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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.

Thu, 12/06/2012 - 17:35 | 3040590 Ookspay
Ookspay's picture

Lol, sounds tasty... I carry the P229 in .40, IWB.

Wed, 12/05/2012 - 22:55 | 3038045 Ness.
Ness.'s picture

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

That isn't trading.

Thu, 12/06/2012 - 00:23 | 3038238 Orly
Orly's picture

For the people who really, really care...yes, it is.  Markets are manipulated.  They all are.  The idea is for you to forget about "fundamentals" and try to figure out what they're up to...

Thu, 12/06/2012 - 00:43 | 3038263 edb5s
edb5s's picture

They didn't trade that

Wed, 12/05/2012 - 23:15 | 3038108 Orly
Orly's picture

Former Apple owner...

?

Thu, 12/06/2012 - 09:54 | 3038934 FrankDrakman
FrankDrakman's picture

Er, I don't want to seem more than usually stupid or naive, but if you have to liquidate a large position to raise cash, wouldn't you do it slowly and when there's a lot of other trading going on, in order to maximize your return, rather than all at once in a thinly traded market, where your total take would be less?

Thu, 12/06/2012 - 13:41 | 3039678 xtop23
xtop23's picture

So rather than try to maximize the amount of money the sale generates by being intelligent in how quickly they dump, they just throw up their hands and yell, "fuck it!" to the heavens, right? 

Sorry, but that smells like bullshit to me. Obvious attempt at smashing the price and gunning some stops.

Wed, 12/05/2012 - 22:10 | 3037943 Bay of Pigs
Bay of Pigs's picture

fonz, 

I know for a fact that insideher trading/bob dabolina/darkness are all one and the same poster. Almost seems like he is only here to cause trouble on the PM threads. Best to ignore him. He's full of shit.

Wed, 12/05/2012 - 22:25 | 3037950 fonzannoon
fonzannoon's picture

okay, appreciate the heads up. Either way this was obvious. No point expanding on it.

edit - I am not down arrowing anyone on here and I have no idea who is who, nor do I really give a shit. FWIW

I did down arrow zerohead for making me put down my beer and edit my post.

Wed, 12/05/2012 - 23:16 | 3038112 Orly
Orly's picture

Flakmeister...

Wed, 12/05/2012 - 22:28 | 3037988 Insideher Trading
Insideher Trading's picture

I have a question just to see if you know the answer.

How many dollars does it take to control 200,000 ounces of gold in the futures market?

Once you figure that out, how much money does PIMCO control?

Put it in perspective for me.

Wed, 12/05/2012 - 22:48 | 3038046 fonzannoon
fonzannoon's picture

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

That is the trade ZH is discussing. As for PIMCO. How much assets do they have? I know that they have 285 billion just in their total return fund.  So what do they have in total? Not sure.....maybe a trillion?  They are owned by Allianz...so are we including them in there? So 345 million is just a drop in the bucket for PIMCO right? Sure it is. You think that a PIMCO trader dropped that trade at 1am? How is his bonus looking right about now?

You want perspective? Someone dropped that trade on purpose. They could give a fuck if it drove the price down $5 or $10. They wanted the world to wake up seeing gold in the red. You bet your ass CNBC and Bloomberg had it on their agenda to discuss the "selloff overnight" That trade was worth it just to see if it sparked more selling. Notice the title of the article was about the LATEST smackdown, not the only smackdown. This is about psychology more than it is about trading. It's been going on for weeks now. Maybe someone is sweating about QE4. I mean, it got here kind of fucking quick, no?

 

Wed, 12/05/2012 - 23:05 | 3038082 Insideher Trading
Insideher Trading's picture

$30 million in futures contracts controls 200,000 ounces of gold on the futures market.

$345 million would be the notional value (200,000 x $1,700) BUT we're talking about GCG3 (FUTURES CONTRACTS)

PIMCO has 2 TRILLION dollars in assets.

So this 'fat finger' wasn't but a pencil being thrown into a volcano.

Like I said above, this was most likely selling due to a margin call, probably due to aapl though that's just a guess.

Wed, 12/05/2012 - 23:11 | 3038102 chump666
chump666's picture

The Fonz is right,

If you look at the indexes you can see the crowded trade is currently the Dow, we have forced selling on the NASDAQ and of course gold, which really should be a safe haven i.e fiscal cliff, Europe etc etc etc.

Now, the trick is to work out where the flows will end up next, say after the Dow is sold down.  Figure that out and maybe you get to buy some good booze for the weekend.

Maybe...

Wed, 12/05/2012 - 23:25 | 3038126 Orly
Orly's picture

Oooh!  Ooooh!  Pick Me!

Ermmm. the Euro and the Aussie dollar, both relative to the US Dollar?

Climb the slope of worry to the fiscal cliff, then silde 'em all the way back down.

Way down.

Way.

:D

Oops.  Sorry.  I went all Jeopardy! on you...after and even as US equities are being sold down will be US Treasury bills, especially the 10-year.  Expect yields to drop to less than one percent. 

Buy bonds. 

:D

Wed, 12/05/2012 - 23:37 | 3038153 chump666
chump666's picture

Orly,

Now you are seeing the DXY bids last session and now?  Hmm, we could have a nice UST bid. 

 

Wed, 12/05/2012 - 23:58 | 3038194 Orly
Orly's picture

Which means to sell the USDJPY hard, as well as the SPX/ES...

I'm just not seeing it yet, though.  We work our way to the fiscal cliff, all hand-wringing and that, climbing the good ole Wall O'Worry, then the 10-year starts to move.  But only after the New Year and very, very slowly.

Remember the Fed may not go into more of the MBS market, after all.  Yields are down, mortgages are cheap and JPM and Wells have pretty much said that mortgage rates aren't getting any lower if they have their druthers.  If rates go lower, then they'll just eat the additional margin.  Thanks!

The Fed may get into other areas, such as muni bonds, etc., this time focusing on Federal Pension funds and the like.  I don't know, I'm just throwing it out there that the big banks aren't going to be getting a whole lot more free money.  It is going to be spread around to other venues.

That means the stock market will take a nice and easy, slow-leak downward from there.  I don't expect the Fed to let all of this hard work just collapse over night.

Right now, though, it's "risk-on" window dressing for the Ages!  Both EUR and AUD ramp against the dollar, to 1.36 and 1.06 respectively.  How long that would take, I have no idea but it's amazing how they were able to get APPL back in line without disrupting the whole show.  Amazing.  That tells me that there is more upside to the equity ramp, even if for just three more weeks.

Thu, 12/06/2012 - 00:29 | 3038249 chump666
chump666's picture

Good analysis, except the asset allocators (love that term) need to either hold long in an already a crowded market, using the Dow as a proxy.  Or they profit take now, maybe then to rally into new year.  It's just that the HFTs have got MA supports down to a fine art, which has suppressed volatility, yet volumes are still low.  I think, with DXY lightly bid and gold knocked lower, could be a sign that equities may take a hit end year.  Obama's sell off victory was not really a correction, 4% is nothing.  But then as you pointed out The Fed has pushed rates as low as they can go, whether they go all out bond buying on everything - making the bond markets a worthless trade, yeah, possible.  However for that, they need a crash to justify their lunacy.  So, I factor in crash, either another mini slide like in Nov, then a full blown one in 2013.

They do this, they will need to print into everything as no one will touch USTs China will be extra pissed, and rates will go up + Inflation will break out on every corner...till that day.

The signs of our times now is the Nasdaq getting slammed, S&P flat and Dow bid, EUR bid, Gold down and USD trying to find support over 80 again.  Looks tight, but if the players shift in bonds and USTs pre 31st, a profit take could get messy.

I hope so, market is expensive and I want some nice Tequila end year

Thu, 12/06/2012 - 01:16 | 3038298 boogerbently
boogerbently's picture

People were burnt, they sought the "safe haven" of USTreasuries.

The morons missed the last 3 years of stocks/commodities rocketing off the bottom.

Even now, with all the uncertainty, IF......IF you commit your money for 10+ years, it doesn't even keep up with inflation.

All the common sense arguments FOR gold are valid.....in a normal market. But how can gold be bought in such HUGE quantities and NOT raise the price ?  Manipulation.

Until THAT is removed, the future of the value of gold is as "uncertain" as the future of FB.

 

 

Wed, 12/05/2012 - 23:13 | 3038105 fonzannoon
fonzannoon's picture

I don't care if it was  PIMCO or the Etrade baby. I get your point about it being levered. The point is (or Tyler probably could give a shit) that it controlled 200,000 ounces of gold in an illiquid market. There was intent there.  The other point is that it was one of many sized trades taking place at off times in illiquid markets. Something stinks.

 

Wed, 12/05/2012 - 23:32 | 3038131 Insideher Trading
Insideher Trading's picture

JFC...

Someone had a margin call. It was probabaly FORCED selling to raise capital.

I don't know how many times I have to say this.

It's not a conspiracy....just common sense.

Seeing as many large funds hold both aapl AND gold if aapl continues it's slide expect funds to sell more liquid assets (gold) to raise capital requirements.

Simply put...I wouldn't be adding to my gold positions here.

Wed, 12/05/2012 - 23:39 | 3038152 fonzannoon
fonzannoon's picture

Bah...whatever...I'm crashing.

Wed, 12/05/2012 - 23:38 | 3038158 Karlus
Karlus's picture

Margin call before market opens? Every day?

Im not disagreeing, but just trying to understand how the mechanics of it....

Wed, 12/05/2012 - 23:40 | 3038160 chubbar
chubbar's picture

That's your argument? They couldn't take an extra 12 hours to make at least another 10% for a margin call? Or are you arguing a company with a trillion market cap was worried about a margin call on 345mil worth of positions?

You know better than anyone that the leverage is what makes the money. It may only be 30m to buy the trade but they would be giving up that much by dumping the position in the way they did.

Wed, 12/05/2012 - 23:43 | 3038169 Bay of Pigs
Bay of Pigs's picture

It has been explained here many times before, and on comments below on this very thread if he would bother to read them.

So maybe his problem isn't comprehesion at all. Maybe he has another agenda? Like disinformation and threadjacking?

Wed, 12/05/2012 - 23:57 | 3038202 Insideher Trading
Insideher Trading's picture

Weren't you the one advocating capital controls on how much gold someone could (or could not have)?

What's your agenda?

Thu, 12/06/2012 - 01:20 | 3038302 boogerbently
boogerbently's picture

1) That's WHY the gold market operates around the clock (other than the hour lunch break.)

2) All they need to do is get the algo headed their direction. ("THEY" could have gold at $1200/oz by Fri if they wanted).

Thu, 12/06/2012 - 20:47 | 3041170 xtop23
xtop23's picture

i think they're already well aware down that path is the utterly instant implosion of their shorts. if they were to dump the price to $1200/oz. the physical market would vapor lock at light speed. not likely.

Wed, 12/05/2012 - 21:32 | 3037839 Aziz
Aziz's picture

Combining HFT and Fed liquidity lines is like packing a building full of dynamite and then expecting it not to explode.

Wed, 12/05/2012 - 23:24 | 3038137 catacl1sm
catacl1sm's picture

Like WTC 7?

Wed, 12/05/2012 - 21:32 | 3037840 knukles
knukles's picture

Solution:
Global ban on Tyranny Porn

Wed, 12/05/2012 - 22:24 | 3037983 Non Passaran
Non Passaran's picture

Tyranny or tranny?

Thu, 12/06/2012 - 00:35 | 3038258 knukles
knukles's picture

OOOPS!
Ban TRANNY Porn

My mistake, not being able to tell one from another...

Thu, 12/06/2012 - 06:15 | 3038587 Dr. Sandi
Dr. Sandi's picture

End the Tranny Tyranny before Norman Bates owns our souls.

Thu, 12/06/2012 - 09:16 | 3038809 Acet
Acet's picture

So hard-core porn with blonde German Dominas wearing only old-fashioned garters and stockings, a whip and an SS hat is ok?

Not that I ever saw any ... I ... err ... know a friend whose friend once mentioned it ...

Wed, 12/05/2012 - 21:35 | 3037849 Darkness
Darkness's picture

Why is this so alarming? Just appears to be large scale selling.

Wed, 12/05/2012 - 21:40 | 3037859 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Who has $335M to sell gold and why would they?  Why would they sell gold when all Central Banks are debasing currencies ad infinum?  Do you really think it is time to sell gold in such a large quantity?  Do you really think that by February gold will be lower based on fundamentals?

Do you?!

Wed, 12/05/2012 - 21:47 | 3037881 Central Bankster
Central Bankster's picture

No, the much better question is WHY are they selling it during an illiquid period of market trading (where if they wait just a few hours, they can sell it at a better price and save millions of dollars).  The ONLY explanation is the desire to manipulate price irrespective of monetary loss.  That is the point here of this article.

Wed, 12/05/2012 - 21:56 | 3037910 Troll Magnet
Troll Magnet's picture

is it resl gold though? or just papers claiming rehypothecated tungsten? oops. i mean, gold.

Thu, 12/06/2012 - 00:32 | 3037922 Central Bankster
Central Bankster's picture

Perception is reality.  If the central banks are infact the actors here, it would be logical to assume that they hope to use paper prices to influence the perceptions of the investor community.  Its worth noting that these participants also invest in other paper markets under the pretense that these are all legitimate private party, free market sells and buys.  If this is the work of a central bank, it becomes believable because they have an interest in lower gold prices (to manage perceptions) and because they don't care about price execution.

Thu, 12/06/2012 - 06:16 | 3038589 Dr. Sandi
Dr. Sandi's picture

Of course it's paper. They don't move that amount of metal through the system in a day.

It's Monopoly Gold.

Wed, 12/05/2012 - 22:18 | 3037964 Pareto
Pareto's picture

Can I offer this:

Since gold has kind of retreated some in the last little while, and trade has been thin,  if you have $435M in gold, why not write some calls on it, write them down hard, shake out some weak longs, then cover to close on what looks to me to be an intermediate thinly traded bear market in gold?  Don't get me wrong.  I believe there is manipulation all over the place, however, would this not be a possible opportunity exercised with the help of a super fast array of sell and buy orders?  Just thinking of plausible explanations that points to something other than manipulation.  cheers

Wed, 12/05/2012 - 22:35 | 3038015 RacerX
RacerX's picture

I concur: this is the game. Simple Sell high, buy back low.

Wed, 12/05/2012 - 23:07 | 3038087 chubbar
chubbar's picture

Wouldn't that qualify as manipulation to the CFTC, assuming they gave a shit about it?

Wed, 12/05/2012 - 23:49 | 3038179 gonetogalt
gonetogalt's picture

It seems to me that what's gained in FOREX manipulation is magnitudes greater than what's given up in PM pricing by TPTB's.  ALL

PM pricing is paper manipulation bullshit.  Just keep mining.

Wed, 12/05/2012 - 21:48 | 3037882 MFLTucson
MFLTucson's picture

The answer is odviously no but, you are ignoring the evil hand guided by the evil mind of the Jewish Banking Cartel that is selling these contracts naked and want to buy phyical cheaper from weaker hands..

Wed, 12/05/2012 - 22:01 | 3037923 tbd108
tbd108's picture

Those damn Chinese Jews! They would do anything for a buck (or is it a yuan?).

Thu, 12/06/2012 - 00:21 | 3038233 MFLTucson
MFLTucson's picture

Be fooled by Kitco into believing the fanthom Chinese seller?  Shame on you fool!  Ben the criminal and the gang of Geithner, Dimon and Blankfied are fucking with your future and mine and dont give a shit if they ruin you or your family.  Follow history back to Germany's weimar district and what these people are capable of.

Wed, 12/05/2012 - 22:23 | 3037972 Non Passaran
Non Passaran's picture

What a loser.
First off you have no clue who is doing what (and as the other comment said, more likely than not it's an Asian investor). Secondly IIRC GLD can be redeemed in kind.
And most importantly, the trade was voluntary.

Wed, 12/05/2012 - 21:52 | 3037889 Harbanger
Harbanger's picture

If you had $335M in GLD, why would you sell it slowly, when you can unload all the paper at once, affect the price and then buy back phys at a bargain?  I'm just happy to see these sale prices, they won't last.

Wed, 12/05/2012 - 22:17 | 3037959 lasvegaspersona
lasvegaspersona's picture

The Euro does their MTM quarterly, they like a high gold price, makes the Euro look good. I wonder if the price will be brought low for a year end 'message to the masses'. So far in the past 11 years it has always closed higher YoY. It would have to close below 1531 however so I doubt that is in the cards.

Wed, 12/05/2012 - 22:58 | 3038061 lakecity55
lakecity55's picture

That has to be the key. Mr X buys tons and tons of paper, sells it at once swoop and has orders ready to execute buying the fizz on the resulting dip. Rinse, repeat, build up a huge pile of fizz.

Wed, 12/05/2012 - 21:52 | 3037892 Global Hunter
Global Hunter's picture

Why wouldn't the large scale seller, attempt to complete the order over a day, 24 hour period or at 9:30 am EST time so that they could get a much better price on their sales?

Wed, 12/05/2012 - 21:56 | 3037909 Central Bankster
Central Bankster's picture

Exactly.  You can tell a lot of these comments don't come from guys who trade or understand the technical implications of such a large order in an illiquid market.  They can't put themselves in the shoes of the seller, and understand how illogical such a sell order is from a market participant who cares about their principle.

Wed, 12/05/2012 - 22:18 | 3037962 Global Hunter
Global Hunter's picture

CB, I thought you a few others were trying to explain the mechanics of it well in other posts.  I'll add, that we can assume an individual or organization giving the 350mm sell order would understand how markets work as well.

Wed, 12/05/2012 - 23:37 | 3038157 Orly
Orly's picture

If I may be so bold, it was the point of Central Bankster that they had to control the perception of things, i.e., an unmitigated panic of selling that should make a lot of the Bay of Pigs crowd very nervous.

And it should make them very nervous...

These are market signals.  Kinda like Morse Code.

Wed, 12/05/2012 - 21:41 | 3037853 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Don't forget there are buy orders swooping in on these flushes.  This game goes both ways. 

Wed, 12/05/2012 - 21:46 | 3037877 DoChenRollingBearing
DoChenRollingBearing's picture

The Boyz/Bitchez have eight more days to bash gold!  Bash it boyz!  Then I too take the other side of that trade, but I will not take paper or electrons, I will buy Gold Eagles.

+ $100,000 for the great observation L H!

Wed, 12/05/2012 - 21:46 | 3037878 fonzannoon
fonzannoon's picture

You know Mr. LH there is a tiny, tiny side to me that thinks this is the biggest set up in history. At some point they turn on a dime. They tell Ben to shut off Ctl P and get religious. Interest rates take off and whoever is at the helm does a Hank Paulson. "If we don't have massive, Massive entitlement cuts across the board there will be no bread on the shelves an hour from now".  People all over the country either voluntarily or are forced to take huge cuts in entitlements and benefits. We plunge into a massive depression, but...the dollar gets spared.  Of course the bankers were short treasuries and short stocks and made bundles. We wake up the next day fully converted into a third world country.

It's a tiny fraction of a chance in my mind. But I think about it.

Wed, 12/05/2012 - 22:08 | 3037940 techstrategy
techstrategy's picture

Social stability comes first.  Those with power and privilege do not want revolution.  Cannot stop QE because impact because increased interest rates would put US into Greece's situation.  There is really only one answer that balances the flows...  I am surprised that so few seem to see it.  Everyone has been herded into max pain positions across assets, which is how I know the time is near.

Wed, 12/05/2012 - 22:26 | 3037989 A Lunatic
A Lunatic's picture

Thing is, you would not see revolution in this country, not the productive kind anyway. The kind of social upheavel we will see is that in which society fights itself along cultural, economic, ethnic and religious divisions. This will actually play right into the hands of TPTP and put the final nails in the coffin of the Great American Experiment. Watch and see...........

Wed, 12/05/2012 - 22:08 | 3037941 Calmyourself
Calmyourself's picture

There would be massive physical preps for such a scenario, security, road blocks, stockpiling emptying of major fianncial centers as word leaked.  No, this will be a long slow grind, we have years to be ground between millstones of their choosing.

Wed, 12/05/2012 - 22:18 | 3037965 fonzannoon
fonzannoon's picture

I am not saying it would happen tomorrow. But why the massive prep? There was no massive prep in '08. All you need is a few speeches on National TV explaining what "might happen" if we don't do xyz.  Look how easily it worked the first go around. Faced with the thought of armageddon people will gladly give up a lot. No one at the top will suffer one bit. If anything they will clean up. Again.

 

Wed, 12/05/2012 - 23:18 | 3038117 BooMushroom
BooMushroom's picture

The people didn't want to give up anything, public opinion was firmly against the bank bailouts. But considering that the other option was to rise up and assassinate our leaders en masse, the public acquiesced.

Wed, 12/05/2012 - 22:18 | 3037961 Karlus
Karlus's picture

I was wondering this also. It could be the Chinese are getting ready to do something that would be very bad for gold....but then, wouldnt they just smurf it in, instead of at the thinnest time? Or is it that they have so much that each day, they have a volume target to hit and dont care what price it is?

He other issue is you are trying to spook the market. If you are going to make a splash, you dont do it before the bell closes and people have the night to sleep it off, you do it at the start and it hangs like a pall on the market.

Finally, perhaps the Bernak has told GS that he is getting ready to move interest rates up. GS puts out the "buy" on gold and dumps their book to the market.

Ive not seen anything like this before and no one knows why its happening.

Thoughts...?

Wed, 12/05/2012 - 22:23 | 3037975 fonzannoon
fonzannoon's picture

I say keep it simple. You put an order like that through to drive the price down. But more importantly you drive momentum. The US wakes up with CNBS in their face talking about the selloff and how the direction has changed etc.

Wed, 12/05/2012 - 22:54 | 3038058 SmallerGovNow2
SmallerGovNow2's picture

or you are shorting paper to drive price down and buying physical?

Wed, 12/05/2012 - 22:20 | 3037968 lasvegaspersona
lasvegaspersona's picture

fonz....that is simply not the way those in charge of fiat do things. Why have riots when you can print and be loved (and re-elected!

Wed, 12/05/2012 - 22:27 | 3037996 fonzannoon
fonzannoon's picture

I hear you vegas. I don't think they will do it for fun. I think, when they finally get spooked about the possibility of hyperinflation, they will pull the plug.

Actually I don't know that they will. I just like trying to figure out what my enemy may throw at me.

Wed, 12/05/2012 - 22:54 | 3038059 chubbar
chubbar's picture

For what it's worth Fonz, I've had the same thoughts myself. One nagging issue is why are these guys going to cash/cashing out if they know it will be worth less or worthless? Are they going to gold and keeping the price controlled via derivatives and/or papergold products/trading? No way will these fuckers get left behind, no way. Too many of the assholes know where the bodies are buried.

One of the arguments I use for the other side is that the world doesn't revolve around the dollar. I mean it does now in some respects but the Brics and Europe don't have to use the dollar and there are many indications that they are moving quickly away from the dollar. If the elites pulled the scenario you describe, the U.S. would default almost immediately. Would that result in a stronger dollar and weaker gold price? I don't think so. Again, no easy answers since everything is so opaque. Perhaps they could bifurcate the issue by having a domestic dollar and an international dollar/exchange rate? Hard to say but I'll tell you that it keeps me up at nights. My guess it that they are going to gold but I know that I don't know that for sure. I do know that gold won't go to zero, the dollar might. That's all I can hang my hat on.

Wed, 12/05/2012 - 23:00 | 3038070 fonzannoon
fonzannoon's picture

It's a great point. I wonder if we would default on ourselves and try to keep our international promises so we keep reserve status. But I get so far down this rabbit hole I don't know which way is up anymore.

Wed, 12/05/2012 - 23:10 | 3038099 chubbar
chubbar's picture

Yeah, no kidding. Get in line.

Wed, 12/05/2012 - 23:25 | 3038139 logicalman
logicalman's picture

The 'elites' don't give a fuck about country.

Countries are there to divide and conqour, nothing more or less.

The elites of almost every country are all in it together to sit back and enjoy the fruits of the efforts of the sheople.

FUCK 'EM

 

Wed, 12/05/2012 - 21:46 | 3037875 Cognitive Dissonance
Cognitive Dissonance's picture

"Nothing to see here folks. Much ado about nothing. Move along." - Ben Bernanke

Wed, 12/05/2012 - 21:46 | 3037876 Samsonov
Samsonov's picture

I keep trying to understand.  I just can't see why a $10 move on a $1700 item is something to get exercised about.  I also can't see why it's a problem for a willing buyer and willing seller to deal at a price that's different than it was a moment ago.  But I'll keep trying.

Wed, 12/05/2012 - 21:47 | 3037883 fonzannoon
fonzannoon's picture

Why execute that large an order in such a thinly traded market unless you wanted to drive the price down?

Wed, 12/05/2012 - 21:54 | 3037891 Central Bankster
Central Bankster's picture

Exactly.  The reason why a $10 move on a $1700 commodity is important is that the trade has a $345 million dollar notional value.  So put yourself in the seller's shoes and try to understand why would someone sell it in such a manner that it costs them millions of dollars when it moves .5% - 1% down on their sell order, when they could have sold it more slowly and gotten better execution.  The only explanation is that the seller does not care about price received (and lost $$$), and only cares about moving the price lower.

Wed, 12/05/2012 - 21:55 | 3037906 Samsonov
Samsonov's picture

The price bounced right back, though, didn't it?  So this seller who took a lower price didn't really move the markets at all.  I see no shenanigans.  I see no victims.

Wed, 12/05/2012 - 21:57 | 3037912 Central Bankster
Central Bankster's picture

Incorrect.  Your assumptions are all wrong and that is why you draw the wrong conclusion.

Wed, 12/05/2012 - 22:58 | 3038065 SmallerGovNow2
SmallerGovNow2's picture

Think paper play for physical....

Wed, 12/05/2012 - 23:53 | 3038195 exartizo
exartizo's picture

Samsonov:

CB is right.

But your point is well taken.

Gold did "bounce right back"

One of the reasons the Central Bankers in various guises manipulate gold is to gauge market response.

How quickly does gold bounce back?

Does it bounce back?

Questions the central bankers want to know to gauge how their manipulation of the gold and silver markets are impacting the market as a whole and other players.

The suppression of real gold and silver value and price by the banksters is well known.

They have motive and ability, also well known.

The real question is when does the music stop and who will be "on top" when it does?

Wed, 12/05/2012 - 21:47 | 3037880 The Shootist
The Shootist's picture

Nothing to see here folks, you'll never see any politician in power talk about gold anyhow.

Wed, 12/05/2012 - 21:50 | 3037885 MFLTucson
MFLTucson's picture

This whole sytem is a disgusting fraud.

Wed, 12/05/2012 - 21:54 | 3037901 Joebloinvestor
Joebloinvestor's picture

They will blow up the paper gold market before admitting the FIAT system is crashing and burning.

Wed, 12/05/2012 - 21:54 | 3037902 Joebloinvestor
Joebloinvestor's picture

They will blow up the paper gold market before admitting the FIAT system is crashing and burning.

Wed, 12/05/2012 - 22:01 | 3037921 Segestan
Segestan's picture

Twilight Zone??  How about the ' Outer Limits' ......... http://www.youtube.com/watch?v=8CtjhWhw2I8

Wed, 12/05/2012 - 22:14 | 3037949 chump666
chump666's picture

Gold is always gamed so that players are forced out of safe havens and into equities, has been happening for such a long time in markets - even before the rise of the machines.  Just look at the market now, Nasdaq sinks, Dow rises (now an almost 100% bull proxy leaving the S&P for dead).

What the machines do now is they can distort quicker and cause momentum trades into stocks at a rapid rate. Early consultants of Algo's systems where old school gamers ala open out cry guys.

Anyway DXY is bid...

 

Wed, 12/05/2012 - 22:14 | 3037951 LongSoupLine
LongSoupLine's picture

it's not a gold smack down, it's a paper smack down.

 

my physical has not changed at all after the whole event.

 

fuck you algo scum.

Wed, 12/05/2012 - 23:00 | 3038071 SmallerGovNow2
SmallerGovNow2's picture

bingo LSL....

Wed, 12/05/2012 - 22:15 | 3037955 seek
seek's picture

I fucking knew it! I've been saying for the last six weeks or so I was seeing something that looked way too much like HFT. These charts prove it -- thanks Nanex!

At least they can't screw with the phyzz, but I think we should be prepared for HFT insanity in the gold market now too.

Of course unlike the other markets, the intent will be to drive it down as much as possible.

Wed, 12/05/2012 - 22:26 | 3037992 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1 and + 1

I always look forward to reading what you write, seek.

Wed, 12/05/2012 - 22:19 | 3037966 Venerability
Venerability's picture

I honestly don't think Anybody Anywhere cares about the Trading itself anymore.

What is getting truly obnoxious is the Propaganda By Rote connected with the Trading.

You look back to the last few times they staged the exact same scenario with the PM indices - i.e. early November last year (it was delayed this year because of the election), then early June, then early August - and the entire load of Propaganda has been more or less directly recycled this time! They are no longer even attempting to spout or print anything original.

Guru One says this. Guru two counters with that. Guru Three says Nay to both of them. Fast Ninnies Parry. Princess Dennis sweats. Tiny Terror waves his tiny arms. Yahoo Finance prints Obituaries of people. And now Seeking Alpha, which made a Deal with the Devil, clearly, in return for better SEO placement, allows all the longtime Poster Bots from Yahoo Finance to suddenly appear bearing very loud and very silly BOO!s.

Does anyone truly think these campaigns still garner them more than rolling eyes, tummyaches, and shoes thrown at computer terminals?

Sheeple who were fleece-able are just no longer part of the Market! And the financial services industry can't summon up any brand-new Muppets to replace them because entire generations of potential customers are either too poor to invest or too wary of the horror tales they've heard.

Smart industries don't scare off their customers. They don't cannibalize their customers. They don't harass their customers on a regular basis.

Of course, "smart" and "the financial services industry" have not been synonymous for quite some time.

 

Wed, 12/05/2012 - 23:19 | 3038120 RedMeansGo
RedMeansGo's picture

You are correct.  Even the Yankees understand they need the cellar dwellers or there is no game to play.

Thu, 12/06/2012 - 02:29 | 3038413 newengland
newengland's picture

I am a Yankee.

I'm sorry for your troubles...your troubles, not ours. Take that to your bank or politico whore.

We Yankees have true community. Good luck to you and yours. You will need luck. 

If the banks burned tomorrow, if the there was no electricity, if there was no government...we Yankees will live with our neighbors, and be glad for it, no matter what happens. This is our way.

 

 

Thu, 12/06/2012 - 07:38 | 3038654 Orly
Orly's picture

Ermmm...he's talking about the baseball team?

Wed, 12/05/2012 - 22:23 | 3037978 PLove
PLove's picture

Effect before cause.

Effect before cause.

 

Tesla would've made a great gold trader.

 

 

Wed, 12/05/2012 - 22:31 | 3038000 devo
devo's picture

This is the end, my only friend, the end.

Wed, 12/05/2012 - 22:46 | 3038042 lakecity55
lakecity55's picture

yeah, something is fixin' to hit. Too much graphing goin' on.

Wed, 12/05/2012 - 22:37 | 3038014 newengland
newengland's picture

Inbred insane Goldman Sacks would talk up a corpse if it earned them a shekel or bury a live body if it ...

Hang on....is that Blankfein, Corzine,  Jamie Dimon, the pall bearers, carting off more 'muppets' ?

Psychos never change their ways. Seller beware.

Respect to Nanex and ZH.

You can give someone facts. You cannot give them good judgement.

Wed, 12/05/2012 - 22:54 | 3038055 alfred b.
alfred b.'s picture

 

     Desparation calling JPM!

 

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