This isn’t some trader’s “fat finger” accidentally overloading the
sell button and pressing “sell.” This is unadulterated BIS/ECB/BoE/Fed
sponsored market intervention:
At 4:01 EST, a paper gold nuclear bomb was detonated in the Comex
Globex computer system. The graph above is just the August “front month”
paper gold contract on the Comex. In that contract 1.49 million ozs of
paper gold were dumped into the Comex electronic trading system.
Zerohedge is attributing 1.88 million ozs. That would include the
selling in all of the paper gold contract months.
But that’s not the entire amount of the paper hit. There would have
been a large amount of LBMA gold forward paper gold contracts dumped in
correlation with the Comex paper avalanche. ZH attributes $2.2 billion
in paper gold dumped. But the real number including LBMA forwards
dumped was much larger.
“The mysterious plunge has the market spooked,” says some idiot named
Bob Habercorn from RJO. This was not “mysterious.” It was intentional –
a shock and awe market intervention that was intended to “spook” the
market. That quote is from a Bloomberg report full of fake news (
caution, this article contains fake news:LINK).
The article claims that China bought less from Hong Kong in May. In
fact, the amount of gold exported from Switzerland to India and Hong
Kong was up 39% from April, according to Platts. Furthermore, we have no
clue how much gold moves into China through Beijing and Shanghai,
numbers which are intentionally hidden from the world.
Here’s the reason that today was selected by the BIS et al to attack
gold in the paper market in an effort to scare the crap out of the
market:
the day was well chosen as the
Muslim world including Turkey was closed for the end of Ramadan as was
India which has the amiable habit of observing the holidays of religious
minorities
. – from John Brimelow’s Gold Jottings
Two of the largest buyers of physical gold in the world right now,
India + Turkey, were closed for the observance of a religious holiday.
And Shanghai closed for the day 31 minutes before the paper dump.
4:00 a.m. EST is one of the slowest, lowest volume trading periods
during any 24 hour period. Why would a seller of a large number of
contracts sell at that time of day, when the largest buyers of what is
being sold are not in the market at the time of the sale?
If it were merely a “fat finger” – the fake news narrative –
then the mistake would have been immediately corrected and the price
would have quickly recovered.
Anyone who buys the “fat finger” story is either tragically ignorant or hopelessly naive.
When India returns tonight to the market, I would expect gold to get a
strong bid. Indians have a habit of buying a lot more physically
deliverable gold than they might have otherwise when the western Central
Banks put gold “on sale” by lowering the price in the paper market. I
suspect Turkey and China will increase their appetite as well.
The mining stocks per the HUI barely acknowledge the artificial price
take-down. The HUI is down less that 1%. In the past, on a day when
gold was taken down to this degree, the HUI would have dropped at least
4-5%. It’s almost as if mining stock traders are laughing at the
latest Central Bank antics. I know I am…
|
Dave Kranzler spent many years working in various Wall Street jobs. After business school, he traded junk bonds for a large bank. He has an MBA from the University of Chicago, with a concentration in accounting and finance, and graduated Oberlin College with majors in Economics and English. Dave has nearly thirty years of experience in studying, researching, analyzing and investing in the financial markets. Currently he co-manages a precious metals and mining stock investment fund in Denver and publishes the Mining Stock and Short Seller Journals. Contact Dave at dkranzler62@gmail.com.
|
The author is not affiliated with, endorsed or sponsored by Sprott Money Ltd. The views and opinions expressed in this material are those of the author or guest speaker, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.
