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Bank Gold Price Manipulation Continues - Craig Hemke (01/10/2019)

Bank Gold Price Manipulation Continues - Craig Hemke (01/10/2019)
By Craig Hemke 2 months ago 22337 Views 3 comments

October 1, 2019

You didn't actually think that a couple of indictments were going to change things, did you? By now you must understand that The Banks will continue to manage and rig prices until the time comes that it is no longer profitable for them to do so.

In case you need a summary of recent events, please take time to review these three links:

https://www.cnbc.com/2019/08/20/another-ex-jp-morg...

https://www.nbcnews.com/news/us-news/justice-depar...

https://www.zerohedge.com/markets/abject-corruptio...

What was once dismissed as "conspiracy theory" is instead becoming widely understood as "historical fact." Yes, the market-making Bullion Banks seek to manage price for their benefit, and yes, gold price management dates back to the 1950s. However—and despite the recent indictments—these illegal schemes continue to this day.

Case in point? Last week.

As you know, the price of COMEX Digital Gold has rallied from a low of $1280 on May 28 to a high of $1565 on September 4. Why? As global economies slowed, global central banks began to reverse policies and head toward lower/negative rates and renewed quantitative easing. This reality created a surge of demand for gold in all its forms, one of which is futures contracts on the COMEX.

As of May 30, the total amount of gold futures contracts on COMEX (total open interest) was just 443,231 for 44,323,100 ounces of "digital gold." By now you should be familiar with The Bullion Bank strategy of increasing the total float (supply) of contracts in order to meet increasing demand in a rising market. If you don't understand this dirty trick, then please take time to read this seminal piece from 2017: https://www.tfmetalsreport.com/blog/8252/econ-101-silver-market-manipulation

Thus, it should be no surprise that by the time price peaked at $1565 on September 4, total contract supply also peaked at 643,563 or 64,356,500 digital ounces. This is an increase of slightly more than 200,000 contracts in three months...just over 45%! No new physical ounces were added to the COMEX vaults over this time. Instead, these new contracts were created by The Banks. These Banks took the short side and offered them to Specs looking for "gold exposure" and taking the long side.

Over time and with the 15% rally in price, The Banks began to experience some rather hefty potential losses, and at this point, anyone who has followed the precious metals for any length of time should have expected the eventuality that followed.

First, the global bond market began a correction in early September. Bond prices had also seen a tremendous rally in 2019 and were due for some profit-taking. Since COMEX gold and global bonds had been moving in tandem all summer, it was logical to expect a correction in gold, and it soon came to pass with prices falling from $1565 to $1492 in less than five days.

However, the global bond market began to recover in mid-September, and COMEX Digital Gold prices stabilized, too. What happened next is what finally drove The Banks to take direct, overt action.

Early last week, gold and silver prices began to stage a sharp, comeback rally. COMEX silver bounced all the way to $18.70 while COMEX gold traded back to $1540. Keep that level in mind... $1540.

As COMEX gold prices rallied on economic and impeachment concerns, The Banks went into hyperdrive in contract creation. Over just four days, The Banks increased the total float of COMEX gold contracts by nearly 5%, from 628,464 on September 18 to a NEW ALL-TIME HIGH of 658,944 on September 24. Why the sudden need to exceed the previous all-time highs from July 2016? In order to paint the chart with a head-and-shoulder top in the hope of inspiring the type of consistent, relentless selling that would bring a sharp selloff. The Specs sell their gold exposure, The Banks buy back and cover their shorts, pain and margin pressure is eased, and total open interest declines. It looks like this:

On September 18, total OI was 628,464 contracts with price at $1515

Four days later on September 24, to cap price at $1540, OI was moved to an all-time high at 658,944

Four more days later, after price was smashed for $67, OI is back to 610,343 on September 30

And you can see this on the charts. Last Tuesday the 24th, price was obviously and clearly capped at $1540. The immediate reversals seen on the chart below reveal the deployment of the 11,600 contracts created that day alone by The Banks.

At the time, we quickly caught on to their intent. Here's the daily chart from that same day:


And now, after frightening the Specs into selling and closing nearly 50,000 COMEX gold contracts in just four days, the chart has been painted with that head-and-shoulder top that The Banks hope will inspire even more Spec selling in the days ahead.


So, anyway, if you want to bury your head in the sand, ignore the evidence and indictments, and claim that all you've just read is nonsense and "conspiracy theory," knock yourself out. A wise man once said, “it’s impossible to save someone who doesn’t want to be saved.” Indeed. All I can do is explain to you how these "markets" actually operate and remind you that the manipulation remains ongoing and active. You can take it from there.

One day, The Banks will either voluntarily or involuntarily leave this business and prices will be allowed to find a true equilibrium between physical metal and fiat currency. In the meantime, you must understand that the greedy, criminal, COMEX market-making Banks will continue to fight us every step of the way...regardless of whether a few of their trading Monkeys are indicted/incarcerated.

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Since 2008, our customers have trusted us to provide guidance, education, and superior customer service as we help build their holdings in precious metals—no matter the size of the portfolio. Chairman, Eric Sprott, and President, Larisa Sprott, are proud to head up one of the most well-known and reputable precious metal firms in North America. Learn more about Sprott Money.



Our Ask The Expert interviewer Craig Hemke began his career in financial services in 1990 but retired in 2008 to focus on family and entrepreneurial opportunities. Since 2010, he has been the editor and publisher of the TF Metals Report found at TFMetalsReport.com, an online community for precious metal investors.



The views and opinions expressed in this material are those of the author as of the publication date, 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.You may copy, link to or quote from the above for your use only, provided that proper attribution to the source and author is given and you do not modify the content. Click Here to read our Article Syndication Policy.

Gold Hobbit 2 months ago at 7:47 PM
This play by the banks coincides with the week-long closure of the Shanghai Gold Exchange for their national holiday. Gold always sells down during this week. Look for more support starting Oct. 9.
John Gault 2 months ago at 7:59 PM
Craig, I called the same top and sell areas with off the shelf technical/sentiment indicators so I don't see how they're manipulating the market other than adding/subtracting contracts. Isn't that what any trader does though when they're bearish/bullish...they sell or go long with more and more orders until it goes their way or they destroy their account?
haroon al rashid hussein 2 months ago at 8:50 AM
Thank you for such a good and in depth piece. I had always maintained that prices are manipulated.. However this imaginary gold scenario is not only frightening but alarming that Governments are complicit in allowing this fraudulent practice amongst many other fraudulent practices. So where is the democracy they really claim to serve the interests of the people. Practically non existent.

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