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Gold Hammered Down In Sunday Night’s 2-Minute, $2.7 Billion “Unprecedented Attack”
Gold Hammered Down In Sunday Night’s 2-Minute, $2.7 Billion “Unprecedented Attack”
- Gold market comes under “unprecedented attack” - Telegraph
- “Sharp drop bore similarities to bear raids by Chinese funds” - FT
- Paper contracts for 57 tonnes of gold dumped onto market in two minutes
- Gold still holding up in euros, Canadian dollar and other currencies
- Very negative sentiment towards gold signals close to bottom
- Physical gold still vital financial insurance despite simplistic anti gold narrative
FT Front Page Today - July 21, 2015
The post mortem continues and many are once again proclaiming the death of gold … as was done in 1999 and again in 2007 … prior to the start of gold’s multi-year bull market and the resumption of the bull market in 2007.
Sentiment is as bad as we have ever seen it and worse than in 2007, after the price of gold fell nearly 5% or $50 with many markets closed and in illiquid market conditions on Sunday night.
Some $2.7 billion worth of gold futures contracts were sold on the COMEX in less than two minutes.
The Financial Times had an interesting article with the wonderfully-balanced headline, Gold bugs squashed by aggressive selling, which speculated that “Chinese funds” may have been responsible for ‘bear raids’:
“Traders and analysts said, however, that the nature and timing of the selling suggested there was more at play than investors responding to a slight strengthening in the US dollar or lower central bank purchases.”
The Telegraph too asked questions about the highly unusual nature of the concentrated selling and described it as an “unprecedented attack” by “speculators”:
“Powerful speculators have launched an unprecedented attack on the world gold market, driving prices to a five-year low … anonymous funds sold 57 tonnes of gold in Shanghai and New York, choosing the moment of minimum market liquidity in what appears to have been a synchronized strike intended to smash confidence.”
While the price recovered somewhat throughout the remainder of the day, the manipulative hammering of the price in the futures market once again has served to undermine confidence in the gold market in the short term.
Paper contracts, the equivalent of 24 tonnes of gold were dumped onto the Globex electronic trading exchange in New York in less than 2 minutes. The action took place at around 9.30 Shanghai time. Japanese markets were closed ensuring a minimal amount of liquidity and potential buyers to support the price. There is some discrepancy in the figures reported by different analysts and media.
Astute analyst Bron Suchecki of the Perth Mint points out that the selling began on the COMEX in the August futures contract:
“Below is a 1 second time interval chart of the August futures contract from Reuters. The area in the red circle is the 4 seconds of the Nanex chart above, which puts the move into context.
Note that the volume traded in this one minute was 7,164 contracts, which at 100 ounces a contract is about 22 tonnes.”
That a single entity or a group acting in concert would choose to sell a position in huge volumes at a time when an absence of buyers would guarantee them a poor price is a sign that forcing down the price was the likely objective of the concentrated selling.
Who these “anonymous funds” may be is unclear - the Telegraph describes them as “speculators”. There appears to be little appetite to uncover who they were among the media. Hopefully, financial regulators will see the importance of stamping out such illegal practices.
Already financial markets and the financial system have all the hallmarks of a global casino and this is likely to worsen if such manipulations continue to be tolerated.
Close observers of the gold market will have noticed a slew of particularly negative, and often ill-informed, commentary on gold in recent days and sentiment is as poor as we have seen it.
Since yesterday there has been another of wave of negative, misleading and almost triumphalist commentary on gold most of which studiously ignores the clear evidence of manipulation of the price on Sunday night.
This negativity is unwarranted given the reasonable performance of gold this year in currencies other than the dollar. Even following the smash gold is up 4.4% in euros this year. It is also up in Australian and Canadian dollars - not too mention in Latin American currencies which are again under pressure.
The current negative sentiment towards gold is unjustified given the backdrop of gobal currency debasement and a global economy being force-fed debt to keep it a very fragile recovery from ending and a new global recession or indeed Depression.
Further, technical damage has been inflicted by Sunday night’s manipulation and prices may yet fall further.
However, given the importance of diversification and of holding physical gold as financial insurance - rather than as a speculative tool - the current price weakness may be viewed as an opportunity.
The conditions which led to the 2008 crisis - i.e. excessive debt - have not been dealt with.
They have been papered over with more electronically ‘printed’ currency and debt. The narrative that gold is now irrelevant because the “recovery” has taken hold is not reflected in the conditions of people living in the real world - be they people in most Middle Eastern countries, the majority of people in Ireland, Spain, Italy, Portugal and of course Greece. Nor indeed, the 45 million Americans, 15% of the U.S. population, currently unemployed and having to live on food stamps.
The notion that gold is set to decline further as the Fed raises rates is based on the highly optimistic assumption that the Fed will actually raise rates voluntarily and not continue to defer doing so until forced to by circumstances.
At any rate, the historical record shows that gold tends to rise with nominal interest rate rises - as was seen from 2004 to 2008 and in the 1970s - and the Fed are unlikely to raise rates in any meaningful way while deflationary forces persist.
We advise clients to ignore the noise and pay attention to the factors that caused them to diversify into gold. These conditions have actually deepened in recent years.
Physical gold will protect wealth in the event of banking crises, bank bail-ins, systemic crises caused by cyber warfare and other risks that ourselves and well placed commentators have highlighted in recent months
Must-read guides to international bullion storage:
Essential Guide to Gold Storage in Switzerland
Essential Guide to Gold Storage in Singapore
MARKET UPDATE
Today’s AM LBMA Gold Price was USD 1,108.00, EUR 1,021.15 and GBP 711.47 per ounce.
Yesterday’s AM LBMA Gold Price was USD 1,115.00, EUR 1,029.17 and GBP 717.41per ounce.
Gold fell 3.2% to $1103.20 per ounce and silver fell 1.2% to $14.71 per ounce.
Today, gold in Singapore was flat, prior to gold bullion in Zurich ticking marginally higher.
Silver for immediate delivery rose 1% to $14.90 an ounce. Spot platinum rose 0.6% percent to $989.5o an ounce, while palladium fell 1 percent to $611 an ounce.
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What was the change in the price point on the gold index from the beginning of the volatility skew at the end of July 2010 to the end of the contract in July 2015?
~$400/oz.
http://schrts.co/Roq4OH
Silver flash crashing right now at 2 AM. WTF
Hammering my new gold ring from some junk gold I have laying around.
Has no one even considered the possibility of a couple very large Chinese margin calls? When you get the tap on the shoulder, real stuff must be sold to settle the debt.
Asia open on Sunday and end of cash close on Monday both would be times where someone would be forced to sell with backs against the wall.
My business is bullion and I buy much of the manipulation, large short pile drives down to buy on the way up arguments etc...
But the two big market moving events this week could very well be harbingers of much bigger breakdowns in non hard asset markets.
I didn't buy at the peak and I didn't buy at the bottom. But at least I bought.
Dunno Bro.....
Been hearing the bottom is in for 3 years now.
Riddle me this batman....
What happens if we get a 20-40% stock market correct and the margin clerk is running around like a headless chicken?
Gold is an asset like everything else. If you get a call from the margin desk for more captical, the gold gets sold....like everything else.
I don't think we're done yet.
Squid
That's why gold crashes when the market crashes. I don't understand why people on ZH are so concerned about a gold crash, if they are not trading it. If they are truly long-term holders for end of times purposes, then why all the concern over manipulation? That would seem to be a buying opportunity.
"Already financial markets and the financial system have all the hallmarks of a global casino and this is likely to worsen if such manipulations continue to be tolerated."
Tolerated? TOLERATED??? Governments NEED them to continue!!!
A medium of exchange for the purchasing of goods and services that used to have an intrinsic value brought about by being backed by GOLD
Fiat money a medium of exhange for .....................................................that has its intrinsic value based upon a Gov. 18 trllion in debt and the good faith and support of the people
What makes anyone think the CRIMEX is going to change? It wont be until there is a massive shortage or a new market that opens up to take over or compete with the CRIMEX.
Otherwise the digits on your screen are just going to keep going lower.
Didnt u goldtards say trading in Shanghai would end gold manipulation? Now its blamed for manipulation.
Money, a convenient medium of exchange for purchasing products and services that used to be backed by a precious metals to give it a more intrinsic value.
Fiat Money: a convenient medium of exhange for the purchasing products and services back by the trust and faith in the Fed reserve under the supposed oversight of a Government 18 trillion dollars in debt..
let this be a measure of how badly those with printing presses want it.Its a scheme that has caught on and nearly every central bank is doing it now. We are being flooded with short contracts to the point that the world will drown in them. Its all about the mine production really.
Interesting that the people who foresaw one final push below 1000. They don't sound too far off now.
They were wrong. the bottom is in. The reason for the team effort to make a temporary lower price, which is the "attack"; that the article refers to, is to provide an opportunity for the market makers, the so called, "locals"; to buy the contracts at the new "manufactured" lower price; it is therefore a bullish signal. These people know much, much more than any of us can ever know about this market. They now have many, many contracts that they bought far below the market price; they wanted them in t he first place, because they know that the underlying will soon break out to the high side; they just increase their profits by creating the artificial low to buy in at. This is classic. It's been this way since 1812, that we know of; when Lord Rothschild sold British Govt. Bonds on the exchange to drive the price down; because of lhis prestige, everyone believed he had inside knowledge; he did have inside knowledge, to the effect that the bonds would soon sell for much more; but he drove the price down and bought them all up at the bottom. It is therrefore a buy signal.
What gold was sold?
None
This is all PAPER contracts - and i'll bet they never stand for delivery ... so this is not gold activity.
The price of the paper contracts will go to the true value of paper - zero.
When miners stop mining, because they can not reasonably use the paper markets to forward sell their production, the paper markets become all paper - and never have delivery. At that point, the paper contracts can have any price you like associated with them - and that is basically just gambling against the moves the CB's and their agents make.
I know I would not sell gold at the price currently set by the paper markets ... and if that sentiment becomes widespread, we will see some other place or places emerge that provide price discovery.
Comex and LBMA will probably linger on, but become less and less relevant to the physical gold world.
This was nothing more than Germany selling the gold (formerly) belonging to Greece. Someone has to fund the ECB EFSF bank, and again it is Greece, so they can get 'some' of their money back.
Round and round we go.
Well I guess I can't sell my 24 tones of gold today.....
Gold is very valuable. As jewelry. Probably somewhere in the neighbourhood of $800 per oz. perhaps slightly more.
It's traditional role as a store of value has been replaced by the ability to e transfer wealth anywhere worldwide in seconds. Dollars to Euros to Francs, etc. No need for shiny bricks any more. $1,000,000 to Swiss Francs or perhaps German bunds? No problem.
Time for gold bugs to move on.
I don't know, My wealth is tied up in heavy earth-moving machines, and corn. How would I etrade this?
Is it just me, or does someone else remember seeing that first line in posts around here for the last 4 years. This dollarbug is either an old troll or using the old troll's playbook.
You're a FED stooge, zeronero. Get lost.
Yep:
Gold slamming in the comments - is this a new phenomenon happening now on ZH?
The propaganda machine must be running full steam ahead, the MSM just declared gold dead and useless and even on ZH the paid shills are showing up.
Despiration
You fiat bugs crack me up.
And being hammered down again as I post this.
Money is a symbol for real value. Food has real value, money can only represent that value. Because it is symbolic, it can represent the value of nearly anything: food, housing or services. Money is fungible, which is why it is so useful.
Not all money is created equal. The vast majority of money in our society is in bank accounts, which is not money in the classic sense. It's debt owed by the banks to their depositors; it's an entry in their books, nothing more. Every transaction using bank money requires the bank be invovled. They know who the buyer is, and who the seller is, the trasnaction is not complete until the bank makes the 'transfer'.
Tangible money, like paper money and coins has nothing to do with any bank. The transaction is between buyer and seller; it is annonymous with no bank invovled. It clears totally and immediately, no subsequent action is required by either party. When banks go on holiday, paper & coins still work just fine (see Greece).
However, paper money still requires trust in the government that prints it. It you don't trust a government you might not consider its money 'safe'. Its value may drop precipitously without warning. This is when you need gold. Gold is not any goverment's money, it is mother nature's money: eternal, tangible and utterly fungible across all cultures and money systems. As money gold's value is still symbolic, which is why people say "you can't eat gold". Try eating bowl of quarters with milk and sugar, or a salad of dollar bills ... same thing.
However, gold has NEVER lost all its value in the 5000 years its been money, whereas EVERY form paper money eventually goes to zero. Oh yeah, bank money is worthless to begin with.
600 plus currencies have come and gone. Gold still here with some saying it isn't worth anything except for jewelry. Hmmm, I guess all those governments or bankers didn't try everything they possibly could to keep their currencies from being laid to rest in the fiat graveyard.... the record of success isn't too promising.
Yi Gang, Chinese Deputy Minister for the CB has spilled the beans...China has not bought it's gold levels up to where they want it BECAUSE THE MARKET IS TOO SMALL!!
Translation. If China tried to buy all the gold it needs to bring it's holdings to a level with the US and the Euro it would explode the market. If gold were to suddenly jump to even say $5,000 that would reflect poorly on the dollar. China is playing nice....for now. It does not want to be accused of destroying the dollar (which it could, easily) so it only buys in small quantities....for now.
When China decides it no longer wishes to play in the $IMF sandbox, all it has to do is try to buy a few hundred tons all at once. This would drive the price sky high....and really piss off the USA. In fact all CBs are cooperating for the time being. When the dollar dies it willbe a real mess. Yes the CBs would lose their dollar denominated assets but those with gold would easily do better than break even. The EZ has over 10,800 tons. The ECB's #1 asset is gold, Treasuries are #2 (no pun intended.)
But do not worry, the banking system still reports they have just under 700 tons in the GLD ETF. That could be gobbled up in a day...but don't worry...it won't be...right?
The old circles of power - maybe Europe wins and the USA loses after all?
Have our glorious US leaders ever acted in the interest of the general populus? Are they to be trusted?
Why sell off everything you have in Fort Knox? Don't tell me they really believed printing money would solve any problems and Gold would forever stay irrelevant.
My investment in the ponzi, real estate, is doing quite well with a well over 300% gain since 2009. My investment in other hard assets has not done as well however when the real estate crashes I expect those other hard assets to act as a great insurance poicy.
To me, this is not a problem. I accumulate gold, not for 'profit', but as insurance. I have several insurance policies, and I don't expect to make profit from them. I put them in place so that they will be there, IF I should need them. If it turns out I don't, it's money gone. But I have never considered that a "loss", any more than I consider much of the money I spend as a loss, because I purchased something with it. In this case, I purchased insurance.
It would be like bemoaning all the money I 'lost' paying homeowners insurance, and wishing my house HAD burned down so I could collect...that would be pretty stupid.
So go ahead, make my "premiums" even cheaper, it's all good. And if I never NEED the insurance, at least I still have the gold itself, which will retain some value.
The greed of short-term 'investors' and the stupidity of central planners creates a rare opportunity for those of us who have always valued gold, but found it too pricey before.
No REAL stacker is complaining, I'll tell you that. We are laughing out loud. All the complaints are coming from traders who are po'd they can't scoop up short term profits, so they're doing the sour grapes routine.
Keep stacking! The desperation is palpable...
1 oz platinum (6yr low) and 50gm gold ! MOOAAAR!
The regulators and politico puppets work for the banks.
The financial times is a Rothschild propaganda outlet.
The "speculators" were the ziogangbangkster cabal.
No one will go to jail.
"Close to the bottom" -- I've been reading that on PM sites for two years.
It would be notable to mention the eBay prices, as these ar the offers to the smaller investors. In the US, Frank-Dodd has a major impact at the $250k level, as required reporting is mandated. Collectable coin hasn't seen a major down turn, yet.
Even backdates AU bullion AGEs are doing quite well on ebay.
The Telegraph is full of shit. Powerful speculators? Comical and absurd.
At least ZHers are keenly aware of "who they are". Those orders almost certainly come from the NY FED and the William Dudley, carried out via their bankster buddies at Citi, JPM and the Squid.
"Unprecedented?" or part of pattern for years now?
[. . . and how about an article on Citi's unprecedented commodities derivative postion]
Concerning Citis derivative position: those "journalists" and "reporters" seem to miss out on this special detail - coincidence?
Smoke and mirrors, the sheep will get properly fleeced this time after they sold all their gold at the bottom. One ugly shitstorm brewing here.
I was wondering if there was some bad news coming -- and now we have a wave of shitty earnings on top of increasingly darkening numbers for the economy. They don't want people bailing into PMs, that's for sure.
Citi is walking dead. Equity holders were wiped out long ago, now its just another criminal arm of the corporate fascist state run by pencil dick zionists set on looting whatever wealth remains.
So they got tasked with the final kamikaze waves?
Aptly put.
What is money anyway ?
We'll find out if a big enough solar flare or emp wipes out our power grid for a decade.
without money there is no honey
This is what's wrong with gold in a nutshell: https://www.youtube.com/watch?v=BiXIs3bbETA
OMFG.
DOLLARS are money.
Just ask any compnay what happens when the slash their dividend.
"An orderly restructurimg of assets" in present day USA is very hard now too.
When we had a gold standard this was not the case...as bankruptcy was the norm not the exception.
Speculations were indeed quite common then too.
Again...BEWARE THE DEBT HOLDER.
You might think your gold is the Deathstar here...but "it is insignificant next to the Force that backs up the solvency of many an institution."
Cash markets seem okay interestingly...so getting that two week loan "after the Christmas Rush" should be okay.
That was where the 2008 collapse started though folks...commercial paper market also known as the "payday lender for industry."
If interest rates do indeed normalize this Fall however...