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In The Strange Case Of Gold's Regular Morning Mugging

Tyler Durden's picture


Submitted by Adam Taggart of Peak Prosperity blog,

Not everyone is a morning person. And few people like Mondays.

But if you're a precious metals investor, mornings especially Mondays are brutal.

The Evidence

The precious metals are routinely sold off at or soon after the 8:20am EST morning open of the New York NYMEX exchange.

Below are the daily gold price charts (source: Kitco) for each Monday (or Tuesday, if Monday was a holiday) since early this year. The current day's gold price is noted by the bright green line. The morning takedown is highlighted by the orange oval.

Monday, January 7

Gold is taken down $10 immediately after the 8am NYMEX open

Monday, January 14

A late breaking rally begun on the London exchange is quickly contained at the NYMEX open, and then beaten down nearly $10. Notice that the previous Friday's gold price action (the bright blue line) also showed the same behavior at the same time, but with an even more severe response once the NYMEX opened.

Monday, January 21

The 8am sell-off is smaller here (only a few $), but still noticeable.

Monday, January 28

Again, a sell-off happens after the 8am open. Note again how the previous Friday's action was similar, but even more severe.

Monday, February 4

Finally, an outlier. While there was an initial dip in the first hour of the NYMEX, the price took off soon after. So let's not count this one.

Monday, February 11

An immediate $14 drop at the 8am open. The downward momentum started in London, but the vertical downdraft once the NYMEX opened is unmistakable.

Tuesday, February 19

While less sharp, the steady selling clearly begins at 8am, beating gold down $12 to the technically significant $1,600 threshold.

Volume & Timing

Running the above data by Chris, he noted two additional observations.

The first is that the price suppression is commencing increasingly in advance of the start of the NYMEX's open outcry process at 8:20am EST (i.e., how trading happens at the NYMEX). This suggests that it's being done on behalf of powerful players granted permission to circumvent the rules.

The second is that the volume levels in this pre-open trading is similar to that seen during active hours. That is very unusual in markets, and exceptionally high.


For those wondering, the daily price charts for silver indicate measurably similar action during these gold takedowns. Not in exact lockstep, but directionally similar both in degree and timing.

[Update: after initially writing this, I noticed Zero Hedge posted a related analysis today of the takedowns in silver for the month of February so far. Like gold, the selling is concentrated in the first few hours of the day on the NYMEX]

...they appear to be strangely collected in a brief four hour window at the start of the day... the black line is the average of the day's performance in February across the dates selected.

Charts: Bloomberg

The Conundrum

It's hard to swallow that these charts are evidence of a free and efficient market. Otherwise, a pattern this predictable would be quickly removed as traders and HFT algos piled in to a "sure" bet. 

Instead, this is behavior one would expect to see if powerful interests wanted to suppress the price of gold: hit the price hard and early at the start of the trading week to prevent the price from building upward momentum, as well as to make capital think twice before entering the gold market.

Who is doing this selling at the market open? Is it TBTF ("too big to fail") banks making profit on large short positions? Is it the Fed, through proxies, keeping the gold price contained so as not to signal how badly QE is devaluing the dollar? Allegations swarm across the Internet that it's one of these or both. But we don't know for certain. The exchanges don't make that information available to the public.

But while these charts above are not enough evidence to prove that the gold price is being manipulated, they sure exhibit the symptoms one would expect to see if it is.

So, the big question is: if the precious metals market is being manipulated, is it wise to be in it?

History is littered with the bodies of investors whose investment thesis was right, but whose timing was wrong. Even though precious metals investors may be correct in their fundamental rationale for buying gold, can the precious metals markets remain held in check (or driven further down) for long enough that it's not worth the risk of owning the metals at all right now?

The Decision

As I laid out in Time To Choose, investors are facing a junction where they need to make a decision. Since rising markets and fiscal policy have divorced themselves from fundamentals, the gap between "what is" and "what should be" is widening. The weighting of your capital allocation needs to be based on which side you see winning out here.

From our perspective here at Peak Prosperity, for all of the reasons explored in the Crash Course and discussed here daily, we firmly believe that fundamentals will ultimately matter most. And when they fully express themselves, there will be a tremendous re-pricing of assets largely higher for tangible assets that require energy to obtain, and markedly lower for paper claims on wealth (stocks, bonds, and their derivatives).

But as we've often said, the corrective process may very well take much longer than we ever expected to arrive. Frankly, we're amazed that the system has held together so well over the past 5 years with all of the thin-air money printing, trillion-dollar deficits, and $100 oil. If you are playing to the fundamentals, as we are, you need to be eyes-wide-open that you may be frustrated for far longer than you'd like to be.

So, if you decide to bet on the continued success of the status quo, your choices are easy: Get in the paper markets and go long. The Fed will be adding $85 billion of liquidity rocket fuel each month for the rest of the year to push the prices of your paper investments even higher.

But if you choose the fundamentals, here are a few important guidelines to keep in mind:

  • Build your core position in allocated (or better, personally held) physical bullion. It will never go to $0, you've removed or minimized counter-party risk, it can't be rehypothecated, and is often the most anonymous way to acquire PMs.
  • If you invest in "paper" gold, do it with money you can afford to lose. Risks of all sorts (price manipulation, counter-party risks, market shortages, rule changes, trackability, etc.) are all much higher. Read the prospectuses carefully, and make sure to only invest in those funds that fully back their shares with bullion (vs. futures contracts).
  • Don't use leverage. Don't let your enthusiasm make you vulnerable. Many leveraged ETFs lose money over time due to transaction costs even if the metals rise. And when the markets stay flat for prolonged times or worse, go down they can be widowmakers.

A Time to 'Hold Fast'

It's only human to have your confidence shaken when the market acts so completely differently than you think it should for so prolonged a time. Chris and I feel the same pain, both constitutionally as well as in our wallets, as much of our net worth is invested in the PMs.

But every time we go through the exercise of challenging our assumptions, we walk away feeling certain that our charted course is the correct one and that at some point, fundamentals will prevail.

As for what those fundamentals are, there's a seminal piece Chris wrote back in 2011 called The Screaming Fundamentals for Owning Gold and Silver that is even more true today. I highly recommend revisiting it.

Chris has mentioned many times that this market feels an awful lot like 2007, when asset prices powered ever higher month after month, even though the underlying data was deteriorating fast. As then, he sees a high and rising potential for a violent correction that will take the market by surprise and vaporize a lot of wealth before players are able to react.

It's times like these when you need to have the courage of your convictions and hold fast to whatever course of action you have decided upon after careful, considered analysis. During these trying periods, it's helpful to converse with a community of like-minded thinkers who can help remind you of the facts underlying your rationale which is why I recommend joining's Gold & Silver Group if you own PMs. It's a great source of both informational and emotional support. 

Chris and I will continue to closely track the developments in the precious metals markets and report back on any material changes to our outlook as they develop. In the meantime, we'll be holding fast. We hope you'll be doing the same, too.

(click on image if in need of dramatic inspiration)


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Wed, 02/20/2013 - 21:53 | 3261899 HomeBrewPrepper
HomeBrewPrepper's picture

The opportunity I've been waiting for...lower pm prices. The rest of my silver went down with my boat in that horrific accident. Couldn't even find an anchor... Damn

Wed, 02/20/2013 - 22:02 | 3261927 SafelyGraze
Wed, 02/20/2013 - 22:03 | 3261933 SafelyGraze
Wed, 02/20/2013 - 22:11 | 3261944 Pladizow
Pladizow's picture

Once is happenstance, twice is coincidence, but three times is enemy action.” – Ian Flemming, Creator of James Bond

Wed, 02/20/2013 - 22:37 | 3262002 tickhound
tickhound's picture

But by the fourth time it has been repeated enough, becomes a lie big enough, that people come to believe it as truth... Serf Gospel.


Wed, 02/20/2013 - 22:44 | 3262023 BLOTTO
BLOTTO's picture

In summary, nothing has changed.


In fact, its worse...but not as bad as tomorrow.


Wed, 02/20/2013 - 22:50 | 3262032 tickhound
tickhound's picture

Exactly.  Everyday is better than the next.

Wed, 02/20/2013 - 23:11 | 3262060 nope-1004
nope-1004's picture

The last few months has been an OI battle against contract holders in the silver Comex.  Holders haven't been pitching their contracts when these slams occur, rather, they have been adding to them.  Watch over the next couple of weeks as conditions are becoming tenuous.  You saw price fall today, but looks are deceiving.  There is a major problem behind the scenes.  I wouldn't sell - period.


Wed, 02/20/2013 - 23:16 | 3262108 Clowns on Acid
Clowns on Acid's picture what are you sayin'?

Wed, 02/20/2013 - 23:21 | 3262121 nope-1004
nope-1004's picture

Sorry, should have clarified that it is just my opinion.

Wed, 02/20/2013 - 23:46 | 3262192 Lord Of Finance
Lord Of Finance's picture

That opinion is more then valid. Goldman made the call to be a seller partly based on that. It will be a rough winters end, but gold shoots will come. 


   And I would like to see more selling. The gold bull is noway finished. Heck. We should all be hoping for it to drop below 1,500. Great buying opportunity and a good deal too. Hope silver falls to 26. Would be a good time to go to the junk silver depot and restack.

Thu, 02/21/2013 - 01:42 | 3262377 knukles
knukles's picture

'Bout fuckin' time somebody besides me references this shit.... been going on for years.
Early morning raids, sales in size in illiquid markets offshore...
None of which would be done by a commercial entity as they're way too sloppy...

Meant to be sloppy, seen, heard, noticed to make a big loud mean message to the rest of the world.
Not commercial dealings.

Been going on for a long time, me buckos...

Thu, 02/21/2013 - 01:54 | 3262392 TruthInSunshine
TruthInSunshine's picture

I believe that sugar is a major cause or contributing factor to even more diseases & adverse health impacts than officially acknowledged (diabetes, metabolic syndrome, insulin resistance, inflammatory conditions, c-reactive protein inducor-- even heart disease [[dietary fats, even of the saturated form, are less harmful to the heart and cardiovascular system than sugar, based on many credible studies]] and cancer), and have severely limited my own consumption of it.

I also believe people should generally have the freedom to flap their arms wildly like a bird in flight, if they're so inclined, as long as they don't hit anyone else in the face while doing so.

Thu, 02/21/2013 - 02:46 | 3262420 Dr Paul Krugman
Dr Paul Krugman's picture

Funny that anyone would think this is 'somebody' out there who wants to manipulate the system when the system is highly governed by judicial bodies such as FINRA, the SEC, and the Fed.

Maybe it isn't manipulation.  Maybe investors have had enough of holding onto an investment that doesn't pay dividends and has no growth.

Investing in gold is like putting rocks in your pants and then going for a swim.  Why would you do that?  I don't know.

In fact, it takes money out of good investments and puts them into bad investments - that can hurt finance.  Really, we may want to outlaw owning gold due to the fact that owning gold hurts the economy.

Thu, 02/21/2013 - 03:00 | 3262456 TruthInSunshine
TruthInSunshine's picture

+1 from me.

For those who don't know our Dr. PK -- think truly good, very sublime snark. It's highly refined. It's really an art form elevated.

Thu, 02/21/2013 - 03:32 | 3262477 Popo
Popo's picture

The joke is actually on the gold-manipulators.   China's buying accelerates when the price goes down.

Does anyone know how to say, "Thanks for the cheap gold, assholes?" in Mandarin?

Thu, 02/21/2013 - 05:07 | 3262515 Zwelgje
Zwelgje's picture


Thu, 02/21/2013 - 07:28 | 3262552 GetZeeGold
GetZeeGold's picture





While my paper dollars gently scream.

My PMs sit in my sock drawer and hardly notice.

I just consider myself fortunate that I've not had to except any IOUs.

Go hypothecate someone else's stash.

Thu, 02/21/2013 - 11:11 | 3263200 BigJim
BigJim's picture

 ...But every time we go through the exercise of challenging our assumptions, we walk away feeling certain that our charted course is the correct one and that at some point, fundamentals will prevail...

The problem is, that the fundamentals are not written in stone. You know and I know the dollar is ultimately fucked, but the 'price' of gold (like anything else) is principally determined by how much demand there is for it... and if enough people begin to think of gold as a volatile commodity, then demand for it as a safe haven or as money will drop.

When I see the shenanigans in the paper markets, I don't just see the the banksters trying to suppress price - I see them desperately doing all they can to change the perception of value in the psyches of the entire world.

If they succeed we're fucked. Let's hope they don't.

Thu, 02/21/2013 - 07:03 | 3262560 Cortez the Killer
Cortez the Killer's picture

it continues to amaze me that gold bugs dont see that the manipulator is likely china or russia (or whomever else is accumulating gold in size)

Yes, they prob have hired JPM, or GS to run short contracts into the system.

Plus the commercials are also doing the bidding of the US Govt via the exchange stabilization fund.

Ask yourselves this question; if you were a buyer in size, like russia or china wouldnt it be in your interest to keep the prices low?

Thu, 02/21/2013 - 07:38 | 3262573 negative rates
negative rates's picture

I tracked it down to the Brits selling phy silver, supply and demand thing absorbed by mice.

Thu, 02/21/2013 - 10:22 | 3263016 GeezerGeek
GeezerGeek's picture

Perhaps the prices are driven down by Chinese cyberwarriors pretending to be working via the NYMEX. 

Thu, 02/21/2013 - 19:41 | 3265265 Lord Koos
Lord Koos's picture

It's "Xie-xie, piyan"... 

Have you ever considered that this is all part of the plan?  Making sure that Russia and China have plenty of time to increase their holdings, since both countries have a long way to go to catch up to the USA in terms of gold reserves.  Allowing the BRICs to accumulate gold for now may help to avoid war later. Just a thought.  These fuckers are greedy but they aren't stupid.

Thu, 02/21/2013 - 06:54 | 3262551 JOYFUL
JOYFUL's picture

...Investing in gold is like putting rocks in your pants and then going for a swim. Why would you do that? I don't know...


when I put goldyrocks in mis pantalones girls ask me heyBud, is that a rocket in your pocket, or just a silver lining?

To which I answer, invariably, either ore babykins...either ore...

works every time...swimmin in girlies! And the smart ones swing both ways...

bout that wad in your wallet...gettin much Doc?  (Maxwell-Ascension)


Thu, 02/21/2013 - 07:39 | 3262575 negative rates
negative rates's picture

All bitches die in the end, it was written.

Thu, 02/21/2013 - 08:38 | 3262642 Roandavid
Roandavid's picture

Meet MDB's new, secret gay lover, Dr. Paul krugman.

Not that there's anything wrong with that.

Thu, 02/21/2013 - 08:49 | 3262670 jerry_theking_lawler
jerry_theking_lawler's picture

i have been following this 'OI' situation for quite a few years. i believe silver (and gold) are manipulated, however, when is it ever going to come to an END? i fear it will be quite a few more years before it becomes completely unraveled. good luck on it happening sooner though.

Wed, 02/20/2013 - 23:43 | 3262182 DoChenRollingBearing
DoChenRollingBearing's picture

@ nope

+ 1  I completely agree with "I wouldn't sell - period."

As I do not trade, this is really more theater to me, except that I do buy Au and Ag, so I have to keep an eye on the prices so I know I am not getting overcharged.

Gold is for buying and holding through time, never sell it!  GIVE it away!

Thu, 02/21/2013 - 00:08 | 3262225 DavidPierre
DavidPierre's picture

The true measure of a MAN is not how much he has...

But how much of it he gives away.

Thu, 02/21/2013 - 00:33 | 3262282 DoChenRollingBearing
DoChenRollingBearing's picture

Does giving it away to your kid count?

Thu, 02/21/2013 - 01:01 | 3262306 DavidPierre
DavidPierre's picture

"We will dance when our laws command us to dance.
We will feast when our hearts desire to feast.
Do we ask the white man, 'Do as the Indian does?'
It is a strict law that bids us dance.
It is a strict law that bids us distribute our property among our friends and neighbors.
It is a good law. Let the white man observe his law; we shall observe ours.
And now, if you come to forbid us dance, be gone.
If not, you will be welcome to us."
Chief O'wax?a?laga?lis, Kwagu'?  to anthropologist Franz Boas
Thu, 02/21/2013 - 01:33 | 3262358 CompassionateFascist
CompassionateFascist's picture

Whites are the native Americans: there was no "America" until White imperialists created it out of  a wilderness enfestered with nomadic, collectivist, asiatic savages. And Franz Boas? A Western Civ-hating, Jew-anthropologist.  

Thu, 02/21/2013 - 05:56 | 3262529 Voluntary Exchange
Voluntary Exchange's picture

Your up votes and down votes balance, a sign of a interesting post. To those who actually believe such a perspective to be the whole "truth".  

Better weapons and slave control tech doesn't change basic morality shared by just about all cultures. And better tech doesn't make a definition of "enfestered" more right compared to the truth that was murdered and buried but always seems to refuse to disappear. Here's a basic law of the universe - things eventually return to the point of origin (if not now, then "later" and with much more force). Or didn't your mama teach you - Don't steal, don't lie, don't hit? Or did papa teach that you can do these things as long as you or your friends impose a government with "laws" in your favor and use magic white (black) words like taxes, legal tender, incorporation, enforcement, justice, treaties, and war? 

Here's a little esoteric truth: when some red men said: "white man speak with fork tongue", they were sharing what they could actually see with inner vision. There was something dark "enfestered" in some "white" folks. Too bad we just about murdered their culture, maybe we could have learned a new way to "see" from them. The price paid for murder and stolen land can be quite high. 

Thu, 02/21/2013 - 06:34 | 3262542 new game
new game's picture

today is a good day to die-sitting bull

Thu, 02/21/2013 - 06:41 | 3262546 Go Tribe
Go Tribe's picture

Actually, it was Darrell on Walking Dead who said that.

Thu, 02/21/2013 - 07:33 | 3262571 Tango in the Blight
Tango in the Blight's picture

No it was Worf from Klingon.

Thu, 02/21/2013 - 12:48 | 3263532 JOYFUL
JOYFUL's picture

U got a problem with "nomads" you got a problem with whitey too...

it's what we did best, until we rode west...and ran outta plains to roam on!

Many of your so-called asiatic savages have been found to have haplogroup markers linking them to the same "Caucasians" who shared the Asiatic spaces with the Sino Tibeto-Burman and Turkic families...we were "asiatics" till we moved west, they were asiatics till they moved east...

stay focused...the sionist worm in every apple is the problem...

red/white/black/yellow/brown...we all in this mess together...the rest is just sionazi agi-prop

Thu, 02/21/2013 - 01:45 | 3262383 knukles
knukles's picture

If the kid shuts the fuck up, behaves himself and gives you some peace and quiet time, you can call it any damned thing your heart desires and nobody'll say boo!

Thu, 02/21/2013 - 01:57 | 3262397 DoChenRollingBearing
DoChenRollingBearing's picture

Well, now I know!  Ha ha!

Thu, 02/21/2013 - 02:02 | 3262400 Vooter
Vooter's picture

Does giving it away to your boat count?

Thu, 02/21/2013 - 00:35 | 3262285 jimmyjames
jimmyjames's picture

DP..very true-

Thu, 02/21/2013 - 00:49 | 3262298 tickhound
tickhound's picture

My loan officer tells me the same thing.  The IRS should put the quote on the top of every form letter.

Repeat after me, pledges... "GIVE MORE"


Thu, 02/21/2013 - 07:42 | 3262577 nmewn
nmewn's picture

I think Big Chief 911 meant, voluntarily gives away, not stripped from your person by whooping raiding parties of feather wearing IRS agents carrying spears or guilt tripped out of it by their statist

Which remnds me, I need to renegotiate the terms of my social contract. I too would like to over spend without any consequence or responsibility.

I'm gonna call up Visa today and explain to them my wants & desires far exceed my income level ;-)

Thu, 02/21/2013 - 03:48 | 3262482 Sudden Debt
Sudden Debt's picture


now, just you give me your email and I'll send you my account number on which you CAN TRANSFER AS MUCH MONEY ON IT AS YOU WANT MY BEST BUDDY FRIEND!!

Thu, 02/21/2013 - 09:49 | 3262839 dunce
dunce's picture

Could it be that some large players are trading amongst them selves to set bid asked levels and to show volume?

Thu, 02/21/2013 - 02:55 | 3262450 The Heart
The Heart's picture
"In fact, its worse...but not as bad as tomorrow."

Tomorrow is Purim...yes...lets hope things do not heat up this coming weekend on the 23-24.

Friday Ticks...and this guy is off the hook with his great reporting.

Suddenly Everyone Sells Everything For Dollars: Stocks Fall, Oil Tanks, Gold Gets Crushed, Volume Exploded. Fed Officials Divided On Future of QE. Is the Big Reset Imminent?
Thu, 02/21/2013 - 09:47 | 3262833 BLOTTO
BLOTTO's picture

I was right - today is worse.


But not as bad as tomorrow...

Thu, 02/21/2013 - 01:24 | 3262351 A Nanny Moose
A Nanny Moose's picture

third time = bite down on something solid, to avoid suicide by tongue bite.

Wed, 02/20/2013 - 22:22 | 3261973 rotagen
rotagen's picture

The Collapse of Capitalism, a controlled demolition.



Wed, 02/20/2013 - 22:43 | 3262019 tickhound
tickhound's picture

I'm convinced given 2 humans on the planet, no better way than to be fruitful and multiply on a more efficient scale than capitalism.

They might as well control this demolition.  The demise was inevitable.

Wed, 02/20/2013 - 23:06 | 3262076 Spastica Rex
Spastica Rex's picture

Ever read Starship Troopers? There's planets out there with riches beyond our wildest imaginations just crawling with alien bugs begging to be squashed into extraterrestrial goo.

Indians were so 19th century.

Thu, 02/21/2013 - 00:09 | 3262232 tickhound
tickhound's picture

It was a book too???  LOL!

Beyond our wildest imagination, there's a chance, OMG however slight, that...

These bugs apparently buy shit, but don't have weapons, or are just bugs, or LOL at us cuz work is for primates with no tech, or OMG within the belt of ORION was found a Bug Being Society that was pure capitalist... so much so their market agreed that...

"what earth does to itself is one thing, it is their right to decide their fate.. but Manti forbid we allow them to infringe on the sovereign rights of other planets." 

This was a human thought experiment... under the influence. 

Conquered bugs was so 20th century.

Thu, 02/21/2013 - 01:26 | 3262354 A Nanny Moose
A Nanny Moose's picture

This is for you new people. Everyone fights, nobody quits. If you don't do your job, I'll shoot you myself.

Wed, 02/20/2013 - 21:53 | 3261901 Dear Infinity
Dear Infinity's picture

According to , the dip only resulted in dealers raising premiums (mouse over any of the prices to see a 24 hour price/premium chart). Physical is physical. Thanks for the sucker punch, Bernanke

Wed, 02/20/2013 - 22:01 | 3261925 Al Huxley
Al Huxley's picture

That's what I found - physical prices were down, but not like Comex.

Thu, 02/21/2013 - 03:27 | 3262474 e-recep
e-recep's picture


Wed, 02/20/2013 - 22:08 | 3261941 edb5s
edb5s's picture

Thank you for providing me with a new staple website.

Wed, 02/20/2013 - 23:44 | 3262189 DoChenRollingBearing
DoChenRollingBearing's picture

ZH will likely become THE staple website for you, as it has for many thousands of others...

Wed, 02/20/2013 - 22:37 | 3262003 Canadian Dirtlump
Canadian Dirtlump's picture

silvergoldbull prices came down nicely today, but i was nursing irish sunglasses after this week's price action.


at this point i am happy to pay more to see positive price action and the hopeful advent of the shit hitting the fan.

Thu, 02/21/2013 - 01:41 | 3262376 CompassionateFascist
CompassionateFascist's picture

Banksters will keep on pounding down the price of PMs until the long weekend of PaperPonzi collapse. So they can, at the last minute, grab as much of the real stuff as possible with their debtbux. And I plan to keep buying on the way down. Thank you Blythe, thank you Ben. Next to Rachmaninoff, the sweetest sound is the stacking of Silver Eagles  

Wed, 02/20/2013 - 22:54 | 3262046 tip e. canoe
tip e. canoe's picture

love the tagline for

"qualitatively uneasy since 2011"

Wed, 02/20/2013 - 23:15 | 3262079 awakening
awakening's picture

Mines different (but I like this one better): "What's a trillion between friends?"

edit - sorry that's the gold page :)

Wed, 02/20/2013 - 23:31 | 3262150 ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture



I could have sworn that when silver fell from $50, the premiums went way up as well.  For a while... 


I need to become more of an information packrat so I can prove this kind of stuff when I say it.

Wed, 02/20/2013 - 23:37 | 3262160 constantine
constantine's picture

Frankly,there are still plenty of places to buy physical silver at a 3% premium, apmex being one (100oz RCM bars).  However, the platinum market is a show.  APMEX is buying platinum at a $100 premium and selling it at a $200 premium.  Platinum is basically selling below the costs of extraction; last night a fresh round of riots across platinum mines in South Africa and the price gets obliterated today.  With all of the talk of gold and silver, platinum may sneak up and be the first precious metal that renders its paper price irrelevant. 

Thu, 02/21/2013 - 01:08 | 3262327 constantine
constantine's picture

Sorry... I have to correct this. Those premiums are only there for the platinum american eagles. Should have looked more closely before posting.

Thu, 02/21/2013 - 00:01 | 3262207 fockewulf190
fockewulf190's picture

I'm holding and adding to my stack to help my family and my biz to get through the Great Reset. Mike Maloney thinks a vast wealth transfer is going to happen, with stackers enjoying unbelievable wealth as long as you sell your phyzz during the right point of the cycle. For me, I stack for insurance, and it doesn't matter if gold goes to $10 grand an ounce and silver hits $500. When those prices are reached, you can expect every nation on Earth with even a gram of gold being held in a foreign vault will be demanding immediate delivery. Of course, this is when the final truth about gold is forced out, and everyone will be outraged. The US will end up being the biggest thief in the world, the fiat in use today will promptly vaporize, and the 600+ trillion dollar derivatives time bomb will then detonate. The financial world will not have any tricks left to save the globalized system in it's current form. Until a new system is generated out of the ashes, it's phyzz that is going to be the only real money left during the transition, and I'll be glad I have some.

Thu, 02/21/2013 - 00:15 | 3262245 Alexandre Stavisky
Alexandre Stavisky's picture

Just the culmination of a policy toward pure fiat.  By breaking link to gold, the CBs drew all power over the assignments of every value to themselves, and broke the last vestige of the common man's ability to call/run/or sequester their wealth from arbitrary dilutions.  They have all power, you have none.

If I were a gov't that had reached the Keynesian endpoint and had unmitigated power of money creation and its distribution (sterilized or not), and I were desperate to trap as many wealth holders in my mechanism to which the marks had no recourse, I would undoubtedly crush any alternative form of money.  And why not?  If you can overnight make substantial step devaluations (like venezuela, or FDR in 1932-33) or continuously negatively compound and devalue, what does money thrown at markets to manipulate a commodity price mean?  Nothing.  Those 1's and 0's can be recovered to smooth any loss by dictat.  Today's paper/screen loss will be recouped in the Great Reset.  We won't recoup, however.

You don't think that those who have been given the sacred privilege of money creation are going to let gold-bug upstarts try to re-establish a defacto gold standard, do you?  This is their domain and life's work parameter. Global collectivism supposes that a man's labour held in reserve for old age or any other purpose isn't his to properly husband.  It is the state's to tax, assess, diminish, or devalue according to their need and whim.  Preserving your purchasing power and attempting to remain solvent in a sea of insolvency is treason in our brave, new world.

But, I do wonder.  Why would Chavez repatriate gold and then later make dramatic overnight devaluation?  What is so important about that gold stock?  Couldn't just as much value be created by a larger % devaluation?

Will they pre-announce in an FOMC meeting when they default or devalue?

Thu, 02/21/2013 - 00:56 | 3262309 anonnn
anonnn's picture

Lemme guess:

Chavez wanted the transaction DONE, with certainty and minimum anxiety.

Chavez did not want to wait 7 years for delivbery? [re Germany's recall over 7 years from the NYFed].

Chavez did not want to go-hn -hoping, in mystery.

Chavez read and understands Ibsen's Waiting For Godot ?




Thu, 02/21/2013 - 01:51 | 3262389 CompassionateFascist
CompassionateFascist's picture

The well-named A. Stavisky (after a notorious 1930s French Jew ponzi-schemer) has forgotten something: there is another metal most precious of all: lead. And - witness the current, frantic gun grab - the banksters and their stooge politicians know it. 

Thu, 02/21/2013 - 08:20 | 3262613 fockewulf190
fockewulf190's picture

That is all but a US phenomena within the western world. Finland's population also pack a nice arsenal, but last I heard, the zombie hoards don't like he cold.

Thu, 02/21/2013 - 01:03 | 3262317 fockewulf190
fockewulf190's picture

Ahh, but the Chinese are buying gold and silver hand over fist and actually encouraging their population to do the same. They haven't said a peep since 2009 as to how much gold they officially own. It's like a state secret to them. Why do they act so differently? Why have they created their own gold exchange and built huge storage vaults to rival London? I believe they are expecting the Great Reset as an inevitable event, and unlike the west, they actually have some kind of plan to carry themselves through the transition period and make their claim as the richest financial power in the world subsequently. The Indians, of course, may get a chuckle out of that with all the gold it's population has. No doubt though, when the west falters, those two nations will be the new Byzantine Empires on this Earth. We truly are living during interesting times.

Thu, 02/21/2013 - 01:56 | 3262395 jumbo maverick
jumbo maverick's picture

If phyzz silver goes to $500/oz I would probably cry. Then I would get one of my Glocks silver plated, I would get a bug deflector on the front of my truck that read- SILVER BITCHEZ, I would get a pimp cup with a big SE super glued on it and I would drill a hole in a SE to wear around my neck.

And I would be telling all the BITCHEZ - Hey BITCHEZ get off my dick. I got stacking g to do!

Thu, 02/21/2013 - 04:52 | 3262510 tenpanhandle
tenpanhandle's picture

nice phantasy bro, but while da bitchez be on your dick, der pimp mo-fos be heisting yer stack.

Thu, 02/21/2013 - 06:43 | 3262548 new game
new game's picture

make sure the lettering can be seen properly thru a mirror...

Thu, 02/21/2013 - 06:45 | 3262549 Go Tribe
Go Tribe's picture

You got that right.

Wed, 02/20/2013 - 21:56 | 3261902 bnbdnb
bnbdnb's picture

Buy with print. Sell lower with print. Remove print. Next Print.


Ctrl-P, Ctrl-X, DEL -y, F5.

Wed, 02/20/2013 - 21:57 | 3261913 Hulk
Hulk's picture

Same shit happened in late 08, just look at the 5 year chart.

As long as one isn't paper levered, all will be fine.

Patience is the order of the day Bitchez !

Smoke if you got em !!!

(especially you, Fuu)

Wed, 02/20/2013 - 22:03 | 3261934 fourchan
fourchan's picture

true my ounces are unphased by the fiat motion. its still perfect and shiny and not subject to any counter party risk.


my ounces are still in the 2000$ range, if i even wanted to sell them.

Thu, 02/21/2013 - 00:15 | 3262243 Angus McHugepenis
Angus McHugepenis's picture

I love the smell of exchanging paper for metal. It smells like victory!

(Apocalypse Now?)

Wed, 02/20/2013 - 21:58 | 3261916 JustObserving
JustObserving's picture

It has been apparent for years now that US markets are fraudulent.  The evidence mounts everyday.  Anyone who cannot see the fraud is blind.

Wed, 02/20/2013 - 23:30 | 3262149 Robot Traders Mom
Robot Traders Mom's picture

They are absolutely fraudulent, you're correct. Everyone knows this, too.


However, people need to realize how lucky we are to be able to buy at such cheap levels for so long. I'd much rather buy gold at $1,600 than $16,000...


Think about it. We should be thanking Blythe for this. If you try and trade it, you'll get burned. Every day is a good day to buy the metals. It is never a good day if you have to sell them...

Thu, 02/21/2013 - 00:56 | 3262310 AllWorkedUp
AllWorkedUp's picture

Exactly. How about just staying out of the paper markets altogether and quit feeding the endless shorts. These markets need to be shut dowm, period. Burned to the ground. All the players and regulators are completely corrupt. They'll never be any different as long as the current system is in place.

Hold onto the phyzz - screw the paper.

Thu, 02/21/2013 - 01:50 | 3262390 RebelDevil
RebelDevil's picture

Maybe that's exactly why they're doing it - so TPTB can buy a shit load at cheap prices.

Thu, 02/21/2013 - 06:12 | 3262535 No Euros please...
No Euros please we're British's picture

OMG! What!? Fraud you say? I'll get Bart Chilton and his guide dog on the case right away.

Wed, 02/20/2013 - 21:59 | 3261918 TheSettler
TheSettler's picture

Germany wants their Gold that we do not posess returned...expect this beatdown to continue till they can come up with enough to start shipping it...


Wed, 02/20/2013 - 22:11 | 3261945 rehypothecator
rehypothecator's picture

Germany allegedly held the gold at financial centers in order to trade it.  So why don't they just "Sell" it.  Announce that they are selling their gold, and ask the US to please sell it.  Then, with the remitted funds, buy gold contracts and stand for delivery, and send it back to Germany.  They US has to cough up the money, Germany gets their gold, and everybody's happy.  Except for the non-German central bankers, I suppose.  

Wed, 02/20/2013 - 23:07 | 3262070 moonstears
moonstears's picture

Those contracts can be settled in dollars ALWAYS, it's in the fine print, I think to do as you said would assure no physical delivery.(p.s. I like your thinking, outside the box, but don't think it'd work for that reason)

Wed, 02/20/2013 - 23:18 | 3262114 NoDebt
NoDebt's picture

It's tantalizing and a good discussion to have.  I'm afraid, however, the problem is in real world execution of that strategy.  The Germans aren't stupid.  They know a move like that would be big enough to move the world market and they would be punished in the price they pay for those open market contracts.  Speculators would front-run that like they front-ran the Fed in their bond purchases. 

Their best bet is to take it back from the Fed under the existing arrangement, even if that means they have to wait for the metal to be dug out of the ground over a period of years.

Hard to move big positions in assets (especially REAL assets) quickly without being punished on the price of doing so,

Thu, 02/21/2013 - 11:34 | 3263327 rehypothecator
rehypothecator's picture

If five or ten Hermann Schickelgrubers were to open futures accounts and stand for delivery of just a couple tons each, each month, each account would be relatively small on the scale of the whole futures market, but the combined delivery rate would greatly exceed what the Fed has promised.  Furthermore the price action would be neutral, unless some curtains need to be pulled back on fraud, becuase Germany would instruct the US to be "selling" just as much "gold" as the combined Schickelgruber accounts would be buying.   (Quoted terms to account for pssibility of fraud.)  At delivery time, they refuse the cash settlement and declare they want good delivery.  If they don't get it, they go public, but the relationship of those accounts to the official German sales could be secret. Even if they only get half of what they stood for, it would still greatly exceed the rate the Fed has promised.  

Wed, 02/20/2013 - 22:29 | 3261985 The Thunder Child
The Thunder Child's picture

Que Collapse and.....Corzined


Wed, 02/20/2013 - 21:59 | 3261919 Northern Lights
Northern Lights's picture

Drop means little and was anticipated on ZH'ers long ago.  If we truely are in a recovery, I'd expect interest rates to increase and I'd start making money on all that cash I have saved in my savings account as well as my tax-free savings account...................hold on.................nope, no increase in interest rates.  Time to buy more gold.


Wed, 02/20/2013 - 22:03 | 3261932 Never One Roach
Never One Roach's picture

I remember when in 2008/2009 everyone panicked and dumped silver and gold...I added gld at 76 and slv at 8.8 if I remember correctly.


These 200% + gains helped calm my wounds form my house plunging 42% and looks like it'll still keep dropping for the foreseeable future.

Wed, 02/20/2013 - 23:07 | 3262077 Michelle
Michelle's picture

Not panic, forced selling.

Enjoy watching Paulson's other stock holdings getting whacked while GLD is in a downdraft. Like they say, know your fellow investors.

Wed, 02/20/2013 - 23:27 | 3262136 NoDebt
NoDebt's picture

Forced selling AND the then very real prospect of deflation (a la The Great Depression) had the Fed not stepped in with their insane-o "liquidity" measures to lean against the deflationary headwind.

If we go deflationary, Gold will drop (in nominal terms) just like every other asset.  If we go hyper-inflationary, gold's the only place to be.

Step right up, place your bets.  This one's for all the marbles.  The unstoppable force of Fed money printing slamming against the immovable object of deleveraging mountains of worthless debt.

Wed, 02/20/2013 - 23:37 | 3262159 otto skorzeny
otto skorzeny's picture

deflation then inflation-keep your powder dry

Thu, 02/21/2013 - 06:52 | 3262553 Go Tribe
Go Tribe's picture

Stagflation, the ultimate perfect environment for manipulation.

Wed, 02/20/2013 - 23:57 | 3262209 jimmyjames
jimmyjames's picture

If we go deflationary, Gold will drop (in nominal terms) just like every other asset.  If we go hyper-inflationary, gold's the only place to be.


You gave 2 examples of what might-or might not happen--

Here is a 3rd....competitive currency devaluations are the focus now-sooner or later-one of those "major currencies" will be sold off-in a panic (my guess JPY) the first major currency to go into a collapse/crises will be the kiss of death to all of them-because-they will have no chice except to weight to gold-

It will happen just like we seen during the PIIGS contagion-as soon as one is done-they move to the next weakest--

The first currency to weight to gold will drag all the rest of them kicking and screaming to gold--

Gold will be bought on the open market by central banks/governments in a panic-in order to save their currency-

just another might or might not scenario-but I'm betting on it-


Thu, 02/21/2013 - 01:38 | 3262372 RebelDevil
RebelDevil's picture

You forgot silver..

Wed, 02/20/2013 - 22:10 | 3261942 Nid
Nid's picture

If only there was a dedicated financial media outlet with the resources, technology, manpower and expertise to do some real investigative journalism into these types of issue.......if only.

Wed, 02/20/2013 - 23:15 | 3262104 SmallerGovNow2
SmallerGovNow2's picture

Nid, there is enough, but they are already bought and paid for by the TBTF MF'ing POS banking and media oligarchy....

Thu, 02/21/2013 - 00:16 | 3262249 ZeroAvatar
ZeroAvatar's picture

You mean, like.......a Weapon of Mass Instruction?  Yeah, I hear ya....if only.

Thu, 02/21/2013 - 03:26 | 3262473 slackrabbit
slackrabbit's picture

Captial Account on RT.....oh the irony.


Wed, 02/20/2013 - 22:11 | 3261946 Theos
Theos's picture

I ask myself, can I, someone who has youth, no liabilities, no family, no children, and income within the 5%, will ever pay back the debt straddled on me by my parents generation, my decimated peers and the fuckers they elected? Just barely.


I guess that's why gold is a good idea. fuck it. I'd love to be wrong. My balancing says its time for some more.

Wed, 02/20/2013 - 22:53 | 3262043 gwar5
gwar5's picture

GYSOODWYC -- get  your shit out of Dodge while you can


We are all just plankton and the dinner bell is ringing.  

Wed, 02/20/2013 - 22:12 | 3261951 lickspitler
lickspitler's picture

stack-a-lackin. From the price action looks like everybody filled.

Wed, 02/20/2013 - 22:14 | 3261954 Confundido
Confundido's picture

The problem is that the fact that bullion banks can create paper gold to oversupply the market is also...A FUNDAMENTAL!

Wed, 02/20/2013 - 23:38 | 3262161 jimmyjames
jimmyjames's picture

The problem is that the fact that bullion banks can create paper gold to oversupply the market is also...A FUNDAMENTAL!


Agree-but-they also over supplied the market with credit and created a housing bubble and it worked--until the pool of greater fools dried up-

The manipulation (everything has always been manipulated) gold is just another pawn-but if it worked-gold would still be at $200 and credit/money (created out of thin air plus interest)  and handed over to anyone who could fog a mirror--housing would still be going up as well--no need for printing-

Mr Market is winning-

Wed, 02/20/2013 - 22:17 | 3261958 LoneStarHog
LoneStarHog's picture

Might be manipulation?  If I hit you upside the head with a SLEDGE HAMMER, will you say that you MIGHT have been hit with a SLEDGE HAMMER?  When are you F'ING MORONIC AUTHORS going to recognize REALITY?  When you get hit upside the head with a SLEDGE HAMMER??????????????????????????????

Wed, 02/20/2013 - 22:20 | 3261964 lickspitler
lickspitler's picture

you stack ?

Wed, 02/20/2013 - 22:21 | 3261967 Mr. Magoo
Mr. Magoo's picture

Those who endure to the end are the ones who will be saved, from financial ruin

Wed, 02/20/2013 - 22:21 | 3261969 Trimmed Hedge
Trimmed Hedge's picture

Only $120 over spot!



Wed, 02/20/2013 - 22:22 | 3261970 in4mayshun
in4mayshun's picture

I freakin love the suppressed price of silver. I have 3x the silver that I would have otherwise. Keep it below $36 for another year and I double my stash

Wed, 02/20/2013 - 23:14 | 3262088 Non Passaran
Non Passaran's picture

Exactly my wish. I've never dreamed that may be ever again possible.
I'll use this opportunity to at least double my physical silver.

Wed, 02/20/2013 - 22:23 | 3261975 Mr. Magoo
Mr. Magoo's picture

I pretty sure the Russians, Indians and Chinese are real happy, buy on the dip before the music stops the one holding the most paper LOSES

Wed, 02/20/2013 - 22:23 | 3261976 deKevelioc
deKevelioc's picture

December of 1974 was the beginning of a 50 perent decline in the gold price.  By August 1976, I'm sure many gave up on the market as the price fell back to $100, from the $200 print of December 1974.   Those who held, or accumulated more, saw the price of gold rise more than eight-fold within 40 months.  

Patience, please.


Thu, 02/21/2013 - 00:00 | 3262217 e_goldstein
e_goldstein's picture

JonNadler, you should know, shouldn't you ;-)

How's the new job as towel boy at the bath house going?

Thu, 02/21/2013 - 07:14 | 3262568 JonNadler
JonNadler's picture

I got fired actually, I don't know they didn't appreciate the fact that I told every costumer that going to a bath house was a waste of time and not good for their health. Some habits die hard

Thu, 02/21/2013 - 00:41 | 3262288 DoChenRollingBearing
DoChenRollingBearing's picture

JonNadler: Aurus Trollisimus! is a nice site, no?

Good to see you around, mucking up the waters...

Thu, 02/21/2013 - 07:10 | 3262566 JonNadler
JonNadler's picture

Mr DoChen, always good to see you. Do they admit washed up, discredited, discarded, disgraced, old trolls in that site? I may join then. I'd like to contibute some of my "expertise" 

Thu, 02/21/2013 - 03:00 | 3262455 Kirk2NCC1701
Kirk2NCC1701's picture

JN, beam yourself over to Winnie's on Crescent St., to manipulate your way into some golden opportunity.  Assuming it's not your favorite hot spot already.  ;-)

Wed, 02/20/2013 - 22:26 | 3261983 acompletedouche
acompletedouche's picture


That's sooooo 2007

99% of every single trade on every single stock,bond or commodity is totally rigged (and always will be from here on out).If your hoping for fundamenls your are wasting your time in this market.

Wed, 02/20/2013 - 22:30 | 3261991 fonzannoon
fonzannoon's picture

i just want to live to see the day where the wheels come off and the camera pans to the trading floor and you see a stampede of traders flying out the door and all that is left is a flattened bob pisani with a microphone up his ass.

Thu, 02/21/2013 - 00:02 | 3262221 Angus McHugepenis
Angus McHugepenis's picture

Microphone: "Check... check... testing... pfffttt...

Thu, 02/21/2013 - 00:27 | 3262271 howenlink
howenlink's picture

And Rick Santelli with a Whopper and a Raven's cheerleader!

Thu, 02/21/2013 - 01:02 | 3262319 Spectre
Spectre's picture

Yup, but I'd like to see them trying to fly out of windows instead.

Wed, 02/20/2013 - 22:32 | 3261995 yatikto
yatikto's picture

Unfortunately in this day and age conspiracy theories are not investigated, but outright dismissed by the powers that be.  Dismissed because bringing them to light would question the faith/stability/confidence. Even their discussion is feared as letigimization. But theories propagate and multiply because transparency is lacking.  And transparency is only decreasing. Their opacity is exacerbated by our own transparency that is forced on us.  The new dark ages.


Wed, 02/20/2013 - 22:41 | 3262015 gwar5
gwar5's picture

Digital Curtain


Wed, 02/20/2013 - 23:03 | 3262067 a growing concern
a growing concern's picture

They're not really conspiracy theories so much as facts.

Wed, 02/20/2013 - 22:37 | 3262001 Croesus
Croesus's picture

The BIG upside move is coming soon, REALLY SOON.

BTMFD, people!

By June of this year, Gold will be quite a bit higher.


Wed, 02/20/2013 - 23:47 | 3262194 BeerBrewer09
BeerBrewer09's picture

Good because I plan on buying a lot in cash at a coin show in april.

Wed, 02/20/2013 - 22:38 | 3262008 Nostradamus
Nostradamus's picture

Backing up the truck to load up on silver on a drop under $28/oz.

Wed, 02/20/2013 - 23:09 | 3262085 SmallerGovNow2
SmallerGovNow2's picture

28 is awesome, why wait?  I'm in....

Wed, 02/20/2013 - 22:38 | 3262009 Mr. Magoo
Mr. Magoo's picture

I think I am going to wait until the Dow hits 5000 before i stack

Wed, 02/20/2013 - 22:50 | 3262034 IridiumRebel
IridiumRebel's picture

It will hit 15000 before 5000. Collapse in May and then go away......

Thu, 02/21/2013 - 00:43 | 3262292 DoChenRollingBearing
DoChenRollingBearing's picture

@ Magoo

Don't wait!  

BUY as income comes in, trying time your purchases is a mug's game.  Buy regularly and hang on tight!

Thu, 02/21/2013 - 06:58 | 3262557 Go Tribe
Go Tribe's picture

Riot drones on the way.

Wed, 02/20/2013 - 22:38 | 3262011 gwar5
gwar5's picture

Head fake for weak hands. Fundamentals for gold keep getting better with G-20 open acceptance of more printing by everybody. FOMC lip service was just tha t. Gold should be moving up along with oil and horsemeat  .

Bernanke 2009: "We will not monetize..."


Wed, 02/20/2013 - 22:46 | 3262021 IridiumRebel
IridiumRebel's picture

Bernanke everyday: "We will lie to your faces, peons..."

Wed, 02/20/2013 - 22:40 | 3262014 IridiumRebel
IridiumRebel's picture

I need no dramatic inspiration. I merely need to holdfast to the fact that anyone who so desperately tries to play "Master and Commander" of an asset class and its subjugation obviously is worried that the curtain will be raised and the truth shall be soon known. We all know what is going on. You think they would be smart enough to make the down slide happen outside of 8AM EVERY morning. What is coming is a mathematical certainty. The question is whether it is by design or stupidity or fright or some combination there of.....

Wed, 02/20/2013 - 22:49 | 3262030 americanspirit
americanspirit's picture

My average gold price is $503. And my average silver price is $7.61. Suck fart gas JPM.

Wed, 02/20/2013 - 22:52 | 3262036 IridiumRebel
IridiumRebel's picture

 I wish I was smart enough to enter at that price point, but I'll stay ok with 1200.

Thu, 02/21/2013 - 00:44 | 3262293 DoChenRollingBearing
DoChenRollingBearing's picture

My average buying point is about $1550 for gold and about $27 for silver.  The IRS reads ZH, no?

Thu, 02/21/2013 - 01:19 | 3262344 IridiumRebel
IridiumRebel's picture

You're still ahead of the game. I got into silver when it was in the high 30s. PMs play a long game.

Thu, 02/21/2013 - 03:09 | 3262463 Kirk2NCC1701
Kirk2NCC1701's picture

Scotty lost our silver & gold when he had a "senior moment" and he beamed it to the Vulvan ship, instead of the Vulcan ship.  He's in deep shit now, as even Spock looks a tad 'emotional'.

Thu, 02/21/2013 - 00:59 | 3262314 Spectre
Spectre's picture

Cool Beans, Gold for me is $383 and Silver at a rocking 4.07......  I've been fortunate.


Good Luck

Thu, 02/21/2013 - 01:38 | 3262373 seek
seek's picture

I bought the two half-ounce coins I gave to my ex (d'oh!) for $270 and about $900, for an average of just a bit less than $600. Wish I still had them.

I was late to the silver bus, but since I found my one pre-1964 quarter when silver was trading at $26, no big deal.

Thu, 02/21/2013 - 07:00 | 3262558 Go Tribe
Go Tribe's picture

Late is a relative term.

Wed, 02/20/2013 - 22:51 | 3262035 DavidPierre
DavidPierre's picture


FOMC ambush. Again.

Only in the PM sector all news is bad news.

Any headline news event is sure to garner further selling pressure in both the metals and the mining stocks. When you have a market that is entirely driven by the ability and willingness of participants to engage in unbacked paper contracts, enabled by the absence of regulatory scrutiny, it can go no other way. It appears to me that the silver and gold options market has devolved into a cage match fight to the death, pitting the unlimited financial weight of large banks against the rest of the market. It is alarming to me that the crooks have chosen at this point to go all in. History has demonstrated that as long as the pressure continues to build, eventually it is the smaller specs that cave in and dump positions. So far each escalation in the intensity of the short attack during this cycle has been resolutely opposed but one must wonder how much longer this can be sustained.

The entire month of February has seen a series of blatant manipulation in the silver pits. Today the FOMC minutes are the talk of the market. Both gold and silver have been bombed yet again to set the tone. On friday there was a record volume of contracts traded in the silver pits amounting to significantly more silver than is produced worldwide in an entire year. This may be seen as the benchmark for manipulation in plain view. A small group of connected individuals has arranged to break the back of the market using derivatives leverage.

The logical outcome to this operation is that metals prices will be driven lower until the longs pitch their contracts and we go back to square one. A second outcome would be that the longs have full commitment to stand for delivery.  There is not enough silver bullion inventory to meet even a fraction of the claims against it should contract holders exercise their right to demand delivery. The fearless intensity of the Cartel operation suggests to me that there are already plans drawn up to deal with a COMEX default if the nonstop manipulation effort does not do its job. The regulators will simply change the rules to let the Cartel off the hook.

Heads they win, tails we lose... Its that simple.

The unintended consequences are the questions at this point. A default removes the myth of abundant metals supply for once and for all. Will this trigger a panic to buy real bullion that would clear out the remaining inventory from every dealer large and small? With the breakdown in the spot price manipulation, would the metals producers have greater leverage to sell mine output at higher prices? Would the specs pile into the bullion ETFs for trading leverage, or avoid them? What of the demands from CBs to repatriate bullion? What of the demands from nervous owners holding bullion in pooled and allocated accounts?

If we finally get a showdown at the COMEX it is inevitable that a default happens.

The timing is uncertain however, as the Cartel is clearly willing to force the issue and has pushed its chips all in. They will issue unlimited contracts if necessary, and then declare Force Majeure if called to delivery, and walk away with no sanctions or prosecution. It is in the chaos of the aftermath that we may finally see some resolution to this manipulative selling pressure that has crushed the entire sector.

The only other positive outcome to all of this is that the relentless selling pressure has triggered the smaller specs to go short in such magnitude that the Cartel has created the suckers to hand off its short position and roll to a long posture. The COT report is inconclusive at this point, but given the historic high volume of contracts changing hands, and the possibility that COT report itself is a fiction, plus the unknown exposure that is held through OTC contracts, it is a possibility that the plunge in the metals has sucked in a lot of shorts at the bottom of the trade who will be slaughtered in the rebound as the big banks go long.

And lastly, it is possible that we are the schmucks and all of the research and discussion during this bull market has been an exercise in denial. If silver and gold are both a speculative bubble, and the problems of the world are fixed, and unlimited debt issuance really is the cure for a debt crisis, and that money printing can escalate into infinity without creating inflation, that spin and bullshit can trump economic fundamentals... You get the idea. If all it took was a willingness to ignore reality then the Titanic would still rule the waves. Even massive manipulation is still just manipulation. No need for a weatherman when there is a hurricane raging outside my door, and when I see full evidence of a hurricane but the weatherman insists that the sun is shining, I know enough to believe my own senses.

If the rest of the market wants to play games of interpretation, let them play.

Thu, 02/21/2013 - 00:46 | 3262297 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1 for reporting!

If you don't trade, and just BUY & HOLD, you will do great!

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