Increasingly Blatent Attempts to Suppress Gold Prices Are Evidence Of Desperation

Here are two graphics from Kitco’s 24-hour Gold Spot Chart, one from Monday and the other from today.


Today’s 24 hour gold chart:

(Notice three separate spikes in selling in the last 48 hours, all occurring at the end of Hong Kong trading session. Notice that two of these selling spike happen right at the open of the NYMEX. Finally, notice how gold prices start moving up after the open of the Hong Kong gold market (because of Asian demand).)

Monday’s 24 hour gold chart:

(Notice the spike in selling right before the Hong Kong gold market opens. Had the selling been delayed half an hour, demand from Hong Kong could have helped absorb the selling, giving the seller(s) a much better price and preventing gold from falling as much.)

My reaction: Someone is repeatedly dumping huge quantities of paper gold onto the market over very short periods of time. No profit oriented gold investor would act this way. A legitimate investor selling gold would spread his sales out to get the best possible price and would wait for the periods of the day where there is the highest trading volumes (ie: not selling right when the market opened).

If this type of selling only happened once in a blue moon, it could be explained by some institutions being forced to liquidate its trading positions. However, the odds of four different institutions being forced to liquidate their gold holdings at suspicious intervals over a three day period are next to zero.

Finally, Since long positions are limited in size on the COMEX, these selloffs are either the closely coordinated liquidation of several dozen long positions (why would investors long gold conspire to lose money anyway?), or they involve a massive wave of short selling.

See my other entries on manipulation of gold on the COMEX for more info:

Something Going Haywire In Gold Markets

Who shorted gold after fed's announcement last week?

How Governments Manipulate the Gold Market


Conclusion: Four massive unexplained spike in (short) selling represents a blatant attempt at price manipulation (trying to scare longs and trigger stop loss selling). It is undeniably a sign of desperation on the part of those trapped on the short side of gold.

Eric de Carbonnel

Market Skeptics

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Also by Eric de Carbonnel