Gold and silver were smashed on today’s COMEX open, with silver dropping $1 down a mine shaft (a $1 drop in a single tick on the hourly chart) to $27, and gold smashed through $1600 to $1593.
While we expected a raid today on the August FOMC statement, the fact that this massive raid was unleashed on the COMEX open was unexpected, and likely means 1 of 2 things:
1. The Fed is going to announce new asset purchases (QE3) with this afternoon’s FOMC statement release.
If this is the case, the cartel would be expected to hammer gold and silver leading up to the announcement to mitigate the damage from gold and silver’s response to the new money printing. If this was the case however, we would have expected gold and silver to have been hammered all week, not just on this morning’s open.
2. The Fed has leaked to the bullion dealers and big banks that they will disappoint today, and everyone rushed to front run the announcement.
This appears the more likely of the scenarios, as gold and silver were allowed to run over the past 2 sessions, drawing in new spec longs which could be immediately fleeced upon today’s raid.
We’ll find out for sure at 2:15.