A Millisecond Analysis Of The Latest Gold Smackdown

Tyler Durden's picture




 

On December 4th, 2012 at 47 minutes and 13.1 seconds after midnight, 2,035 February Gold Futures contracts GCG3 took the market down $10 as fast as the exchange could execute the order. This invisible hand that decided that that was the perfect time to execute a trade for over 200,000 ounces and $345mm notional of gold is exposed in oh-so-visible a manner by Nanex's eagle-eyed millisecond-by-millisecond charts below. As the day wore on, there were more of these sudden 'unexplained' price moves. Cue 'Twilight Zone' music...

 

Via Nanex:

1. 30 Second interval chart showing trades for the first 9 hours of trading in the February 2013 Gold Futures Contract (GC.G13). The midnight crush in the first drop on the left.

 

2. Zoom of chart above showing about 45 seconds of time. Thin gray line is quote spread.

 

3. Using a 1 millisecond interval to zoom in on one second of time. The trades are the squares. The Bid/Offer is the dark gray shading. When trades first execute, then the quote follows, it's because the entire book was swept.

 

4. Later than morning at 3:45:05 Eastern time, a jolt to the upside.

 

5. Later that morning between 8:36 and 8:40am Eastern, more sudden buying and selling events took place. The chart below is an overview of these events.

 

6. Zoom of Chart 5 showing first event.

 

7. Zoom of Chart 5 showing second event.

 

8. Zoom of Chart 5 showing third event.

 

9. Zoom of Chart 7 above showing 1 second of time.

 

Source: Nanex

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Wed, 12/05/2012 - 21:29 | 3037832 Anne Ominous
Anne Ominous's picture

Mano E Nano

Wed, 12/05/2012 - 21:34 | 3037843 DoChenRollingBearing
DoChenRollingBearing's picture

Physical gold, now more than ever, is all you need.  And once your gold pile starts building up, such markets shenanigans will not bother you.

Think of a smackdown as a buying opportunity.  I buy when I have money come in (as well as when I am the the USSA, I am now in Peru).

Wed, 12/05/2012 - 21:36 | 3037851 tsx500
tsx500's picture

Where is Jon Corzine ?

Wed, 12/05/2012 - 21:42 | 3037869 DoChenRollingBearing
DoChenRollingBearing's picture

¿Quien es Jon Corzine?

Wed, 12/05/2012 - 21:52 | 3037893 Bullwinkle Moose
Bullwinkle Moose's picture

el gran cieso

Wed, 12/05/2012 - 22:40 | 3038028 smlbizman
smlbizman's picture

the current bids and pricing on ebay is really strong...2012 proof..80+...1 oz j&m bars 41+....all ozs 39. min......is it christmas shopping? is it cashed out ira and 401's ? i dont know whats behind it but the pricing wave has increased since yesterday even in the face of this asskicking at the comex....

Wed, 12/05/2012 - 23:08 | 3038073 Supernova Born
Supernova Born's picture

The sun will rise and burn these vampires to ash.

If not, truth or consequences, and internal instability in one of the big nuclear armed countries will lead to the "big one".

Different heat source, same ash.

Wed, 12/05/2012 - 23:16 | 3038115 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1 for great moniker.  Au was born in supernovae as well, but you knew that...

Wed, 12/05/2012 - 23:19 | 3038119 RockyRacoon
RockyRacoon's picture

Here's an interesting read on the history of gold as money and... well, whatever it seems to be now.

http://www.nakedcapitalism.com/2012/12/satyajit-das-lage-dor-part-1-a-ba...

Wed, 12/05/2012 - 23:24 | 3038130 Pinto Currency
Pinto Currency's picture

 

What else can we expect with a pervert like Geithner running treasury and with control over the Exchange Stabilization Fund.

The bankers simply ask him kindly to act and it's done.

Wed, 12/05/2012 - 23:23 | 3038135 Alpo for Granny
Alpo for Granny's picture

Nanex=turrorists. 

Smithers...release the drones!

*rubs hands together*

Thu, 12/06/2012 - 02:04 | 3038383 strannick
strannick's picture

Not to worry. The CFTC is monitoring events to ensure corruption and manipulation dont occur.

Then again, maybe CFTC Commisioners Jill Sommers, Scott OMalia, Bart Chilton, Gary Gensler and Mark Wetjen ARE the problem.

Thu, 12/06/2012 - 07:18 | 3038630 GetZeeGold
GetZeeGold's picture

 

 

Gone in 60 nanoseconds.....

Wed, 12/05/2012 - 23:03 | 3038076 12ToothAssassin
12ToothAssassin's picture

Shuzbut

Wed, 12/05/2012 - 23:00 | 3038067 FL_Conservative
FL_Conservative's picture

Uganda no es John Corzine.

Wed, 12/05/2012 - 23:41 | 3038165 caconhma
caconhma's picture

It was a pure Central Bank (FED or ECB) operation:

  • Nobody has $345M laying around for "paper gold" price manipulation games. Obviously, no physical gold was involved in this transaction
  • The obvious purpose was to drive gold prices down regardless of financial consequences unless Central Banks are buying physical gold in billions dollars using a temporary created gold price weaknesses
  • It appears we are in at least in 10th gold play inning

 

Thu, 12/06/2012 - 06:14 | 3038584 Dr. Sandi
Dr. Sandi's picture

How about if the usual suspects are cramming the gold price down to scare off the hedge funds, who have once again apparently started gathering gold.

Spook them low, grab the gold, then let the price go back up to the previous resistance level.

Thu, 12/06/2012 - 11:16 | 3039212 fockewulf190
fockewulf190's picture

I think it´s more than just scaring the hedgefunds, it´s scaring the retail investor as well...at all costs.   It has been said before, if everyone within the US alone would purchase just 1oz. of physical silver per year, the game would be up.

The FED needs to keep the sheep dummed up, afraid, and maintaining a steady diat of paper fiat.  It is stopping at nothing to make Phyzz as unpalatable as possible.  It is already fighting a losing battle against the Phyzz loving Chinese, who lost their taste for western fiat long ago.  Now that China has opened up it´s own golden resturaunt over in Shanghai, and inviting the world to dinner, things are getting desperate.

Keep stacking for as long as you can.  Oriental food will keep you heathly.

Wed, 12/05/2012 - 21:53 | 3037898 Troll Magnet
Troll Magnet's picture

in bed with michelle obama?
ew. that's gross.

Wed, 12/05/2012 - 21:59 | 3037918 DoChenRollingBearing
DoChenRollingBearing's picture

Hmm.  Two grosses do not make a beauty...

+ 1, or should I have given you a minus one?

Wed, 12/05/2012 - 22:03 | 3037927 Troll Magnet
Troll Magnet's picture

i'd give me a -1.

Wed, 12/05/2012 - 22:33 | 3038006 DoChenRollingBearing
DoChenRollingBearing's picture

Your original comment was so gross, I´ll give you another + 1.  I´ll let the others downtick ya...   ;)

Wed, 12/05/2012 - 22:49 | 3038047 saturn
saturn's picture

I shall thwart the downticker's effort.

Thu, 12/06/2012 - 06:10 | 3038583 Dr. Sandi
Dr. Sandi's picture

 

Two grosses do not make a beauty...

Two grosses make 288 uglies...

Wed, 12/05/2012 - 21:54 | 3037900 Enslavethechild...
EnslavethechildrenforBen's picture

un hijo de la chingada

Thu, 12/06/2012 - 01:40 | 3038328 JOYFUL
JOYFUL's picture

hijo de la gran chingastre

Thu, 12/06/2012 - 10:22 | 3039022 Peachfuzz
Peachfuzz's picture

Es una Chupacabra de Oro.

Thu, 12/06/2012 - 10:34 | 3039053 L_Conquistador
L_Conquistador's picture

Es un bandito.

Wed, 12/05/2012 - 23:04 | 3038078 lakecity55
lakecity55's picture

+10. The answer to our conundrum is to simply.....

Keep Stackin!

 

 

Thu, 12/06/2012 - 01:14 | 3038295 MrButtoMcFarty
MrButtoMcFarty's picture

I scored 300 mercury dimes at spot today.

Cheers Bitchez!

Thu, 12/06/2012 - 07:51 | 3038668 SilverDOG
SilverDOG's picture

DoChenRollingBearing,

 

"is all you need"

Good god, have you become mentally disabled?

The ramifications of such a selective approach, are immense.

No matter where you choose to be.

Go back to PMBug land of dreamers.


Thu, 12/06/2012 - 10:45 | 3039068 DoChenRollingBearing
DoChenRollingBearing's picture

 SilverDOG

This is a gold thread.  Obviously I am diversified, including lots of silver, platinum and lead.  Stocks too, real estate and a small bearing business.  I guess you have not been following me and my comments.

Gold is a good diversification.  Only 1% actually DO own investment gold.   Perhaps you are in the angry 99% who do not?  And that has made you angry (a sign of fear)?  Do tell...

Thu, 12/06/2012 - 19:11 | 3039834 SilverDOG
SilverDOG's picture

 

 

 

I could care less about your diversification. 

I do not follow anyone, as I have no need thereof. How arrogant you are.

I admonish you, for your assumptions.

Literal reading of your comment, states what about gold and need?

Anger is not practiced, or utilized as accusatory defense. How juvenile.

 

Wed, 12/05/2012 - 22:36 | 3038019 zorba THE GREEK
zorba THE GREEK's picture

when they run out of other peoples' gold to short this market,

gold will blast off and paper gold holders can use their paper gold

to wipe their ....

Wed, 12/05/2012 - 22:45 | 3038040 Jam Akin
Jam Akin's picture

glasses?

Wed, 12/05/2012 - 21:30 | 3037834 Insideher Trading
Insideher Trading's picture

Looks like kittens got on the keyboard with MSFT paint up again.

Can you explain this shit or what?

 

Wed, 12/05/2012 - 21:39 | 3037863 fonzannoon
fonzannoon's picture

a 200k ounce sell order at 1am. It's just a big middle finger. More to come.

Wed, 12/05/2012 - 21:58 | 3037908 Insideher Trading
Insideher Trading's picture

So....someone sold gold. It was a futures position so it was levered to begin with (at one point pushing the price of gold up)

That's it?

Wed, 12/05/2012 - 21:59 | 3037917 fonzannoon
fonzannoon's picture

come on. I follow your posts. You know your shit. I am not going to make pretent you don't. That trade was done with intent.

Wed, 12/05/2012 - 22:14 | 3037942 Insideher Trading
Insideher Trading's picture

Normally trades are done with intent...that's the point of trading.

It seems to me someone (or entity) had a huge gold position they wanted to (or had to) sell.

I suppose the contract in question was the GCG3 which are the February 2013 contracts. Someone feels that gold will be lower by February 2013 and with conviction.

The position was levered to begin with which is why Tyler bolded the notional value.

This most likely was the result of a margin call.

Wed, 12/05/2012 - 22:19 | 3037967 Zer0head
Zer0head's picture

whoever is >-arrowing insideher please identify yourselves

 

Wed, 12/05/2012 - 23:41 | 3038161 RockyRacoon
RockyRacoon's picture

There.  That'll learn ya.  Git back in that there hole, boy.

ZerOhead describes my love life for the last 10 years.... sigh.

Thu, 12/06/2012 - 07:20 | 3038634 GetZeeGold
GetZeeGold's picture

 

 

whoever is >-arrowing insideher please identify yourselves

 

Bond....James Bond.

Thu, 12/06/2012 - 18:33 | 3040767 Stares straight...
Stares straight ahead's picture

I am Spartacus!

(But I did not arrow ye.)

Wed, 12/05/2012 - 22:27 | 3037994 boogerbently
boogerbently's picture

Moving the market $1 at a time, one second at a time.

Lucky they didn't do it 1000 more times, the price of gold would be $600/oz !

Wed, 12/05/2012 - 23:09 | 3038093 Ookspay
Ookspay's picture

Those who buy and trade Gold as an investment live and die on every tick. But those of us who hold it as security and the penultimate hedge instrument sleep like babies.

Wed, 12/05/2012 - 23:26 | 3038140 aphlaque_duck
aphlaque_duck's picture

What is the ultimate?

Thu, 12/06/2012 - 00:19 | 3038237 i_fly_me
Thu, 12/06/2012 - 08:49 | 3038746 Ookspay
Ookspay's picture

Lol... The ultimate is different for everyone; in my case it's Sig Sauer, Heineken and Jesus, not neccessarily in that order.

Thu, 12/06/2012 - 13:31 | 3039654 xtop23
xtop23's picture

boooo. Heineken......... change that to a Samuel Smith Chocolate Stout and a big bowl of Vanilla Bean Dreyers ice cream and then you're cookin' with gasoline.

P.S. the P220 is a pretty solid 45 ill give ya that.

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