Just replying to your request. I bought this morning 100 ounces at 15.29. At these prices I would normally split my purchase into two on the 5th and 20th of the month, but its just too painful and I decided to just buy all of it now and ignore the price until the end of the month. I have striper fishing to think about 
If you've ever lived out of the country - Europe or Asia - you have a keen grasp of other timezones. That's because you end up chatting with your friends very late at night, or early in the morning. You are very aware that midnight for you means its noon in New York.
So regarding this 0030 dumpfest, that turns out to be 230 PM in the afternoon in Japan, and 130 PM in Shanghai. Rumor has it, they trade a whole lot of gold there in Shanghai. At least thats what I read over at Harvey Organ.
I'm not quite sure why people in the US have such trouble imagining that a few billion people are awake (and a number of them are keenly interested in trading - especially in gold) during the "wee hours of the morning." Perhaps some of us just never travel too far out of our timezones.
Try living on another continent, 12 timezones away from the Eastern timezone. Then, when you read about someone referring to "wee hours" trying to paint a picture of some sort of night-time financial Pearl Harbor attack, and you look at the clock and you see the sun shining and its straight up noon, maybe you'll realize just how hopelessly US-centric the whole thing sounds.
All I see is, someone most likely in China or Japan is dropping a bunch of shorts on the futures market. More than that, I struggle to see the significance of.
[quote=davefairtex]If you've ever lived out of the country - Europe or Asia - you have a keen grasp of other timezones. That's because you end up chatting with your friends very late at night, or early in the morning. You are very aware that midnight for you means its noon in New York.
So regarding this 0030 dumpfest, that turns out to be 230 PM in the afternoon in Japan, and 130 PM in Shanghai. Rumor has it, they trade a whole lot of gold there in Shanghai. At least thats what I read over at Harvey Organ.
I'm not quite sure why people in the US have such trouble imagining that a few billion people are awake (and a number of them are keenly interested in trading - especially in gold) during the "wee hours of the morning." Perhaps some of us just never travel too far out of our timezones.
Try living on another continent, 12 timezones away from the Eastern timezone. Then, when you read about someone referring to "wee hours" trying to paint a picture of some sort of night-time financial Pearl Harbor attack, and you look at the clock and you see the sun shining and its straight up noon, maybe you'll realize just how hopelessly US-centric the whole thing sounds.
All I see is, someone most likely in China or Japan is dropping a bunch of shorts on the futures market. More than that, I struggle to see the significance of.
[/quote]
Thanks for clarifying. It all makes perfect sense now. I know when I want to sell a huge number of contracts I always do it all at once over a second or two without regards to price. Who has time to sell over any longer period of time? I'm usually in a hurry to get to the golf course, Starbucks, or the like. I simply do not have time to sell into the market over any longer period of time even if it means my total sell price is much less. Yes, those huge instantaneous sell orders during times of very low volume make perfect sense.
The question is the purpose behind the 0030 dumpfests.
Are they:
1. A coordinated action of political/economic big players, working together, to defend the fiat system.
2. Uncoordinated actions of individual big players, competing against each other, aimed at making money quickly by purchasing huge numbers of short contracts abruptly. The abruptness of the purchase serves to 1) moves the price lower, 2) runs the "stops" of those holding long contract, forcing them to sell, further lowering the price. Called a bear raid. Done for a quick profit.
Option #2 is permitted due to "regulatory capture" of the CFTC, the FED, the US Treasury Department and the financial press by big money. The referees in the game, whose salaries are secretly paid by one team, are assigned the job of running around in their striped shirts looking official but to not blow their whistles. Thus Option #2 is actually a conspiracy theory also. Though the conspiracy is structured differently than the conspiracy of #1.
I think that everyone agrees: Someone who actually owned gold would never sell in this way.
dryam-
I've posted this a dreadfully large number of times, but I'll do it once more. Purpose for dumping a large amount of contracts on the market is to run stops. If you don't know what that means, I'll be happy to point you at an article I wrote explaining the technique in more detail. [Or you can read the briefer explanation by sand_puppy above...] Looks like some people in China or Japan wanted to run stops today. That move failed. Longs won, regardless of the "very low volume" you find so significant. That's what happens at the bottom, and its an occupational hazard with stop-running. Stop-running happens in most everything that is traded - just that a lot of people who happen to be fascinated by gold only look at gold trading patterns and assume its a gold-only phenomenon. Isn't it interesting how the shorts ended up being hosed "in the wee hours of the morning" so thoroughly, at a time of such low volume? I wonder why that is? Perhaps a bunch of longs stayed up really, really late, waiting for just such an event to happen? Or maybe they just live in a different timezone than US/Eastern.
Thanks for clarifying. It all makes perfect sense now. I know when I want to sell a huge number of contracts I always do it all at once over a second or two without regards to price. Who has time to sell over any longer period of time? I'm usually in a hurry to get to the golf course, Starbucks, or the like. I simply do not have time to sell into the market over any longer period of time even if it means my total sell price is much less. Yes, those huge instantaneous sell orders during times of very low volume make perfect sense.
In these discussions is the idea of open interest. This is the number of futures contracts sitting out there open by shorts and longs. Because the bullion banks always have the choice of taking either side of a contract, and in the process, creating a new contract (thus adding to open interest) they have a very, very powerful lever with which to nudge price. If there were a fixed number of contracts… or seats available… then price would roughly reflect supply vs. demand for seats over time. But there are not a fixed number of seats. The cartel can, if they wish, absorb a huge amount of demand for long positioning by supplying contracts… they can supply so many that price can go down on days when news would seem to suggest Gold should go up. Today looks to me like the cartel has taken their boot off for the moment… i.e. nobody, neither the cartel nor the algo hedge funds, want to go any more short. At this point, the constant upside pressure reflected in the huge china buying, the hugely (most since 2001) negative GOFO, starts to take charge a bit. I for one am not convinced that this is, "it". The psy ops demands that there be periods where hope can re-emerge, only to be dashed again. Do you think hope will be allowed to flourish in the lead up to the Swiss Gold vote?
My take; Pressure had to be relieved. Hope must be renewed before it can be squashed yet again. Maybe I am being a contrarian indicator… not sure… but I am not betting the brokerage account just yet.
I agree, but what amazes me is that people even allow their hopes to get built up and then dashed at all. This is obviously not a physical market and therefore price has zero relevance to real supply and demand. The price means nothing, except for how many dollars you need to fork over to buy some real metal and how much a miner gets for pulling it out of the ground. Beyond that, as you say, it's psy ops. It's almost funny watching people get so distraught when the price drops … yet again! Well what do people expect? The cartel is in control, and until they lose control, price means nothing. Obviously they aren't going to allow the price to get out of control, while they still retain control! Duh! I can assure everyone that when they do lose control it isn't going to be on some relatively news-less day or week like we have now, leaving us wondering. It will be in the context of global chaos and there will be zero doubt that they have lost control. So until then, even if they let pog rise up to $1500 (and then, gasp, crash it back down to $1,000 – oh I don't think my heart can take this roller coaster!!!) I wouldn't place any more significance behind that then "this is what they want the price to be". It's like, every sane person knows the price is manipulated, yet they somehow at the same time don't know it's manipulated…
BTW I got some cute little 1/20th oz Au maples today in Canada. They aren't sold out, I asked and she said more people are buying them, but they certainly didn't seem sold out of anything. Not sure how that jives with recent reports that the mints have suspended production for the year, maybe the dealer is just burning through inventory while they have it.
thc0655 wrote:"Analyst who predicted $15 silver still very bullish … "
Dear Tom,
predicting is possible to some extent in the natural sciences.
In economics one and the same forecaster regularly and intentionally claims / alleges almost anything at any moment. They don’t worry about what they said the day before. All they need is the one lucky strike knowing that all their false prognoses are long-forgotten. By covering the whole spectrum of possible scenarios / outcomes they make sure being right with one of them.
I suppose that it is a tacit alliance in self-advertising / a collusion / a fixed game between he media and these so called forecasters under pressure of competition.
All the wrong forecasts are willingly put under silence both by the media and by the forecaster himself / herself.
A forecaster needs the lucky strike in order to pass as a guru. The numerous media being in competition with each other want to present >>he one and only guy who got it right<< setting them apart from their competitors.
Unfortunately this is made possible by our own stupidity and credulity when we listen to them.
Best regards
The whole manipulation argument would carry a whole lot more weight with me if many of the other commodities in the commodity complex weren’t dropping right alongside gold - some items dropping much more severely than gold.
Is there a conspiracy to manipulate platinum prices? Oil prices? Iron ore? Copper? Zinc? Tin? how about the rest of the commodity complex? Let me guess: everything is one giant conspiracy and the big guys control every price everywhere.
I don’t buy it. We had an 11 year bull market in gold. Worst Conspiracy Ever. Jim tells me “they just weren’t trying during those 11 years, but now they really are.” That’s an awfully convenient explanation, gold being so critical yet The All Powerful Cartel simply ignored it for 11 straight years, only to have some kind of Come to Jesus moment in 2011 that spurred them to jump all over PM.
And they decided to control everything else at the same time - because they all peaked, and started dropping at the same time.
Or - just maybe - we’re just in a correction, along with the rest of the commodities that have dropped in price from 2011 through today because inflation has slowly vanished from the scene. Reflation largely failed, credit growth is anemic, and even with peak cheap oil and a whole lot of money printing, the Fed still can’t seem to get its beloved 2% inflation…
Not sure why you think the way you do. Your steadfastness & unwavering beliefs makes me wonder if you have an agenda or are simply oblivious. Just being honest.
What I’m saying is that because a good number of the people that are losing—the commercials right now—are apparently taking it on the chin and the technical funds are way ahead on the short position. And it looks like the commercials are in trouble. They’re not in trouble. They’re not like you or I. They have unlimited money. The will buy as much as the technical funds want to sell because they know there’s going to be a reversal. They know that when prices start to turn up—it could be Monday, it could be a week from Monday, it could be a month from Monday, it could be anytime. When the prices turn up, the technical funds that have gone short have to go back and re-buy, repurchase, cover their short positions. They have no ability to deliver actual metal. That’s not in their charter, or it’s not in their capability. So they have to buy back.I'm not quite sure I follow and agree on Ted's comments.The commercials play a waiting game. They know what’s going to happen. They know that these technical funds are going to have to buy at some point. And they can wait them out until kingdom come. They generally don’t wait that long because they’re interested in ringing the cash register sooner than that. But as far as them losing to the technical funds, I think that that’s impossible.
What I'm hearing is this: "Don't worry, the Commercials got limitless money, they will wait it out and win in the end. They (the Commercials) are really not the bad guys, but the Technical funds (driving the price down) are."
To me, this makes NO sense at all.
- Where do the Commercials get their unlimited funds from ? The only unlimited funds I know of is the Fed / Central Banks. The purpose of the Funds is, of course, to suppress the price of precious metals.
- If that's the source of the Commercial's funds, the PURPOSE is NOT to turn a profit.
- The game as it presents it to me is this: for every futures seller, there needs to be a buyer. Commercials and Technical Funds play hand in hand. The Commercials willingly take a loss buying the futures contracts that the Technical Funds sell short. The Commercials willingly take a loss, because it's not about making a profit. They don't need to make a profit, because they get free money from the Fed.
This is going to end only if
- a) Prices of Paper PMs and Physical PMs decouple, or if
- b) The unlimited funding of the Commercials dries up.
[quote=dryam2000]Your steadfastness & unwavering beliefs makes me wonder if you have an agenda.
[/quote]
You aren't alone in wondering.
[quote=locksmithuk][quote=dryam2000]
Your steadfastness & unwavering beliefs makes me wonder if you have an agenda.
[/quote]
You aren't alone in wondering.
[/quote]
Or maybe it's just a main course of normalcy bias with a side of cognitive dissonance. I know I have that meal at least once a week myself. Tasty.
dryam-
Not sure why you think the way you do. Your steadfastness & unwavering beliefs makes me wonder if you have an agenda or are simply oblivious. Just being honest.I notice a variant of the "have you stopped beating your wife" tactic. Gotta love those ad-homenem attacks all wrapped up in the flag of "just being honest."
This is a bit long, because it talks about evidence, not about stories. Let's face it, stories are more fun. Evidence is boring. But if you really want to know why I think the way I do (as opposed to just being angry or offended that I challenge your favorite story), please do me the courtesy of reading through to the end.
Let me start by agreeing with that article you quoted. Tactical, intraday rigging "at the fix" for about 15 minutes is something I proved to my own satisfaction more than a year ago using intraday data and have posted about a large number of times here at PP. The rigging is clear and undeniable, and is similar in character to the "banging the close" that the bankers did with the forex market in order to make a quick buck at their customer's expense. It is a prime example of the banker's focus on ripping off their customers skimming a quick profit with no risk.
However, a daily 15-minute no-risk customer ripoff is not the same thing as a 24/7/365x3 year committment to suppress gold prices below their natural level. That's because the energy required to depress prices one percentage point for 15 minutes, only to let it rebound 15 minutes later is relatively small. The energy required to suppress price every day over a 3 year period is vastly different, as is the risk of losing money if the trade goes against them.
Holding your breath and swimming the length of a pool is not the same level of effort as holding your breath and then swimming the English Channel. Just because you can swim the length of the pool does not mean you can cross the Channel.
As to why I think the way I do - I'm evidence-driven. When the intraday evidence proved the bankers were rigging the London Fix, I was instantly convinced. I got great satisfaction proving to myself that the stories were true.
Now about the likelihood of complete trend manipulation by a shadowy cabal - one that ignored gold for 11 years, and then suddenly got all upset and hammered the price down starting in 2011 and continuing through to the present day. What does the evidence suggest to me? Evidence suggests price correlation with other commodities is a more likely explanation than your shadowy cabal for gold's price movements - over the long term. Most definitely short term price manipulation happens, almost every day. But that's swimming underwater for short periods. It is not the same thing as swimming the Channel underwater.
A lot of items rallied from 2000-2011 - metals, oil, coal, the entire food index. Not all with the same exact pattern, but many were similar in general pattern to gold's rise.
Then in 2011, a lot of things started dropping. Some dropped faster than others. Copper's drop matched's gold's drop pretty closely, although copper peaked first, and dropped faster. Coal did so too, as did tin, as did the food index. But the song was largely the same - peak around 2011, drop off until today. I could provide charts, if you are interested in my evidence. (No goldbug to date has ever has asked me for my evidence; perhaps you'll be the first)
My sense is, the Food Index price drop wasn't due to a suppression scheme. And gold dropped in price along with this index. Therefore, its unlikely that gold's drop was primarily due to a suppression scheme. More likely, it was just roughly correlated with commodities in general.
Based on the evidence, I believe the biggest factor in gold's price drop was falling expectations of inflation from Western hedge fund buyers, driven mostly by reductions in Chinese money supply growth as well as deflation in the eurozone. You think the most likely factor in gold's price drop is a shadowy cabal, and you think that the fact that commodites overall have dropped since 2011 had virtually no part to play in gold's price drop.
If commodities overall had continued rising, but gold price dropped - now THAT would get me very interested in chasing down suppression evidence, because that would fly in the face of long term correlations I've observed. But of course that's not what happened.
I'm ok with my position. It fits the data I've seen. Until I get different data, why should I change my position?
If you have data - data that proves or even suggests successful trend manipulation - I'd be happy to look at it. Thats my hobby. I like nothing better than finding a new timeseries.
Man, that has the makings of a morris west thriller.
Who is the Fed?
davefairtex,It always give pause when people express nearly 100% certainty on just about anything in life. One example is when the head of the CDC expressed 100% certainty when it came to their protocols & understanding of Ebola. Few things in life are black & white.
Neither you or I are going to convince each other on a very complicated topic such as price manipulation in the PM markets in these forums. It's your certainty on the topic I have an issue with. There is ample evidence that supports the possibility of PM manipulation.
If you are going to put yourself out there as the PM expert, then expect to take some criticism. I personally find your "analysis" anything but informative or helpful. Additionally, I do question your motives. I question most people's motives.
dryam-
Let's recap. First, you asked why it is I think the way I do (amid accusations of a hidden agenda, or suggesting I'm simply ignorant). I provided you with my evidence. From your reply, it appears that you weren't interested in my evidence. Now apparently the real issue is, "I give you pause" because I "express nearly 100% certainty" about the issue. I get the sense you want to shift the discussion away from the heart of the matter (evidence suggesting no manipulation) to a critique of my writing style. But let's go down that rabbit hole for a moment. Let me quote from my post, just in case you didn't notice it:
It always give pause when people express nearly 100% certainty on just about anything in life. One example is when the head of the CDC expressed 100% certainty when it came to their protocols & understanding of Ebola. Few things in life are black & white.
My sense is, the Food Index price drop wasn't due to a suppression scheme. And gold dropped in price along with this index. Therefore, its unlikely that gold's drop was primarily due to a suppression scheme. More likely, it was just roughly correlated with commodities in general.When I use words such as "more likely" and "unlikely", I am trying to convey that I am not 100% certain. Indeed, if I look inside myself, I don't feel 100% certain. And when I use a phrase such as "my sense", I want to indicate that its just my thinking, and I'm not trying to speak Ex Cathedra on matters of gold. I do feel that I'm probably right, on a "more likely than not" level, based on the evidence I currently have. But that's not the same thing as "nearly 100% certain." And that's why I use language that expresses some level of doubt. So, back to the original point: manipulation or not, and why I think the way I do: If you have evidence that suggests successful trend manipulation, I'd love to hear it. (Simply pointing out that gold prices have gone down-down-down isn't evidence of manipulation; that's true of copper, ag products, tin, and a host of other things I could name. After an 11 year bull market, a 3 year correction in gold shouldn't be a surprise). Also, if you want to critique my evidence, I'm happy to discuss that as well.