The gold futures markets opened in New York on Friday 12th April to a monumental 3.4 million ounces (100 tonnes) of gold selling of the June futures contract (see below) in what proved to be only an opening shot. The selling took gold to the technically very important level of 1540 dollars which was not only the low of 2012, it was also seen by many as the level which confirmed the ongoing bull run which dates back to 2000. In many traders minds it stood as a formidable support level... the line in the sand.
Two hours later the initial selling, rumored to have been routed through Merrill Lynch's floor team, by a rather more significant blast when the floor was hit by a further 10 million ounces of selling (300 tonnes) over the following 30 minutes of trading. This was clearly not a case of disappointed longs leaving the market - it had the hallmarks of a concerted 'short sale', which by driving prices sharply lower in a display of 'shock & awe' - would seek to gain further momentum by prompting others to also sell as their positions as they hit their maximum acceptable losses or so-called 'stopped-out' in market parlance - probably hidden the unimpeachable (?) 1540 dollars level.
The selling was timed for optimal impact with New York at its most liquid, while key overseas gold markets including London were open and able feel the impact. The estimated 400 tonne of gold futures selling in total equates to 15% of annual gold mine production - too much for the market to readily absorb, especially with sentiment weak following gold's non performance in the wake of Japanese QE, a nuclear threat from North Korea and weakening US economic data. The assault to the short side was essentially saying "you are long... and wrong".
The areas circled represent the largest 'dumps' of paper gold contracts that I have ever seen. To reiterate Ross's comments, there is no possible way to explain those except as a concerted effort to drive down the price.
Such dumping is designed to accomplish lower prices, period, and that's the very definition of market manipulation.
(...)
There is really no chance to stand against players this large with a determination to drive prices lower. At the very least, I take the above evidence of computer-assisted declines of this magnitude to be a sign that our "markets" are completely broken and quite vulnerable to a crash. That the authorities did not step in to halt these markets during such a volatile decline, when they have repeatedly stepped into other markets and individual equity shares on lesser declines, tells me much about the level of official support for such a decline.
It also tells me that things are speeding up, and the next decline in the equity or bond markets may happen a lot faster than anybody is expecting.
Chris Martenson
articolo completo su: peakprosperity.com
Nessun commento:
Posta un commento