot of sell volume being offered, they take down their bid side – that’s how stocks can go lower even though money flow on the day is positive).

I thought this report was interesting and it further confirms my view – a view not originated by me and one that is shared by many market observers – that money is flowing into the miners even on days when the market is lower.

Today was the kind of day in which you kind of had to grin and bear.  I traded in and out of JNUG all day long with limited success but at the end of the day I added to mining positions.   In fact, as more evidence that manipulators were “shaking the tree hard,” JNUG was ripped down with about 10 minutes left in the trading day and popped back up more than 80 cents off its low in the last minute of trading.   Umm, that would be aggressive and rampant short-covering, fyi.

The “foot forward” with regard to today is that it was a manipulated sell-off designed to scare precious metals investors.   My other inclination, when I watched them hammer the metals on news that was metals’ bullish was that something really ominous is going on behind the scenes because they always smash gold ahead of an unpleasant event (see the late summer of 2008, for instance).

Everyone should hope my “best foot forward” is the correct alternative…

14 thoughts on “Huge Money Flow Into GDX Today (September 4th)

  1. Dave, the dollar was up a full point or so today, and correlates pretty well with the timeframe that gold headed south.

    Looking a little longer, the dollar has been on a tear since late June, and gold seems to have done the reverse over the same timeframe.

    Isn’t this simply a matter of the dollar is king among crappy currencies lately esp. with the euro stuff going on, and gold is suffering in dollar terms because of that, vs. manipulation?

    Is it better to say the Euro is being “manipulated” to the detriment of gold in dollar terms?


    1. In my opinion, the falling price of gold is 100% related to the paper manipulation on the Comex. It explains why every night gold rallies in Asia and gets hammered when the Comex opens. Once the Fed/paper bullion banks get the ball rolling downhill, then the hedge funds pile in.

      I was exchanging emails with Paul Craig Roberts early and I said that “I was getting disturbed by the degree of criminality that has engulfed our system.” His was reply was “it’s not a matter of degree, it’s total”

  2. Despite the GDXJ beating 2 of Dave’s research report mining stocks (that I own) ended green today, 1 of them was up 15% a few hours into trading, finishing +7.41%, on nearly 10x normal volume. I’m not going to capitulate.

    Seahawks offense was a thing of beauty tonight.

    1. Broncos/Seahawks super bowl rematch seems inevitable, barring key injuries to either team.

      I can’t see this manipulated sell-off in the metals lasting much longer.

  3. Why are u telling us this?

    talk to the hand, or better yet, talk to the Rickypoo, you know, sprocket’s arrogant asswipe sidekick, who must be trying real hard to look, act and sound like a Casey MiniMe. they both reminded everyone just weeks ago that there’s nothing fixed or abnormal about all this!

  4. The price manipulation of precious metals today could be only a prelude to more drastic measures in the future. If I remember correctly, under Hitler and Stalin, the possession of precious metals was punished by a mandatory death penalty. In Nazi Germany, there was a special police unit whose only task was to catch those who traded gold in the black market. In a certain sense Nazi Germany was forced to do that in order to be able to pay for essential imports with gold. The German currency at that time was not accepted in foreign trade. Gold on the other hand was eagerly accepted. Similar events took place in France during the French revolution.

  5. Gee, all time high on the GDX before it was declared public enemy #1 and shorted into the Earth’s core was the week ending 9/9/11. But wait, exactly 5 months earlier, they deflated the osama blow up doll and knocked 35% off the blowmex silver price all in the span of 5 days as well. Very subtle signaling in the physics v. hubris arena.

      1. I’ll buy that. I think they did us a favor though. I would prefer the price just get knocked back down to the strong support and create another buying opportunity than continue this sideways crap.

        JNUG volume was pretty thick yesterday, not to mention over 25,000 contracts during after hours!

  6. Dave, the last few days have seen massive volume in gold, though nobody seems to talk about it. It seems larger even than on the april and june 13 drive-by-shooting take-down. Could this be the play where the commercials unload their shorts to the hedgefunds and go net long (i.e. operation bag-holder). If so, we might be off to the races before long… Any thoughts? Thanks for sharing all your insights, it’s much appreciated.

    1. Commercials using shorting by the hedge funds to cover shorts. GDX is the tell-tale in terms of money flow. Smart money was buying yesterday.

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