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Price Suppression Theory Mainstream After Single $650 Million Sell Trade

GoldCore's picture





 

Today’s AM fix was USD 1,255.50, EUR 929.59 and GBP 787.79 per ounce.
Yesterday’s AM fix was USD 1,276.00, EUR 941.49 and GBP 799.50 per ounce.

Gold inched up $2.50 or 0.2% yesterday, closing at $1,272.70/oz. Silver slid $0.03 or 0.14% closing at $21.26. Platinum climbed $12.80 or 0.9% to $1,376.50  /oz, while palladium rose $0.09 or 0% to $711.59/oz.

 

Gold In USD, 3 Days - (Bloomberg)

Gold  snapped a four day losing streak yesterday but is under pressure again today. Gold traded in a narrow range overnight prior to aggressive selling that saw gold fall to $1,255/oz. Gold is hovering near three month lows despite the political shenanigans and impasse in Washington.

Gold, whose safe-haven appeal is usually burnished during times of geopolitical and economic uncertainty, has failed to gain despite protracted wrangling over the fiscal deadlock in the United States.

It has dropped about 5% towards $1,250/oz since a partial government shutdown began on October 1 and this is, in conjunction with frequently strange trading patterns is leading to deepening concerns about price suppression.

The massive single sell trade on Friday, estimated to be worth a staggering $650 million, which knocked prices $25 lower in three minutes and the poor performance of gold despite the appalling political chicanery in Washington and the U.S. fiscal and monetary position is leading to more questions regarding price manipulation and suppression.

Alex Rosenberg, a producer at CNBC (click on link for story) wrote the following:

“Gold dropped $25 in two minutes Friday morning following what appeared to be a single massive sell order, and professional traders are now pronouncing the sale a deliberate attempt to manipulate the market.

At 8:42 a.m. ET Friday morning, a firm appeared to sell 5,000 gold futures contracts "at the market," meaning at whatever price was available. The massive order was more than the market could take at once and led the CME to automatically halt trading for 10 seconds.

Eric Hunsader of Nanex told CNBC.com on Friday that 2,700 contracts were sold, which triggered the halt, and that the remaining 2,300 were sold once the market resumed trading.
Since one futures contract controls 100 troy ounces of gold, and each troy ounce was worth $1,285 at the time of the sale, this party was selling some $640 million worth of gold in one shot. And it overwhelmed the liquidity in the market.

"Anyone with knowledge of the size and volume in the market would absolutely never, ever place a 5,000 [contract] sell [order] at market, because you could not estimate the offset price," said iiTrader CEO Rich Ilczyszyn.

If Ilczyszyn's firm were placing the order, he said, "we generally would piece the order in to work a better price." That's why he believes the trade was "an error."

Jim Iuorio, managing director at TJM Institutional Services, sees similarities between what happened to gold Friday and what happened Sept. 12, when a big gold sale at 2:54 a.m. ET similarly caused a trading halt and hurt the market.

"There is only one conclusion that seems logical regarding Friday's gold trade and the one from a month ago, and that's that they were designed to manipulate prices," Iuorio said. "They were slightly different, in that the one from a month ago was done when the market was illiquid in order to get the biggest prices movement. Friday's was done around the opening to ensure that there was maximum visibility." 
 

Gold In USD, 20 Days - (Bloomberg)

Meanwhile in Australia, Robin Bromby, veteran finance journalist, author and publisher wrote in The Australian (click on link for story) below:

OCCASIONALLY it's useful to be reminded that not everything in the metals markets revolves around China.

That country has an interest in lower gold prices (making it cheaper to buy up much of the world's supply) but Beijing seems unlikely to have been involved in "unusual" events on Friday in New York. Out of the blue, just after the opening at Comex, there was placed a sell order covering two million ounces, an order so big it triggered an automatic 10-second trading interruption (and a $US30 an ounce fall in the metal's price).

If you were to round up the usual suspects, your first instinct would be to pull in the Federal Reserve and other central bankers along with the funds that do their bidding. After all, gold is the enemy of the money printers. The more money being created out of thin air, the more people trust those yellow bars.

There was a huge order unloaded on October 1, too, and then we had that episode in April when, within two hours, 13.4 million ounces was unloaded through Comex. Someone is determined to knock the stuffing out of gold.

 

Gold in US Dollars 5 Years with Support and Resistance - (Bloomberg)

Gold’s price falls are very counter intuitive and suggests that Wall Street banks, either independently or in unison with the U.S. authorities possibly through the Working Group On Financial Markets  or the Plunge Protection Team, are suppressing gold lower.

This appears to be being done through manipulation on concentrated selling on the COMEX.

The Gold Anti Trust Action Committee’s (GATA long asserted claim that gold is being manipulated in order to maintain faith in the dollar and erode confidence in gold as a safe haven is looking more and more plausible by the day and appears to be going mainstream.

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Wed, 10/16/2013 - 08:12 | Link to Comment orangegeek
orangegeek's picture

Spot gold daily shows wave 5 down completing - looks like wave 5 will be some sort of diagonal.

 

http://bullandbearmash.com/chart/spot-gold-daily-climbs-early-falls-wave...

 

The retrace should take us back up to 1400 after we complete this down move.

Wed, 10/16/2013 - 08:09 | Link to Comment GFORCE
GFORCE's picture

Maybe there is price suppression but there is billions of dollars in capital flowing around the world so it's free to snap up gold and take advantage of what you consider to be falsely lower prices... but it's not.

Gold is in a downtrend and yes, manipulation to exacerbate is likely rife. Just as it is all markets. But if the general consensus was for higher gold, then nothing would stop it- as was the case in the run up to 1800. 

 

Wed, 10/16/2013 - 09:01 | Link to Comment BigJim
BigJim's picture

Let's see if you actually have some understanding of what is being claimed.

Huge amounts of 'gold' are dumped on the futures market, often at times of least liquidity - ie, the seller is not trying to get the best price they can for what they're selling... unusual behaviour for a profit-seeking organisation, I'm sure you'd agree. So either the seller is either wildly incompetent - which seems unlikely given the amounts involved and the time span this has gone on - or not actually interested in making a profit. But if they're not interested in making a profit... why are they trading at all?

This 'gold', by the way, is actually paper claims on future gold delivery, on an exchange where less than 5% of the gold traded actually exists.

Gold is in a downtrend and yes, manipulation to exacerbate is likely rife. Just as it is all markets.

O really? In what other market is there such blatent manipulation of prices downward? Apart from Gold's little sister silver?

But if the general consensus was for higher gold, then nothing would stop it- as was the case in the run up to 1800.

No, if the general consensus was that gold's price should be higher, we'd see inventories being drained because that's what price-capping always leads to: shortages. And, indeed, we're seeing vaults being steadily drained as gold goes from West to East.

Wed, 10/16/2013 - 05:16 | Link to Comment davidgdg
davidgdg's picture

Sorry but I don't buy the manipulation theory. Gold rises on two things. The first is inflation fears. Well that has been a bust. We've had warnings of inflation and even hyper-inflation since the Fed doubled the base money supply in 2008, but it simply hasn't happened and there is no immediate sign that it will. If anything, the global  money supply is likely to fall in the near term (especially with the prospect of a credit collapse in China). The second is short-term stresses such as war, bank collapses or major sovereign defaults. Again, there is nothing of that sort on the immediate horizon (I am ignoring the US debt ceiling debate which is just political theatre). So it is hardly surprising that gold is falling. In the long term I am still bullish and I hold plenty of physical but I think it is going to be a challenging two or three years for us.

Wed, 10/16/2013 - 08:50 | Link to Comment BigJim
BigJim's picture

The article gives ample evidence of price rigging to the downside... and you start talking about what causes the price of gold to rise?

Doofus.

Wed, 10/16/2013 - 05:37 | Link to Comment bombdog
bombdog's picture

No I guess a 5,000 contract bid whack was just a bonfide sale.

Wed, 10/16/2013 - 01:58 | Link to Comment jvetter713
jvetter713's picture

If Ilczyszyn's firm were placing the order, he said, "we generally would piece the order in to work a better price." That's why he believes the trade was "an error."

"Error" not being the word I would have chosen but whatever.

Wed, 10/16/2013 - 00:00 | Link to Comment TyrannoSoros Wrecks
TyrannoSoros Wrecks's picture

So who sold it? What was the guy behind like 7 proxies or something and none of these market geniuses can figure it out?

Tue, 10/15/2013 - 23:51 | Link to Comment scrappy
scrappy's picture

A Hobo's got to keep his fiat warm afterall.

Tue, 10/15/2013 - 22:47 | Link to Comment sasebo
sasebo's picture

Lets see ----- someone exchanged $640 million of gold futures contracts for $640 million of digital money. Where did they get the futures contracts? Borrow them? Buy them? If so where did they get the $640 million of digital money to buy them? Where did the party that bought the contracts get the $640 million of digital money? Borrow it? Sit down at a keyboard & create it? All digital money is created by banks. Central or otherwise. Producing companies & workers don't produce digital money. They earn digital money by producing. There's much more to this than meets the eye.

Tue, 10/15/2013 - 23:01 | Link to Comment groundedkiwi
groundedkiwi's picture

ask the NSA , thats what we pay them for.

Tue, 10/15/2013 - 21:44 | Link to Comment WallowaMountainMan
WallowaMountainMan's picture

"Anyone with knowledge of the size and volume in the market would absolutely never, ever place a 5,000 [contract] sell [order] at market, because you could not estimate the offset price," said iiTrader CEO Rich Ilczyszyn"

 

 

so, does that mean anyone with the knowledge of the size and volume in (this) market would not only know enough to not place a 5000 sell but also would be smart enough to know that playing in an illiquid market is a fool's errand?

:)

Tue, 10/15/2013 - 21:36 | Link to Comment Randoom Thought
Randoom Thought's picture

Here's the deal. Fucktard international hedgie-fund-satanic-banks are the only ones that delve into the range of trading hundreds of millions of fiat-poops of gold. The fiat-poop amount is so large as to dwarf the trading of people and real companies.

The fucktard banks should not exist.

Tue, 10/15/2013 - 21:28 | Link to Comment Whatta
Whatta's picture

smells like barack obama and the Fed to me. pee-ewe.

free market...*laugh out loud*

Tue, 10/15/2013 - 21:50 | Link to Comment azzhatter
azzhatter's picture

It's okay. I'll keep my non-maritime disaster physical no matter how low they drive the paper price

Tue, 10/15/2013 - 21:08 | Link to Comment joego1
joego1's picture

Chinese hammer gold with to be worthless treasuries. The Russians help with it eventually to unleash economic war on U.S. when timing is perfect. Is that time near?

Wed, 10/16/2013 - 08:05 | Link to Comment SimMaker
SimMaker's picture

Why bother wasting another Buck?

 

The USA is raging economic war against itself.

Tue, 10/15/2013 - 21:06 | Link to Comment shinobi-7
shinobi-7's picture

And as for the Chinese, even though I have little sympathy, I can only bow very low: they are playing a great game! Is it really possible to outsmart everyone by playing long term? We'll see soon enough.

Tue, 10/15/2013 - 20:55 | Link to Comment shinobi-7
shinobi-7's picture

The manipulation is blatant and most certainly shows that there is no market "regulators" left. But I wonder why people still have hopes that it could be different: Governments have proved again and again that they would stop at nothing to keep the game going so why no believe them as for once they are keeping their word?

Tue, 10/15/2013 - 21:03 | Link to Comment Trampy
Trampy's picture

Does anyone remember the Bernanke Humphrey-Hawkins appearance where at the exact second 10:00:00 AM ET that his statement was supposed to be released, COMEX GC futures got slammed with a 10,000 contract sell order?

Amazingly enough it filled in one piece with a $30-ish gap down in price.  The T&S feed from ToS showed size as 10,000.  Gold was trading somewhere $1500+ and there was huge liquidity for Helo Ben and there was a very brief halt on my T&S feed, but that could have been the trading platform getting overloaded and skipping data as it often does.  .

 Should have grabbed a screen shot of that.

GATA is gaining traction because the only place I could see it mentioned was the Scotia Moccata guy with the Spaniardish-like-sounding name who posts at Kitco.  He didn't say anything about a halt and opined that it must have been a fat-finger mistake because nobody in their right mind would dump 100,000 ounces of gold at market.  Well, only if they were being a bully to slam the price and shake out longs.

Does anyone here remember that and know the date? 

NOBODY posted anything about it here at ZH.  "Ranting Andy" of Miles Franklin covered it in a later synopsis of his gold-smackdown playbooks, but that was months after the fact.

Tue, 10/15/2013 - 19:44 | Link to Comment ejhickey
ejhickey's picture

Just finished my 2012 tax return yesterday and one of the forms i had to file dealt with my MF Global loss.  i claimed a theft loss under the IRS code officially titled "PONZIE SCHEME"   so there you have it:  the MF Global enterprise run by former US Democratic Senator Jon Corzine,  has been officialy classified as a Ponzi scheme by no less an authority than the IRS.

Tue, 10/15/2013 - 21:50 | Link to Comment azzhatter
azzhatter's picture

You forgot to say "Honorable" in front of Corzine's name

Wed, 10/16/2013 - 14:39 | Link to Comment ejhickey
ejhickey's picture

My Bad!  I guess my gag reflex made me forget.

Tue, 10/15/2013 - 19:42 | Link to Comment The Econ Ideal
The Econ Ideal's picture

The issue with large block trades that move markets (especially the futures markets) one way or another is that they remain anonymous, or at least not revealed by the MS financial media. Insiders likely know who the trading party is, especially those running the exchanges, and those with co-located servers that may be able to trace the trading house(s). In short, the collective House knows who executes these large block market-moving trades. The rest of us are at a disadvantage not knowing who the trading party is in these markets - making the futures markets especially dangerous to trade. Good faith trade involves trust and knowledge of your trading partner(s). Producers and hedgers that have a clear insurable interest to physical property being traded may decide to avoid paper contract futures markets that are fraught with considerable problems, including uncertainty, trust and good faith issues. 

Tue, 10/15/2013 - 19:00 | Link to Comment Selah
Selah's picture

Someone far richer than me should start an investment fund that buys a couple thousand contacts at market right after each and every raid.

 

This fund would deliver Gold and only Gold to every pie-in-sky $50,000 an ounce bidder and demand Gold and only Gold from every seller.

 

How long before that is determined to be market manipulation?

 

I think you know the answer.

Tue, 10/15/2013 - 18:47 | Link to Comment Kina
Kina's picture

China has 1.3 trillion USD reserves.....in 5 years how much will its value have depreciated? It will never appreciate, only depreciate, and assuredly over time lose 99%.

 

If Chiina had 1.3 USD in gold today....no matter its value on a particular day 5 years from now...it always revert to mean to achieve a similar or higher purchasing power than now. It will never depreciate so that in 100 years that gold will be as strong as it is today.

 

Why wouldn't you have a large chunk of gold in your reserves? Its better than holding on to fiat that you see being printed at $85bn per month....and with a debt/obligations of $220 tirllion against it.

 

 

 

Wed, 10/16/2013 - 08:41 | Link to Comment Its_the_economy...
Its_the_economy_stupid's picture

Not only that, but you can sell 50-100 claims against that gold and pocket the vig. Nice.

Tue, 10/15/2013 - 18:29 | Link to Comment besnook
besnook's picture

first of all, let's put all the jew bashing in perspective. there was a time in the various christian faiths that, much like muslim banking today, it was frowned upon to make money lending and borrowing money. it was considered a dirty business. the jews had no such issues with banking and filled the gap so the christians could sin to the limit of their bank accounts. that is why the business is dominated by jews at the highest levels of central banking.

 

the chinese ae smarter at this game then the western central banks. after all, they invented the fiat ponzi scheme. the western banks don't care and even think the chinese are foolish for accumulating gold. the chinese have tons of worthless dollars hanging around so they have a great price elasticity but that doesn't mean they wouldn't game the system by pounding the comex short then buying in. the tell would be who is taking delivery. i think the chinese are playing the gld market to pound prices. it is much more pliant without leaving fingerprints.

Tue, 10/15/2013 - 23:47 | Link to Comment buyingsterling
buyingsterling's picture

I think jews dominate banking because they have an average IQ fifteen points higher than whites. They see where outsized profits can be made, and gravitate there. Similarly, they realize that doctors and lawyers will always be in demand because they are 'needed' when people are the most desperate. 

Wed, 10/16/2013 - 06:33 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

I imagine your typically high-IQ Jew shuffling along the potato line in Auschwitz had all kinds of genius theories regarding how that happened.  When I am most desperate, I call a friend, not a lawyer.  And, most people only realize how desperate they are health-wise when they have to spend a pound on cure.  Who do they pay for that?  The trap of spinning illusions is that they tend to spin back to their origins.  Jews should beware insularity, and assimilate more readily.  Likewise for all people.

Wed, 10/16/2013 - 09:09 | Link to Comment shovelhead
shovelhead's picture

The real reason Jewish people value education and excellence in career endeavors is simple.

Jewish Mothers.

To raise a schlub that she can't brag about is the most unforgivable thing a Jewish mother can do.

They become Neuro-surgeons because it is far easier to do than suffer the constant nagging, insults and guilt.

They don't want to rule the world...

It's their mothers who do.

 

Tue, 10/15/2013 - 21:13 | Link to Comment moneybots
moneybots's picture

"first of all, let's put all the jew bashing in perspective."

 

The perspective is anti semitism.

 

George Bush Jr. borrowed Harkin money to buy Harkin stock.  Hillary Clinton turned 1,000 into 100,000 in the futures market.

Should my take away be that the Christians are greedy pigs?  Not that i am aware of.  Neither are the Jews.

When i worked on Melrose, i used to get lunch sometimes at Hy's deli.  A modest businessman running a modest business.  He had a number tattooed on an arm.

 

 

Wed, 10/16/2013 - 02:22 | Link to Comment Element
Element's picture

Clearly you want to pretend you don't understand the common social interaction dynamics between all humans on planet earth, so use silly catch-cries to feign innocence and a pretense of victim-hood.

 

If a scumbag of any variety shoots my child I don't need anyone's approval to feel 'anti' them.

If you act to harm us, first, I won't forget; second, I'm going to do a lot more than be a bit 'anti' you.

Pretending you're innocent or accusing me of 'intolerance' as a distraction from your criminality means I'll plant an axe blade in your face.

But do no harm to us and you'll never have that problem.

But don't ever think that sniveling prattling special-pleading will save your wretched skin if you have caused harm.

Don't forget this - I won't forget what you did.

There is never an expiry on your culpability with the passage of time and distance from your crimes.

Is that description of the mutual interaction dynamics between humans sufficiently clear?

That's fair, right?

Now, is there something in your past that you may feel a bit guilty about, some trepidation, that produces such sniveling special-pleading in you?

 

PEACE

Tue, 10/15/2013 - 21:35 | Link to Comment besnook
besnook's picture

fact based history is not antisemitism. you suffer from transparent skin. know your history. my point is these people who reflexively bash jews should know the historical source of their bashing. christians gave the modern banking system to jews because of religious teachings similar to shia law which is one reason why the rothschild's banking network wants to take out iran ironically and has taken out libya.

Tue, 10/15/2013 - 20:43 | Link to Comment Angry White Dude
Angry White Dude's picture

The Chinese is my theory - they have a shitton of USD and Treasuries rapidly losing value and so I think they are using them as collateral to short commodities and other real assets and to then buy those assets up on the cheap. The Fed/USG is a bit helpless to stop it because a low gold price helps them kick the proverbial can down the road a little longer.

Tue, 10/15/2013 - 21:02 | Link to Comment joego1
joego1's picture

I was just thinking exactly the same thing that you were. It makes total sense. The chinese most likely are looking at the scale of their holdings and realize that if they can tank gold prices and take delivery on phyiscal they will be making a huge profit in the long run. They have such a huge amount of dollar reserves that they have to know that a portion of them will become worthless before this is over.

Wed, 10/16/2013 - 09:04 | Link to Comment BigJim
BigJim's picture

It doesn't make sense to me. How could the Chinese be acquiring gold on the cheap by selling future deliveries of it in unfeasible quantities?

Unless you're suggesting the hammer it down in tranches on the Comes and then buy it steadily back?

Tue, 10/15/2013 - 18:15 | Link to Comment dadichris
dadichris's picture

great buying opportunity :p

Tue, 10/15/2013 - 17:48 | Link to Comment lasvegaspersona
lasvegaspersona's picture

I'm not sure who benefits from these drops other than the operation doing the bear raid....these raids make money...

The Fed may actually want a stable gold price now. If it goes much lower all the physical will be snatched up and it will be game over for the Comex and then the dollar.

My guess is that this is all tolerated by the PTB due to regulatory capture and the fact that somebody is making big money in these trades. How they help thwe Fed I am not seeing (yes I know strong gold equals weak dollar but)...

Tue, 10/15/2013 - 19:36 | Link to Comment ejhickey
ejhickey's picture

if gold goes to $1000, i am cashing out a CD ad buying 100 oz.

Wed, 10/16/2013 - 08:36 | Link to Comment Its_the_economy...
Its_the_economy_stupid's picture

Get ready, go to cash now, deposit in checking account, gold smack down after budget deal (or can-kicking). Buy of your lifetime.

Tue, 10/15/2013 - 17:38 | Link to Comment GoldVsFRNdotCOM
GoldVsFRNdotCOM's picture

What do jews, lampreys, leeches, virii and spirochetes have in common?

Tue, 10/15/2013 - 23:26 | Link to Comment Kelley
Kelley's picture

Q. What do ou have in common with all the paranoid bigots in the world?

 

A. Everything.

Tue, 10/15/2013 - 20:24 | Link to Comment moneybots
moneybots's picture

"What do jews, lampreys, leeches, virii and spirochetes have in common?"

 

Anti semitism

Tue, 10/15/2013 - 17:58 | Link to Comment GoldVsFRNdotCOM
GoldVsFRNdotCOM's picture

Organisms that live at a hosts' expense and given enough time, tend to kill the host.

Tue, 10/15/2013 - 17:49 | Link to Comment Jam
Jam's picture

They all suck?

Tue, 10/15/2013 - 17:42 | Link to Comment Australian Economist
Australian Economist's picture

DNA?

Wed, 10/16/2013 - 05:08 | Link to Comment davidgdg
davidgdg's picture

No DNA in virii. Only RNA.

Tue, 10/15/2013 - 17:31 | Link to Comment Winston Smith 2009
Winston Smith 2009's picture

China.  They want the best price for all of the gold they're buying.

Tue, 10/15/2013 - 17:11 | Link to Comment digitaldaniel
digitaldaniel's picture

Almost worse  than suffering these PPTtakedowns is being forced to listen to automatic flash player audio embeds on ZH pages.  There are no controls in the usual places (just like in banking and government budgeting) so how do I turn them off?  

Do NOT follow this link or you will be banned from the site!