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Goldman Head Gold Trader Speculates About "Authority" Intervention In Gold, Sees Precious Metal Pushing Higher
From Goldman's head gold trader Zak Dhabalia (i.e., someone that can not be found on 360) who says what only fringe blogosphere dares to speculate: namely that central banks and/or metals excahnges (CME/LBMA) openly intervene at key inflection point to slam the price of gold down. More importantly, according to Zak, now that the latest "authority" intervention has been priced in, it is up, up and away for the yellow metal yet again.
From Goldman Sachs
Coming back from vacation probably wasn’t such a good idea after all….The gold market is clearly moving into a new dynamic from an orderly market rally to a disorderly market rally. The strong feature of the last 3 years was a relatively steady up move accompanied by declining option vols. This gave encouragement to investors to accumulate gold without a fear of dramatic price risk and from a risk adjusted asset allocation perspective the relative merits of gold were improving against other asset classes particularly for those that view and compare gold against currencies. However since the beginning of August the price spike has been accompanied by higher vols which have accelerated again this week as 1 month reached mid 30s. There has been some rather disturbing price action in the last 48 hrs creating extremely challenging trading conditions.
After rallying nearly 100 usd last week from 1795 to 1895 with demand coming from the official sector and some leveraged players rebuilding length following the severe prior correction we traded to new all time highs of 1922 on Tuesday shortly before the Swiss Franc intervention. The immediate aftermath was in complete contradiction to prior recent episodes of intervention and what anyone would have expected. Instead of spurring a further gold price rally on the basis that it was one of the few remaining safe haven “currencies” we saw a 50 usd collapse in minutes. The source of this flow seems hard to pin down with some speculating over whether “authorities” were concerned about the signals of an accelerating gold price and its impact on other fragile markets. Soon after, much of the losses were recovered but the psychological damage had been done and there followed a series of liquidations from within the leverage space with gold closing down 50 usd on the day. This was then exacerbated by a near 60 usd flash crash within 2 minutes during the Asian session.
We have since traded down to 1795 yesterday with talk of technical damage (double tops etc) but recover to 1840 this morning. Despite the fact that discretionary leverage positions are significantly lighter there is still heaviness of CTA type positions that can be reduced. However official sector activity, and PWM is already using this latest dip to re-accumulate and it may be the case the market is already close to clean positions at ever higher prices.
From a technical perspective minor support comes in at 1795 with more significant support at 1705. Above, the double top area of 1920 takes on much more significance. Despite the much higher vols we are happy to own short dated 1-2 mth high strikes more than flat price positions in the current environment.
Good luck
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Fookin A+ Dude, carry on.....
Damn, Slewie,
I'm glad you're here---a great night of posts---thanks so much.
This Norwegian thing is most interesting because it opens up the ugly box the feds have been covering. I'm confident that they thought they would lose this case or have it thrown out by an appeals court, but now Norway has made this a whole new game---and maybe in their courts(I'm still not knowledgable about the jurisdiction issues, any idea?)
Anyway, this could be a pretty exciting match to watch om
Good call on GATA, Slewie. I monitor GATA like I do ZH. Both are all over it.
hey gwar! thxz!
this "news" is old, tho: china's recent "wikileak from the US Embassy" is from 2009, the russians were quoting GATA in 2004, and ted butler & david morgan have probably seen their kids go from diapers to grad school since they've been trying to get the CFTC off it's asses and be willing to look at wtf is right in front of their eyes and they still can't see it!
it's like tyler and nanex: after 3-5 months of pretty damned good reportage (with a notable exception or two) on the hi-freeks, the SEC may look, too! at least they're gonna see what those "programs" do! not the people, the programs!
after many complaints, they looked at bernie madoff, too didn't they? than they gave him a clean bill of health, too! ooops! bernie didn't look like a ponzi artist/criminal; he was too freaking rich and respectable!
here's the link to trader dan's commentary yesterday: Gold Seeker Closing Report: Gold Falls Nearly 3% While Stocks Gain Over 2%
again this is yest's report, not today's. at the bottom of his commentary you'll see chart which is a link to evidence. admittedly, circumstantial, but nonetheless, admissible in a court of LAW
how much effort would it take to find out who made those "co-ordinated trades"? even if only one trader, what would his/her phone and email records indicate? the more traders the better for busting them, but for pete's sake! how hard is this?
how many bullion banks trade on the crimex as members? 5 in gold and 5 in silver, and here's their inventories as of yest: DJ Comex Gold And Silver Warehouse Stocks-Sep 7
here's todays gold delivery intentions and monthly total: DJ Comex Gold And Silver Warehouse Stocks-Sep 7
ditto for silver: DJ Comex Silver Delivery Intentions Breakdown - Sep 8
oopsZ!
sorry!
here's the gold deliv intentions: DJ Comex Gold Delivery Intentions Breakdown - Sep 8
jeeeeezZZZ how does jay-dub do it?
If the dollar had not gained a nickle on the Euro in the past week, gold would be over 2000. When Ben gets his game back we will see appropriate elevations of gold prices.
Probably their clients were Dennis Gartman and Nouriel Roubini...
Just started!
Tribute Memorial to the Liberty with the crew on right NOW at:
http://republicbroadcasting.org/
LISTEN NOW LIVE!
PASS THIS ON PLEASE.
I dumped all of my gold because CNBC told me I couldn't eat it and it earned no interest. As a result, I don't have any money left to eat and I don't have any money left after my CNBC-induced BAC trade went bad so I can't earn any interest. Now what to I do?
stateside
http://www.statesidereport.com
shoot yourself for being so stupid?........
Suicide's not the answer. Homicide is. LOL
Yeah, why end your life when you can get rid of some garbage?
+ 9 mm
AND vote for Ron Paul on this poll now too:
http://www.msn.com/
Wht gold owner in their right mind would want gold backed curreny look at the price of gold as a currency peg. Ron Paul rediculous notion that gold should compete with the dollar as currency is a mote point gold already competes with currencies every minute of the day and gold is winning . The last thing a gold investor should want is to have gold pegged to a currency by aa corrupt government.
Ah, it's a profit deal.
- The Jerk
Are we ready for PAGE to open or what? Will this be hype and just another exchange? I've seen the interviews as many of us have, but I just don't have a feel for the net result.
Dow:Gold ratio reaches 1:1
This is the kind of short-sited bullshit analysis that gets people burned. Gold is a "long term" investment. Sure, you may be able to make 2,3 or 5 percent on a short-term (i.e. buy and hold for a couple of days) gold trade. But long-term (as in a couple of years), the return is much greater. And on an even longer term (10-20 years), gold will be the best performer (assuming the central banks continue their fiat currency war ... which basically a given at this point). Not to mention the fact that gold will weather any monetary crisis, assuming it isn't confiscated first. People are just refusing to acknowledge the totality of the situation we're in today. We are on the cusp of probably the greatest disaster people have experienced in the past century or two, thanks to the great globalization of economies. It is just shocking to me that an educated and experienced broker can be this short-sited with his analysis.
Sounds good!
This is trending, so we'll do this 1960's style:
http://www.youtube.com/watch?v=U1TmeBd9338
http://www.youtube.com/watch?v=Fy_PJODH3p0&feature=related1
And then hit it into the 70's when Nixon hit it out of the park
http://www.youtube.com/watch?v=I6iksKTURlA&feature=related
Green arrow - continue
Red arrow -http://www.youtube.com/watch?v=ZaGd2Uivs24&feature=related
Bought a maple oz and 20 silver eagles yesterday. Even though I swore I'd wait till the grand TOTUS reading tonight and the Bernank talking points had settled. Today I'm ahead.
I think most here would agree that JPM is a criminal appendage of the FED, same with GS. So FED=GS=JPM or bankster cartel. Now "crash JPM buy silver" has priced gold @ $2500, GS @ $2000. My belief is these banksters are trying to set the ceiling. They Know they can't win, so get ahead of it.
crash JPM buy silver
Oh my God! They're out to get you guys! They're everywhere and doing everything possible to get you. I'll bet they're outside your home right now. Do you get the feeling you're being followed during the day? Better keep a constant eye on you back!
I wouldn't trust this asshole farther than I could throw him. Goldman Sachs....they would screw their own grandmother if they could make a buck off it.
ghadaffi regime sells of $1B gold reserves in final months , say new libyan central banker....ft.com
Beats the $1 bill that GS managed to lose in a time when they had only 3 loss trading days in the year.
That's just... upfront fucking chutzpah1
Kirk: Mr. Scott, please explain the new "TARP Drive" device just intalled on all the FEDeration Starships.
Mr. Scott: It's simple, sir. We just inject superheated gold plasma directly into the dilithium chambers. The power increase is exponential. Tarp 1 is at least 100 times faster than Warp 1. We can now travel farther, faster, and interfere in even more alien cultures than ever before. In fact, it is SO fast that anything above TARP 2 is useless, because space is ultimately circular, and we instantly end up in the same place we started.
Kirk: Is the gold recyclable?
Mr. Scott: Unfortunately, no. The process transforms gold into its anti-matter state. Any attempt to retrieve it would result in instant anniliation of everything within 10 parsecs.
Kirk (with a wry look on his face): The FEDeration must be delighted in many respects.
If you're a fan, tie that into the new Scotty transporter retcon, and I'll be impressed.
I find Goldman the second best contrarian indicator, beat out only by Cramer.
"...from a risk adjusted asset allocation perspective the relative merits of gold were improving against other asset classes"
I think he means volatility-adjusted. Volatility does not equal risk. Particularly when you're considering price volatility of something you can store at home in bars or coins.
Does Fraudman Suks still have a 1500 target on the S&P by the end of the year. When I see the fascist controlled media start pumpim gold hourly I have to think they are trying to load the truck and drive it off a cliff.
I think that's where dollar cost averaging comes into play. Or something like that. I'm not going to stop buying if the price plummets, and I'm not going to sell either. Owning gold isn't the same thing as gaming paper contracts for worthless dollars. It's about owning a world recognized wealth asset, and if a cliff is provided for the price to fall off of, I will follow it right down.
Nadler Here!!!!!! Ive been in close contact with with certain individuals who will remain anonamous and I have been told that the best option for gold bugs is to give there gold to the authorities for safe keeping, best place will be at the FR bank vault in NYC that will be the best option
All your news are bullish for Gold.
But then again, I eat Gold-plated iPads.
Should ZH start publishing from time to time why it's the greatest time to SHORT gold?
Just for the sake of entertaimnet, to give reares something to dream about. That such a wet dream: the whole word been long gold and suddenly wakes up and see its dropped 150$
Is there is any, any reason why it won't? Absolutely no reason not to drop and it will.
I personally can't laugh any more on those "end of the world, buy gold, stick it to your ..." screams.
It's time to short GOLD, bitchez!
With all other interventions discussed...heck why not... every other curriency is managed by central banks of some sorts, why would they not attempt to manipulate gold as it is the oldest alternative to what they peddle as money? Interested to see who else mentions this after GS does...
I've been reading and learning from ZH for quite a while now but this is my first post. I see the evidence of manipulation every few days but I still don't really understand why they do it. I can understand inheriting a bad position from Bear Stearns (a huge short position) and trying to trade out of it -doubling up - then re-doubling and so on - but they just seem to keep adding to their shorts ad infinitum. Where do they think they are heading? Yes, OK, I can believe that they make a few million every time they force some weak longs out because stops get hit when they slam the price down, but the price always seems to go to a new high eventually (still waiting for that with silver, but it will come...) by which point they are even more short than they were before the monkey-wrench attack. So how does this help them? Is their ever increasing paper loss meaningless to them because they know that there is aways another round of bailouts on the horizon? And how does it work in practice? Is a junior trader told to drive the price to a certain target - and told that they go short another, say, 4,000 contracts in order to do so? Or does the junior trader have to keep 'phoning a boss to get permission to sell another 4,000, another 4,000 etc. And when it's a central bank selling gold to drive the price down, why would they do that? In the current climate, isn't selling part of their gold reserves going to leave them worse off, not so far down the road? If they sell 5 tonnes to drive the price down do they really think they are going to be able to quietly buy those 5 tonnes back again more cheaply, when other central banks (Mexico, Russia, China, Nicaragua etc) are making it clear that they are wanting to build their reserves? If I was a Central Bank I would be wanting to compete with the other CBs to buy more gold - I wouldn't want to be the ninny given the job of selling it, especially as someone said above, at a less than best price in quiet trading hours...
And if I was Switzerland, why not use all of the dollars, Euros etc flowing in to my coffers to buy gold, whilst it is still under 2,000? What Swiss industry would I be worrying about trying to protect from the effect of a high franc? What do they make apart from cuckoo clocks? There main industry is banking, isn't it? Wouldn't a fantastically strong franc, and larger gold reserves, be a Good Thing?
gs & jpm ARE the fed. they try to convince the sheeple that the dollar - the bernanke dollar that they debase by the trillions - is still worth something, even as they give themselves (those) billions of fiat, made-out-of-thin-air dollars as 'bonuses', while most of the (trillions) $$ goes in to INFLATING stock prices - all at the expense of those holding dollars. (This is the equivalent of DILUTING your stock.)
Given that the usa government is totally, insanely corrupt - totally bought & owned by the criminal cartel - the only real meaure of steady value is PMs. And Switz - they are being LEANED ON by the USG, in the same way that Germany & Switz have been forced to pay out holocaust reparations over the past 6 decades.
Actually, (US) govt. by fraud, theft, & extortion (aka "financial terrorism") is nothing new - America, and the U.S. Constitution, were both founded IN SLAVERY. The slave owning founding fathers - including such sainted icons as Washington, Jefferson, Madison, Monroe - CLAIMED that slaves were "incompetent" to function as free men, a rationalization (used to justify EXTORTING the products of their labor out of them for rock bottom minimum pay) we now know is/was pure fraud. Indeed, the Constitution's FATAL FLAW is the slavery clause: IF YOU ARE DESIGNATED A SLAVE, you have ZERO rights!
And the Constitution DOES NOT SPELL OUT WHO gets to make that designation!
Gold soaring higher every day and booms whenever they mention "controls" "margin hikes" etc since people realize this means CBs are desparate and what do investors do? Buy even more of the Barbaric metal (driving Buffet & Munger to drink).
Where is the original source of this news?
If they are willing to attack and short the metals markets with your own money, causing you serious loses of capital and property, what else are they willing to do, and how far will they go? It seems the rule of law is completely out the window with these people, and they are perfectly happy to ruin you. They actually have the nerve to hire lobbyists and pay them with your freshly printed money so they can sink legislation that might make them more transparent. They are drunk with power and wealth, corrupt to the core. They have a guilty heart and don't want you to see their crimes out in the open. Repeal the federal reserve act, and send these evil creatures to jail. It's the free markets they can't stand, the markets are sending a signal that these idiots are wrong. Everything they stand for is a lie. The illusion is wearing very thin now, and we can see glimpses of their evil con game.
It was actually Jim Rickards who first ventilated this idea, 3 September 2011, by Eric King (King World News) Download MP3 From Site: http://kingworldnews.com/kingworldnews/Broadcast/Entries/2011/9/3_Jim_Rickards.html
Jim Rickards: "The way the FED could save the debt problem once and for all would be to conduct open market operations in gold.
I actually call it the Gold Open Market Zero rate Operation or GONZO for short.
What the FED will be doing in that situation, holding nominal rates at zero were they are now, going into the market and pegging the price of gold at say $5,000 and keep it there by basicaly being a buyer at $4,995 and seller at $5,050 and just maintain the price at $5,000.
All other commodities would instantaneously have to correct. Suddenly you see $300 oil, $100 silver.
Everything would move up and it would be sort of hyperinflation but it will be instantaneously hyperinflation.
Then you could put a lid on it by saying OK we did the spike, we went from $2,000 to $5,000 everything else adjusted but now we gonna lock it in there using open market operations.
And what that does of course is it cuts the value of the debt by more than half not just the government debt but all of a sudden your home mortgage and your car loan, your creditcard, you’ll be paying it back with cheaper and cheaper dollars.
The big loser in that, of course, will be China cause they have so much of our debt.
I don’t predict that, in terms of what the FED is going to do in the short run. I do state that’s we’re we going to end up because it is the only solution. Your dollars are worth less, your fixed income, your pensions are worth less
btw I am not advocating us there, going, there perfectly clear I don’t think it’s a good solution."