• Monetary Metals
    05/02/2016 - 01:28
    The price of gold shot up this week, and silver moved proportionally. Headlines are screaming for gold to hit $10,000 or $50,000. Does this alleged new bull market have legs?

Furious Gold Slamdown Leads To Yet Another 20 Second Gold Market Halt

Tyler Durden's picture




 

What do the following dates have in common: September 12, October 11 and now, November 20? These are all days in which there was a forced gold slamdown so furious, it triggered a "stop logic" event on the CME resulting in a trading halt of the precious commodity. In today's case gold trading was halted for a whopping 20 seconds as the market tried to "reliquify" itself following what was a clear attempt to reprice the gold (and silver) complex lower. Needless to say, there was absolutely no news once again to drive the move. Ironically, this comes just as the London regulator is launching an investigation into London gold benchmark manipulation - we are, however, confident that all these glaringly obvious manipulative events that take places just around the London AM fix will be routinely ignored. After all it is perfectly normal for someone to dump 1500 GC contracts in one trade and suck up all the liquidity from the market with zero regard slippage costs, or getting the best execution price possible. Well, it's normal if that someone is the Bank of International Settlements.

Since there is nothing new in the narrative, here is what we said last time this event happened just over a month ago:

What is Stop Logic? Basically, it is a the mother of all stop hunts, which takes out the entire bid stack and continues until such time as there is absolutely no liquidity left in the entire market! From the CME:

Stop Logic detects potential market movements caused by the triggering and trading of Stop orders where the resulting price move would extend beyond an exchange specified threshold.

 

The triggering of Stop orders can potentially exaggerate price movements in temporarily illiquid markets. When triggered Stop orders attempt to move the market to an executing price beyond a pre-established value, a Stop Logic event occurs. Stop Logic detects these situations and responds by placing the identified market in a Reserved state for a predetermined period of time, usually 5 to 10 seconds, depending on the instrument. During the Reserve period, new orders are accepted and an Indicative Opening Price (IOP) is published, but trades do not occur until the Reserve period expires, thereby providing an opportunity for participants to respond to the demand for liquidity. At the end of the Reserve period, the instrument will re-open and matching will resume.

 

When a futures contract designated as a lead month contract experiences a STOP Logic event, associated options markets are paused and Mass Quotes canceled.

 

Stop Logic will not prevent markets from ultimately moving in the direction of the order flow, but allows time for liquidity to enter the market so that new orders can be matched against the triggered stop order(s).

Of course, the liquidity we re-enter at a time when the prevailing price has been reset substantially lower on what is basically a "banging the open" type of event, or in this case market open, when one or more traders attempt to generate the well-known "momentum ignition" event so known to HFT algo manipulators everywhere.

Most indicative is that this is taking place less than 24 hours after the FSA announced it was investigating precisely this kind of gold manipulation. What's the saying... "in your face"?

And, as usual, capturing this moment of epic manipulative smackdownness which took place precisely at 6:26:40, here is Nanex showing both the 20 second trading halt and the evaporation of all liquidity following the forced sell of 1500 GC contracts pushing the price of gold over $10 lower.

1. December 2013 Gold (GC) Futures Trades.
 

 

1b. December 2013 Gold (GC) Futures Trades - Zoom 1.
 

 

1c. December 2013 Gold (GC) Futures Trades - Zoom 2.
The 20 second halt shows up clearly.
 

 

2. December 2013 Gold (GC) Futures Quotes.
 

 

2b. December 2013 Gold (GC) Futures Quotes. Zoom 1
 

 

2c. December 2013 Gold (GC) Futures Quotes - Zoom 2.
 

 

3. December 2013 Gold (GC) Futures Depth of Book
 

 

3b. December 2013 Gold (GC) Futures Depth of Book - Zoom.

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Wed, 11/20/2013 - 08:12 | 4172836 markmotive
markmotive's picture

Is bitcoin a better alternative than gold?

The Future of Bitcoin - Bust, Bubble or Breakthrough?

http://www.planbeconomics.com/2013/11/the-future-of-bitcoin-bust-bubble-...

Wed, 11/20/2013 - 08:18 | 4172854 firstdivision
firstdivision's picture

Really!?!?  You're entertaining the idea that some electronic fiat is an alternative to a physical asset?!?

Wed, 11/20/2013 - 08:21 | 4172862 GetZeeGold
GetZeeGold's picture

 

 

Who's halting this crap?

 

I was just seconds away from getting the deal of my life!

Wed, 11/20/2013 - 08:23 | 4172866 Dear Infinity
Wed, 11/20/2013 - 08:31 | 4172887 GetZeeGold
GetZeeGold's picture

 

 

I think they're holding a little back for the Black Friday sale.

Wed, 11/20/2013 - 08:48 | 4172933 Pemaquid
Pemaquid's picture

One would think that a little transparency - revealing who is doing the smash downs - would put a quick stop to it. Or is the system too far gone for that?

Wed, 11/20/2013 - 08:54 | 4172942 GetZeeGold
GetZeeGold's picture

 

 

 

Oh no......we never talk about that.

 

It's sort of an unwritten rule.

Wed, 11/20/2013 - 09:11 | 4172978 chubbar
chubbar's picture

First notice day for delivery is next Wednesday and if over 3.5% of contracts take delivery the Comex will be in default. You can bet your ass that there is going to be a war on in an attempt to liquidate the longs. Fucking assholes.

Wed, 11/20/2013 - 09:31 | 4173039 PP
PP's picture

Can we blow out those manipulators physically? I mean give them some bullet or explosives? Physical PM owner can not sell short.

Wed, 11/20/2013 - 09:34 | 4173048 Pool Shark
Pool Shark's picture

 

 

And yet; Silver hardly budged...

 

 

Wed, 11/20/2013 - 11:13 | 4173331 Rubbish
Rubbish's picture

It's obvious there is a systematic decline in the prices. Store your FRN and wait, pointless to lose money on the attack.

 

Better picture come January, buy a chunk then.

Wed, 11/20/2013 - 09:43 | 4173066 quasimodo
quasimodo's picture

"Comex will be in default"

 

HAHAHAHAHAHAHAHA

HOHOHOHOHOHOHOHO

 

HAHAHAHAHAHAH!!!!!!!!!!!!!!!!!

 

(slaps knees, wipes tears from eyes)

 

Sorry guys, I'm sure most here will understand the basis for that sarc. All I can do is laugh anymore, even the wife thinks I am fucking crazy for liking shiny stuff.

Wed, 11/20/2013 - 15:54 | 4174669 Thisson
Thisson's picture

COMEX can't really default because they can tender dollars instead of gold.  Remember, futures are contracts and the remedy for a breach of contract under the law is normally a payment of money (specific performance and other equitable remedies are normally not available for a breach of contract claim, especially where the subject of the contract is a fungible good and commodities are, by definition, fungible goods).

Wed, 11/20/2013 - 11:17 | 4173308 Againstthelie
Againstthelie's picture

What is a marketplace?

In a marketplace people meet face to face or have agents to make transactions.

It is against the character of any market, if the participnts or brokers/agents, that make HUUUGE market moving deals, are kept in secret.

Maybe there is a small chance with the Freedom of Information act to get the information, which agents/banks/brokers are committing these market rigging events?

IMO it's also against all civilized rules, that an agency like the CFTC says "no manipulation found", but does not show any evidence, that the market events were NOT a result of three or a handful conspirators!

That in a free market eceonomy the "free media" do NOT raise their voice that these developments must be stopped, also shows that all the corrective mechanisms in the system do not work anymore.

 

As curious as it seems, such smackdowns without any consequences are indirectly the best recommendation to buy the 5000 year old with 100% success rate insurance against declining, rotten and corrupt political systems...

Wed, 11/20/2013 - 08:26 | 4172870 Doña K
Doña K's picture

I think it's a message: "We can do whatever we want and there is nothing you little people can do about it".

They are closing the only logical counterplay.

Wed, 11/20/2013 - 08:28 | 4172879 SilverIsKing
SilverIsKing's picture

Of course we can do something. That something is to buy physical PMs.

Wed, 11/20/2013 - 08:42 | 4172917 kralizec
kralizec's picture

Just after 6am was the best time, eh?

http://finviz.com/futures_charts.ashx?t=GC&p=m5

I need an algo to trigger these deals!

Wed, 11/20/2013 - 09:12 | 4172981 Oracle of Kypseli
Oracle of Kypseli's picture

Look out for the innvestigators to come back and say: "It was a hedge bet. Shut up you." 

Wed, 11/20/2013 - 10:13 | 4173145 kralizec
kralizec's picture

I'd laugh...but...

Wed, 11/20/2013 - 10:29 | 4173183 Al Huxley
Al Huxley's picture

It seems to take about 5 years for these investigations into the gold and silver market, so by the time the next one's finished we should be well into the new currency regime and they'll be able to use the investigation as 'shining the light on how the west was fucked by their central bankers and half a dozen bullion banks'.

Wed, 11/20/2013 - 11:11 | 4173321 RockyRacoon
RockyRacoon's picture

Good luck finding 1 oz gold American Eagles at the typical premium.  I'm seeing a 10% premium in most markets.  So....  Demand speaks.

Wed, 11/20/2013 - 13:07 | 4173792 Moe Howard
Moe Howard's picture

Go check Provident rocky even though they are screwed up like always on fast moves it is still just barely over 5% premium. Should be less, if you call them. The page can't keep up.

Wed, 11/20/2013 - 15:56 | 4174687 Thisson
Thisson's picture

Use BullionDirect's Nucleo Exchange and you won't pay retail rates.  Eagles are currently about $50 over spot (4% premium).

Thu, 11/21/2013 - 16:36 | 4178768 RockyRacoon
RockyRacoon's picture

A buyer has to consider Gross Cost, which includes the shipping/insurance that is required to get the coins in hand.   Some sellers are a bit over zealous in that regard.  The net price is not the cost.

Wed, 11/20/2013 - 17:51 | 4175200 TheRedScourge
TheRedScourge's picture

Up next: new story from Reuters or CNBC about more tungsten-laced gold being found in some vault.

Wed, 11/20/2013 - 10:04 | 4173123 Mr. Magoo
Mr. Magoo's picture

Desperation requires EXTREME measures

Wed, 11/20/2013 - 11:04 | 4173296 Svendblaaskaeg
Svendblaaskaeg's picture

I'm doing a lot of something

Wed, 11/20/2013 - 08:51 | 4172934 HardAssets
HardAssets's picture

<delete>  opps, Bart Chilton already sarc'd in posts that follow below

Wed, 11/20/2013 - 09:03 | 4172960 DanTak
DanTak's picture

1500 contracts and only 8 points lost. Not too much I guess.

Wed, 11/20/2013 - 10:59 | 4173281 debtor of last ...
debtor of last resort's picture

Deminishing returns...

Wed, 11/20/2013 - 10:57 | 4173271 TheGardener
TheGardener's picture

They said the confiscated Silkroad Bitcoins will not be sold off.

You have been told.

They will use their loot to show you what a "market" could be like if .gov starts playing and TRADING with itself back and forth . No need to re-hypothecate .And now add just some really desperate flight money out of China and you can manipulate a currency UPWARDS too, towards discrediting it.

What about gold getting close to 2000 $ ? What if, for Christ`s sake, gold had some equilibrium fair value sometime into the new normal and they said : fair enough, all suckers and doomsters on board the Arche Noah , lets float .

Wed, 11/20/2013 - 11:22 | 4173347 TheGardener
TheGardener's picture

P.S. - post scriptum , the Swiss thought they are the coolest cat in the alley for sitting on a mountain of foreign cash they
could live of at but in the end they too succumbed to even cheaper money. In the old world, having your own strong economy and currency was more than just another asset.

Today the very same thing is considered a liability !

Now they sit on an asset less mountain of debt and a combustible currency and a society that considers herself rich in visual decadent deformation .

Wed, 11/20/2013 - 08:28 | 4172878 ParkAveFlasher
ParkAveFlasher's picture

We can't let the Chinese win the game, can we GZG?  Even if the ship is scuttled in the process.  That's what our whole economy is right now - a scuttled ship.

Wed, 11/20/2013 - 08:31 | 4172885 CheapBastard
CheapBastard's picture

"If you want to keep believing in Fiat, then you can keep believing in Fiat."

Wed, 11/20/2013 - 08:49 | 4172935 max2205
max2205's picture

Where's those good old up and down $200 days?

Wed, 11/20/2013 - 10:23 | 4173169 OneTinSoldier66
OneTinSoldier66's picture

I thought everyone already knew, Bitcoin!

Wed, 11/20/2013 - 08:34 | 4172895 El Hosel
El Hosel's picture

Bart Chilton just stepped in to assure "Orderly Markets".

Wed, 11/20/2013 - 08:42 | 4172913 Keyser
Keyser's picture

I trust no one that still wears a mullet after all these years. 

 

Wed, 11/20/2013 - 08:50 | 4172939 max2205
max2205's picture

Remember he said he made tons of money from dark pools.....hope he is in one face down

Wed, 11/20/2013 - 09:07 | 4172966 Nothing but the...
Nothing but the truth.'s picture

If only all those paper shorters were  all forced to deliver the physical stuff. It would seem that until that happens the paper gold and silver markets , are also in huge bubble territory. Any thoughts ?

Wed, 11/20/2013 - 11:01 | 4173291 Groundhog Day
Groundhog Day's picture

bring it down 800-900 pppllllleeeeaaaassssssseeeeee!!!! so i can rid myself of fiat

Wed, 11/20/2013 - 11:44 | 4173460 tocointhephrase
tocointhephrase's picture

I would prefer zero, just saying

Wed, 11/20/2013 - 08:25 | 4172872 SoilMyselfRotten
SoilMyselfRotten's picture

Could this be the smash the gold traders were talking about(last week) before the flip? Thinking its not a sharp enough of a drop yet.

Wed, 11/20/2013 - 08:33 | 4172890 El Hosel
El Hosel's picture

.... The Gold smash started about three years ago, when the Boyz got liquid enough to rig and control "Every" "Fucking" "Thing".

Wed, 11/20/2013 - 08:44 | 4172923 Carl Popper
Carl Popper's picture

The schemes of man are temporary.

Nothing lasts forever, except gold.

Wed, 11/20/2013 - 09:15 | 4172992 trader1
trader1's picture

128Te - isotope with the longest half life among all radionuclides,[9] which is approximately 160 trillion (1012) times the age of known universe.

Wed, 11/20/2013 - 09:45 | 4173071 He_Who Carried ...
He_Who Carried The Sun's picture

... and the contents of your wallet, I suppose...!

Wed, 11/20/2013 - 08:45 | 4172928 SoilMyselfRotten
SoilMyselfRotten's picture

I'm referring to an article last week on SilverDoctors that talked about a final smash before a V turnaround.

Wed, 11/20/2013 - 08:58 | 4172952 HardAssets
HardAssets's picture

Well, there's been a lot of talk of 'the bottom' and 'final smashdown' before a run up to new highs for the last few years.  I find it better for my sanity not to pay any attention to that. We have PMs for insurance.

Wed, 11/20/2013 - 09:05 | 4172963 greatbeard
greatbeard's picture

>> I find it better for my sanity not to pay any attention to that.

I'm focusing on hoeing my turnips.  I used to check the metals several times a day, now I find myself avoiding reading sites that have a daily metals chart on them. Unfortunately, I'm somewhat addicted to reading the comments section of ZH to maintaining some grip on reality (now ain't that a stretch?) and, unfortunately, that is where I'm quickly alerted to the latest smash down.

 

 

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