Why mince words? The last 48 hours of price movement are transparent for those with eyes to see (and in the case of the CFTC, maybe a brain to process data, and a spine to fulfill their mission would help).
Leading up to the Fed’s surprise “no taper” decision, and during the lead-up to what was initially going to be a near certain US attack on Syria, gold and silver prices were managed lower by cartel action during the first week of September. Hedge funds and “hot money” followed the trend, justified by increasing worries of consensus-view tapering. This brought gold and silver lower in advance of the “no taper” surprise. Silver would have been in a position to possibly retake it’s 200 day moving average were it not savagely managed downward since early September in advance of the “no taper” news.
Sure, we could dive into September’s trading overall and show you specific days where bombing of mining shares signaled to traders the metals themselves would be taken down during the following 48 hours. We could also zero-in on suspicious periods during thinly traded access market hours where large numbers of contracts were sold to paint the tape. We’ve certainly documented many such instances in the past. But as far as this week’s trading is concerned, price truly does speak for itself.
Simply look at the 72 hour trading chart for spot silver and ask yourself one question: Why would yesterday see no follow-through from Wednesday’s move? More importantly, why would the “capping” pattern of ago trading Thursday turn silver down early this Friday morning exactly when silver touched Thursday’s corresponding price level? This isn’t rocket science. The patterns seen in the chart below are the product of computer driven trading — a “cap” algo, issuing sell orders when the price of silver during early Friday morning’s trading matched the previous day’s level. NOTE: that capping algo this morning was operating long before the East Coast’s news cycle of the GOP’s hard line on budget talks hit the airwaves.
Sometimes, a picture really is worth a thousand words — for those with eyes to see. Are we to believe debt talk squabbles in Washington is the proximate cause for today’s precious metals decline? If you said yes, I’ve got a really cool bridge I’ll sell ya for just an ounce of gold.
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Update; 4:49 PM EST:
It should be pointed out that the comments by Federal Reserve Bank of St. Louis President James Bullard came long after the algo capping pattern seen during Friday’s early trading. Any talk that management of price having not set the stage for today’s trashing is just rubbish. Certainly, once momentum takes over, the decline in gold and silver is not 100% cartel driven. But as far as setting the table? Please. For those that have eyes to see…
Federal Reserve Bank of St. Louis President James Bullard, a voter on policy this year who has backed record stimulus, said the Fed may make a small trim to bond buying in October after its close decision this week not to taper purchases.
“That was a borderline decision” after “weaker data came in,” Bullard said today on Bloomberg Television’s “Bloomberg Surveillance” with Tom Keene and Sara Eisen. “The committee came down on the side of, ‘Let’s wait.’”
For the rest of the Bloomberg story, click here.