Here we sit, in May of 2019, with gold at $1270 and silver at $14.60. Time to shift the truck into reverse and back her up?
Volume is heavy.
And it’s not about a spike in the dollar either:
If anything, the dollar has been constant over the last couple of days.
The apologists and manipulation deniers will be quick to point out something like the jobless claims report that was released at 8:30 a.m. EST, but that stat was “unch” from last week:
So what causes such intense “selling” pressure?
It’s called “blowing the stops”.
You see, when a person buys some gold, they say, “Sweet, I’m gonna buy a contract of gold at $1285, and since I’m just gambling in a totally corrupt and rigged casino, I’m going to put a ‘stop loss’ at $1270”.
What that means is, if gold drops in price to $1270, the stop loss automatically triggers a sell order to sell the contract.
In other words, using “stops” is a way to limit losses.
So what do stop losses have to do with price suppression?
The cartel will dump a bunch of paper gold onto the “market”, intending to dump just enough to trigger the automatic “sell” orders.
The cartel knows exactly and very well just where those most important of stops are in relation to price.
If they see a large position that they know will sell at a certain price, they dump enough contracts to trigger that stop loss, and the automatic selling of that position works to lower price even more, triggering even more stop losses because of the ones that just got triggered to sell.
That was probably a convoluted explanation, so let me explain it this way: If you dump enough paper gold to trigger the automatic sell orders, that selling can and does become a downward spiral as the selling triggers even more automatic selling at it “blows through the stops”.
Can they just run the price as low as they want?
You see, just like people use stops to limit losses, there are also automatic “buy” orders that trigger at certain spot prices.
For example, say I know that silver is dirt cheap, which it is.
I put in a “buy” order that’s “good till cancelled”, meaning I don’t have to do anything, only if silver drops to the price I’ve targeted, the program automatically buys silver.
So say I have big money, and I have a buy order at the spot price of $14.50.
If price is smashed too low, that big buy order could kick in and essentially slow or even stop the selling pressure, depending on how big the buy order is and how many buy orders there are.
Additionally, if price is smashed too low, actual buyers of real, physical gold & silver will load up on real, physical gold & silver, so in addition to the paper fraud that takes place 24/7, there is the real risk of running into physical supply issues because of real buying that is stepping up to the plate.
Therefore, the downside is limited and so is the selling.
I have been looking for an explosive move this week.
There are still two trading days left, so we’ll see.
The opening bell does not ring until 9:30 am.
My downside targets are $1250 & $14.50.
We are very close to a bottom right now.
We could even be seeing the bottom.
That is, for this latest smash cycle.
And if it is the bottom, well then.
That means the price is right.
And the upside potential?
Way more potential.
– Half Dollar
About the Author
U.S. Army Iraq War Combat Veteran Paul “Half Dollar” Eberhart has an AS in Information Systems and Security from Western Technical College and a BA in Spanish from The University of North Carolina at Chapel Hill. Paul dived into gold & silver in 2009 as a natural progression from the prepper community. He is self-studied in the field of economics, an active amateur trader, and a Silver Bug at heart.