Gold Falls Just 1.3% Despite Massive, Odd 3.5 Million Ounce Sell Orders

Tyler Durden's picture

From GoldCore Gold Bullion

Gold Falls Just 1.3% Despite Massive, Odd 3.5 Million Ounce Sell Orders

Today’s AM fix was USD 1,724.50, EUR 1,327.56, and GBP 1,076.47 per ounce. 
Yesterday’s AM fix was USD 1,741.00, EUR 1,347.00, and GBP 1,087.38 per ounce.

Gold fell $22.10 or 1.27% in New York yesterday and closed at $1,719.20/oz. Silver slipped to a low of $32.92/oz and rallied back, but finished with a loss of 0.91% at $33.69/oz.


Cross Currency Table – (Bloomberg)

Gold recovered somewhat overnight in Asia and again today in Europe despite the sharp selling seen on the COMEX yesterday.

As ever, it is very difficult to pinpoint exactly why gold and all precious metals fell in price. Interestingly, oil fell by even more - NYMEX crude was down by 1% and was down by more than 1.7% at one stage. 

The CME Group, which operates the U.S. COMEX gold futures market, said Wednesday's plunge in gold was not the consequence of a "fat finger" or a human error. The trading wasn’t even fast enough to trigger a pause on Globex, said CME.   

One thing that we can say for certain was that there was massive, concentrated selling as the New York stock markets opened with some 35,000 lots sold which is equivalent to 3.5 million ounces and saw the price fall from $1,735/oz to $1,711/oz between 0825 and 0830 EST.

One sell order alone was believed to be 24 tonnes or 770,000 troy ounces.  Incredibly there was 35% daily volume in just 60 seconds. 

The selling, like all peculiar, counter intuitive, sharp sell offs in recent months, was COMEX driven with COMEX contracts slammed leading to further stop loss selling.

The selling may have been by speculative players on the COMEX. It may have been algo or computer trading driven or tech selling – although this is less likely.

It would be naive to completely discount the possibility that a bullion bank, short the gold and silver markets, may have been trying to protect their large concentrated short positions. The CFTC data shows some bullion banks continue to have massive concentrated short positions - which are still being investigated.

Informed commentators questioned the nature of the selling as a large institutional COMEX trading entity would normally gradually sell a position of this size in order to maximise profit.


Gold Spot $/oz, 3 days 3 minutes – (Bloomberg)

Other speculation was that because of the wholesale liquidation of all precious metals and some other commodities, the selling may have come from a fund forced to sell a range of speculative positions after the SAC Wells notice. 

Futures and options expiration may have also played a role, according to some analysts.

The robustness of gold overnight and recovery this morning is encouraging as normally one would expect to see follow through selling after such a sharp move lower.

The gold mining stocks indices were also higher yesterday which suggests that some precious metal market participants see the move as another mere blip in the precious metal bull markets.

The fundamentals driving the gold market remain very sound with broad based demand - store of wealth, investor, institutional and central bank - continuing to be seen globally. 

There have not been very significant increases in open interest on the COMEX and there is no mania on trading floors and universal bullishness.  

Indeed, this is far from the case today. There continues to be little or no positive coverage of the precious metals in the non specialist financial media. 

While ETF holdings are at record highs - the increase in holdings has been tentative and gradual with no huge jump in demand which would be associated by a market top.

The shoeshine girls and boys have been selling large amounts of gold jewellery in the international phenomenon that is 'cash for gold.' 

Meanwhile figures for mints, refiners and bullion dealers in last quarter show retail investor interest is tepid at best.   


Gold Spot $/oz, Daily – (Bloomberg)

Physical buyers should use the paper playing shenanigans of as yet unidentified players to continue to accumulate on price dips.

Today US GDP for Q3 is released at 1330 GMT.

NEWSWIRE
(Bloomberg) -- Comex Silver Estimated Volume Rises to Highest Since May 2011
Aggregate volume was ~158,580 contracts today, highest since May 12, 2011.

(Bloomberg) -- India’s November Gold Imports Seen at 85-100 Tons, Trade Says
Imports seen higher in November because of festival demand, says Bachhraj Bamalwa, chairman of the All India Gems & Jewellery Trade Federation.

Gold imports by India may decline to between 700t to 750t in 2012 from 969t in 2011 as high prices curb demand.

Gold Fields Ltd., the fourth-biggest producer of the metal, will spin off part of its South African business as a wave of strikes and above-inflation pay gains add to costs and curb output for mining companies in the country.

(Bloomberg) -- IShares Silver Trust Holdings Unchanged at 9,818 Metric Tons
Silver holdings in the IShares Silver Trust, the biggest exchange-traded fund backed by silver, were unchanged at 9,818.07 metric tons as of Nov. 27, according to figures on the company’s website.

================================================================================

                Nov. 27    Nov. 26    Nov. 23    Nov. 21    Nov. 20    Nov. 19

                   2012       2012       2012       2012       2012       2012

================================================================================

Million Ounces  315.658    315.658    315.658    315.658    317.643    318.127

 Daily change         0          0          0 -1,984,433   -484,013 -1,452,093

--------------------------------------------------------------------------------

Metric tons    9,818.07   9,818.07   9,818.07   9,818.07   9,879.80   9,894.85

 Daily change      0.00       0.00       0.00     -61.73     -15.05     -45.16

================================================================================

NOTE: Ounces are troy ounces.

(Bloomberg) -- Gold ETP Holdings Climb to Record for Ninth Straight Session
Amount in exchange-traded products backed by the metal rose 0.1% to 2,615.9 metric tons, data tracked by Bloomberg showed.

(Bloomberg) -- Chow Tai Fook Profit Falls Amid Hedging Losses on Gold Contracts
Chow Tai Fook Jewellery Group Ltd., a Hong Kong-based chain with more revenue than Tiffany & Co., said first-half profit fell 32 percent amid hedging losses on gold contracts

Net income dropped to HK$1.82 billion ($235 million) from HK$2.69 billion for the six months ended Sept. 30, according to a Hong Kong stock exchange filing today. That compares with the median estimate of HK$2.02 billion of four analysts surveyed by Bloomberg News.

(Bloomberg) -- Shanghai Gold Exchange to Start Interbank Gold Trading Dec. 3
Shanghai Gold Exchange will start an inter-bank gold trading system on Dec. 3 on a trial basis, the bourse said in a statement on its website today.

(Bloomberg) -- Gold Outlook Seen Bullish by Deutsche Bank on U.S. Rating Cut
The U.S. probably won’t avoid a Treasury debt downgrade, which is positive for gold, Deutsche Bank AG said.

Gold’s drop yesterday may not have been because of the U.S. fiscal cliff because growth sensitive markets such as the S&P 500 and silver that should have been hit harder didn’t fall as much as gold, Xiao Fu, an analyst at the bank in London, said in a report dated today. “This would suggest that gold was probably reacting to specific gold flow selling,” Fu said in the report. “On this basis, we would see this weakness as temporary particularly since we would view the combination of a debt downgrade and the U.S. avoiding the fiscal cliff as gold price bullish. Indeed events during August 2011 when U.S. Treasury debt was downgraded proved to be unambiguously bullish for gold prices.”

For breaking news and commentary on financial markets and gold, follow us on Twitter.

NEWS

Gold sees mild recovery after big sell-off – Market Watch

Gold inches up after sell-off; U.S. fiscal worries weigh - Reuters

Gold Rebounds on U.S. Budget Optimism, Record Investor Holdings - Bloomberg

Market attributes deflation concerns, technical selling for selloff – Market Watch

COMMENTARY

How Do the Chinese View the Gold Market? – Zero Hedge

China 2015 gold output likely 450 tons - 'Fundamental market shortage' – Market Watch

What the new Bank of England boss means for your money - MoneyWeek

The Biggest Story Of Our Lifetime - MoneyWeek

The Possibility of a Currency Collapse in Japan – Max Keiser

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GetZeeGold's picture

 

 

It only costs $5000 an ounce to keep it under $2000/oz.

 

It's called central planning.

sessinpo's picture

Conversely, to keep your thought and post logical and factual, how much does it cost to keep it over $2000/oz?

HoofHearted's picture

It costs the huge sum of LETTING MARKETS BE FREE from manipulation.

EnslavethechildrenforBen's picture

How about we all dump our GLD today and buy the physical off the shelves. They would not be able to replace it for weeks, maybe months. That would run the physical price to $10,000 an oz and the paper price to Zerohedge

caconhma's picture

Here, in America, we have a Central Planning Economy with Central Banking Mafia (CBM) at the top.

To control and manipulate the US economy, they must print money at will without creating a runaway inflation, specifically in commodities. America has a huge trade deficit importing huge amount goods and services paid by these printed US$$$. For majority of all these goods and services, US$$$ are used (like in China, Japan, etc.,) to buy commodities (oil, gas, food, copper, etc,). Consequently, Fed must rain in commodities prices; otherwise, Fed cannot print money at-will and manipulate interest rates leading to an economic collapse of the US economy.

Gold is a well known indicator of inflation. Consequently, CBM is using these printing currencies to suppress gold and commodities prices using "paper commodities market operations". It costs nothing to CBM as long as the core inflation is under control and there are no real-physical gold and physical commodities shortages.

The bad news for CBM is that the US and EU economies are becoming more and more parasitic and less and less productive making runaway inflation inevitable especially in agriculture commodities.

 

strannick's picture

 

CFTC Commisioners Bart Chilton,

Jill Sommers,

Mark Wetjen,

Scott OMalia and

Gary Gensler sit dumbly on their thumbs while markets are manipulated for banks, and collect their bureaucrat salaries for doing nothing and colluding with banks. Hows that silver investigation coming? Still waiting for more convincing evidence?

The CFTC has abbrogated their authority to CME's Jeff Christian, who does whatever his high volume bullion banks -JPMorgan and HSBC tell him.

 

tetsujin's picture

Unfortunately, free markets will always be manipulated. Because, someone out there is almost always a c*nt. We pay for the cost of freedom with manipulation

Snidley Whipsnae's picture

how much does it cost to keep it over $2000/oz?

This is a function of how much printing central banks do...

Right-on Left-off's picture

how much does it cost to keep it over $2000/oz?

The correct answer is nothing.  Doing nothing to this particular market at this time and POG would be over $2000 and continuing to float higher as if by magic.

Right-on Left-off's picture

.... and another thang the 'informed' are not mentioning.  It also took some pretty hefty buyers with mucho big bucks and meat claws to gulp this down so fast BUT who wants to hear about that.

Right-on Left-off's picture

.... Oh and yet another thang.

how much does it cost to keep it over $2000/oz?

The market would actually pay you!  It's called gains/profit. 

kliguy38's picture

Logic??? Now why would someone bring that subject into a discussion about the Central Banks' greatest threat to their fiat ponzi??? Obviously the answer is......YOU have NO gold and believe in your paper assets providing you value. gl wit dat

Bubble's picture

Please note, the previous afternoon, someone bought 23000 lots of the Jan Gold 1690puts. Yes 23,000. Very lucky indeed. Or it makes a dip in the price, if that's what you're after, rewarding on many levels.

CPL's picture

http://usdebtclock.org/gold-demand-by-country.html

 

The mined number doesn't move anymore while everyone is on strike.  Supply and demand side, just for dentistry alone should have pushed gold over the 2000 mark.

JLee2027's picture

Dentistry? So after the Great Reset, the homeless guy with Gold teeth will be richer than Donald Trump? Genius.

EnslavethechildrenforBen's picture

Good point. It may be $20,000 or more per oz...

Manthong's picture

How much does that 3.5 million ounces weigh in equivilent electrons?

JPM Hater001's picture

We tried to have MDB measure it but he was electrocuted in the process.

Still not dead.

I'll have him try again.

Winston Churchill's picture

MDB already admitted being a stacker in one candid post.Was probably drunk.

Take it ,or leave it.

Overfed's picture

Ever heard of Avagadro's Number?

Xibalba's picture

See: "My remarks today will focus on the role of central bank interactions with financial markets." -Simon Potter

JustObserving's picture

US markets are a crime not only against small investors but also against common sense. 

AU5K's picture

I like to think of it as a gold 'doorbuster' sale.

GetZeeGold's picture

 

 

Buy as much as you can.....your grandkids are paying for it.....along with a lot of other people's grandkids.

HoofHearted's picture

Actually the 35,000 contracts was me. I meant to hit BUY and actually hit SELL. Now I'm screwed. It was a stupid finger and not a fat finger. Sorry everyone. Mea culpa.

JPM Hater001's picture

Well, when you trade one paper ounce with 1 physical it's fairly net net anyway.

ClassicCommodity's picture

It's the BIS and its cronies at it again.

Eugend66's picture

You may like to read this:

http://www.bis.org/about/board.htm

The BIS is not about the USD.

Tall Tom's picture

Has anyone done a study on the correlation between volume sold and subsequent price decrease? I will bet that this is decreasing as the demand tightens. The manipulators are losing it. The squeeze is on. When it happens you will see the paper decouple from Physical. It will be fireworks. Looking forward to a CME Group DEFAULT.

Spitzer's picture

Yeah. Im getting a bit impatient...

Cant somebody just fat finger it accidentally on purpose and get it over with ?

Tall Tom's picture

Has anyone done a study on the correlation between volume sold and subsequent price decrease? I will bet that this is decreasing as the demand tightens. The manipulators are losing it. The squeeze is on. When it happens you will see the paper decouple from Physical. It will be fireworks. Looking forward to a CME Group DEFAULT.

chubbar's picture

Also looking forward to the losers from CFTC, those cocksuckers who sold their soul to the gov't and fucked over their fellow countrymen, to make their excuses for that default.

YungHungAndLegal's picture

In an attempt to protect me from myself those skatoons just shut down Intrade too.  Suprise Suprise.   Not long after their approval of SIG's new playground at Nadex.

GetZeeGold's picture

 

 

The correlation between the national debt and the POG is almost freaky.

 

It's almost like shooting fish in barrel and hunting cows.

forwardho's picture

Spot on, One of these days... the papers going to burn... And when the ashes cool you'll have no gold at all.

unwashedmass's picture

 

Oh. What a mystery. Oh. Who could have done this. Oh. 

Let's ask the CTFC. Oh. Right. They don't look at things like this. 

What a mystery this was. 

Bay of Pigs's picture

Yes, the only thing "odd" or "peculiar" are these folks at GoldCore who apparently still don't get it.

Wake up guys. This has all been explained here at ZH ad naseum for years now.

Snidley Whipsnae's picture

The CFTC don't look at it? Sure they look at it... and look at it... and look at it...

Sometimes they look at something for 4 fucking years and still don't do shit about it!

SubjectivObject's picture

Thank you Cold Gore for telling us nothing new.

_ConanTheLibertarian_'s picture

Maybe is was the CFTC itself. I mean, anything is possible these times really.

earnulf's picture

If it looks like duck, walks like a duck and quacks like a duck, it's not a fat finger!

So where exactly did all that gold pop up for purchase at?  Oh right, it's all electronic paper!

silly me, thought it was actually physical being sold instead of stop losses being triggered.

LongSoupLine's picture

the fucking CME knows exactly who and why the PM's were clown punched.

 

not only do they k.ow, those crooked fucks at CME/COMEX are in collusion.

 

and fuck you Gensler and all your CFTC fucktards for pretending to be a regulator.  just another division of Goldman...eat shit assholes.

kliguy38's picture

gotta say that is my fav post here today

deKevelioc's picture

Have to knock gold now before the Fed overtly starts expanding its balance sheet again.

youngman's picture

I was guilty...I bought some silver yesterday....could not pass up a fat finger buy .......

firstdivision's picture

Well admittedly, 3.5M oz of tungsten really is only like selling 1k oz of gold, so that drop sounds about right.

Anasteus's picture

But it's going to recover swiftly; the bargain hunters have got to work. The underlying fundamentals overall are strong, suppression effects seem to be pretty transient. Any such a bigger down-tick performed recently should be considered a godsend.