Price Suppression Theory Mainstream After Single $650 Million Sell Trade

Today’s AM fix was USD 1,255.50, EUR 929.59 and GBP 787.79 per ounce.
Yesterday’s AM fix was USD 1,276.00, EUR 941.49 and GBP 799.50 per ounce.

Gold inched up $2.50 or 0.2% yesterday, closing at $1,272.70/oz. Silver slid $0.03 or 0.14% closing at $21.26. Platinum climbed $12.80 or 0.9% to $1,376.50  /oz, while palladium rose $0.09 or 0% to $711.59/oz.


Gold In USD, 3 Days – (Bloomberg)

Gold  snapped a four day losing streak yesterday but is under pressure again today. Gold traded in a narrow range overnight prior to aggressive selling that saw gold fall to $1,255/oz. Gold is hovering near three month lows despite the political shenanigans and impasse in Washington.

Gold, whose safe-haven appeal is usually burnished during times of geopolitical and economic uncertainty, has failed to gain despite protracted wrangling over the fiscal deadlock in the United States.

It has dropped about 5% towards $1,250/oz since a partial government shutdown began on October 1 and this is, in conjunction with frequently strange trading patterns is leading to deepening concerns about price suppression.

The massive single sell trade on Friday, estimated to be worth a staggering $650 million, which knocked prices $25 lower in three minutes and the poor performance of gold despite the appalling political chicanery in Washington and the U.S. fiscal and monetary position is leading to more questions regarding price manipulation and suppression.

Alex Rosenberg, a producer at CNBC (click on link for story) wrote the following:

“Gold dropped $25 in two minutes Friday morning following what appeared to be a single massive sell order, and professional traders are now pronouncing the sale a deliberate attempt to manipulate the market.

At 8:42 a.m. ET Friday morning, a firm appeared to sell 5,000 gold futures contracts "at the market," meaning at whatever price was available. The massive order was more than the market could take at once and led the CME to automatically halt trading for 10 seconds.

Eric Hunsader of Nanex told CNBC.com on Friday that 2,700 contracts were sold, which triggered the halt, and that the remaining 2,300 were sold once the market resumed trading.
Since one futures contract controls 100 troy ounces of gold, and each troy ounce was worth $1,285 at the time of the sale, this party was selling some $640 million worth of gold in one shot. And it overwhelmed the liquidity in the market.

"Anyone with knowledge of the size and volume in the market would absolutely never, ever place a 5,000 [contract] sell [order] at market, because you could not estimate the offset price," said iiTrader CEO Rich Ilczyszyn.

If Ilczyszyn’s firm were placing the order, he said, "we generally would piece the order in to work a better price." That’s why he believes the trade was "an error."

Jim Iuorio, managing director at TJM Institutional Services, sees similarities between what happened to gold Friday and what happened Sept. 12, when a big gold sale at 2:54 a.m. ET similarly caused a trading halt and hurt the market.

"There is only one conclusion that seems logical regarding Friday’s gold trade and the one from a month ago, and that’s that they were designed to manipulate prices," Iuorio said. "They were slightly different, in that the one from a month ago was done when the market was illiquid in order to get the biggest prices movement. Friday’s was done around the opening to ensure that there was maximum visibility." 
 

Gold In USD, 20 Days – (Bloomberg)

Meanwhile in Australia, Robin Bromby, veteran finance journalist, author and publisher wrote in The Australian (click on link for story) below:

OCCASIONALLY it’s useful to be reminded that not everything in the metals markets revolves around China.

That country has an interest in lower gold prices (making it cheaper to buy up much of the world’s supply) but Beijing seems unlikely to have been involved in "unusual" events on Friday in New York. Out of the blue, just after the opening at Comex, there was placed a sell order covering two million ounces, an order so big it triggered an automatic 10-second trading interruption (and a $US30 an ounce fall in the metal’s price).

If you were to round up the usual suspects, your first instinct would be to pull in the Federal Reserve and other central bankers along with the funds that do their bidding. After all, gold is the enemy of the money printers. The more money being created out of thin air, the more people trust those yellow bars.

There was a huge order unloaded on October 1, too, and then we had that episode in April when, within two hours, 13.4 million ounces was unloaded through Comex. Someone is determined to knock the stuffing out of gold.


Gold in US Dollars 5 Years with Support and Resistance – (Bloomberg)

Gold’s price falls are very counter intuitive and suggests that Wall Street banks, either independently or in unison with the U.S. authorities possibly through the Working Group On Financial Markets  or the Plunge Protection Team, are suppressing gold lower.

This appears to be being done through manipulation on concentrated selling on the COMEX.

The Gold Anti Trust Action Committee’s (GATA long asserted claim that gold is being manipulated in order to maintain faith in the dollar and erode confidence in gold as a safe haven is looking more and more plausible by the day and appears to be going mainstream.

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NEWS
After Sudden Plunge, Gold Traders Cry Conspiracy – CNBC

Currency Probe Looks At J.P. Morgan ‘Cartel’ – Wall Street Journal

Gold Dips As Lawmakers Toil In Washington – Market Watch

Gold Swings As U.S. Lawmakers Seen Nearing Deal On Debt Ceiling – Bloomberg

COMMENTARY
Who’s Seeking To Sink Gold? – The Australian

Silver Is A Relative Value Play – MarketWatch

Walter White And Ben Bernanke – Is The Federal Reserve ‘Breaking Bad’? – Mauldin Research

China Wants To De-Americanize The World – MarketWatch

Factional Conflicts Have The Power To Destroy Empires – And Republics – The Telegraph

For breaking news and commentary on financial markets and gold, follow us on Twitter.

 

 

 

 

Mark O'Byrne

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