For How Long will Gold and Silver Continue to be “Rigged Markets”?

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“Never blink a deputy energy of bonds within a RE-flationary spiral.” – Michael J. Ballanger

Four weeks ago, after bullion had corrected down from scarcely $1,300 to around $1,240, we tweeted out that we was meditative about re-entering a JNUG (Direxion Daily Junior Gold Miners Index Bull 3X ETF) marketplace and proceeded to launch into one of my classical invectives on given a Commercials were going to get toasted and given we should be deliberate a Crown Prince of non-Linear Thinking in my self-amused bravery in “smoking a criminals.”

I was early—which means we was wrong, passed wrong. So lethal wrong that notwithstanding a strike we took in my net value statement, we took a strike in a Achilles Heels of self-esteem, ego and womanlike adoration, all of that are totally abandoned of any suggestive association with accomplishment. By now, we all know me. You know how woefully common we am during down markets and how embarrassingly coronet we am in adult markets. That is usually a inlet of a mania that we all share. It is not wholly accurate to systematise me as an “addict,” though it is though critical that we be personal as a “junkie”, a “Mining Junkie” that was innate a plant of improperly aligned DNA strands that slanted a genes of mania in a instruction of vegetable scrutiny and a consequent hunt for batch marketplace windfalls. So be it.

I am amply humbled, nonetheless again, by a infinite energy of a organisation and women who control a currencies, a organisation and women of a tellurian banking system. They are unrelenting; they are insistent; and they are clearly unstoppable. At a really heart of a debate, they are, utterly simply, criminals—and until opportunists such as a multitude of technical analysts acknowledge this fact, a common discuss stays moot.

One of my really good friends is David Chapman, an impossibly well-read lady and, some-more importantly, a male who tends idea in pick-up hockey during a age of 70. Now, for we youngsters, it is an bid to tie adult your boots when we strike 60, let alone edging adult skates and bend adult those huge pads. This male still plays a diversion after completing his sexagenarian decade and he is also a excellent technical analyst. However, it is not always booze and roses as we have incessant swordfights over my invariable faith that technical research is invalid when perplexing to envision a movements in a changed metals.

Now that we have buttered Mr. Chapman adult to a indicate of embarrassment, we shall now news to we all where a technical analysts go awry; it lies in a area of “data.” Where they all tumble on sensory Swords of Damocles is in their sum and uncompromised abilities to ceremony during a tabernacle of tender information in a form of “charts” or, as an aged coach used to say, “tea-leaf reading.” Their arguments are that interventions tumble into a difficulty of “events” and that a tenure “manipulation” is irrelevant given of a duality of both bearish and bullish manipulations.

I disagree that a bullion bank traders operative in a space as “Commercials” have astray advantage in that they are available (and some would contend “encouraged”) to harmonise cost movements that emanate a apparition of technical “events” such as breakdowns or breakouts. These events are designed to trigger shopping by technical funds, by algorithm-driven funds, by Large Speculators, and by private investors. This happened behind in early Jun when Commercials nudged bullion by a technical “resistance” turn around $1,260 and afterwards fed thousands of ounces of fake “gold” into a marketplace to do dual things: 1. Satisfy all direct generated within a normal technical funds, Large Specs and private investors, and 2. Cap a rally. By definition, indicate 2 falls into a difficulty of “manipulation.”

Gold chart

Here is a COT news from May 16 with total Commercial shorts during 142,859 and a bullion cost during around $1,230. There is no justification of an imminent convene formed on a activities of possibly a Commercials or a Large Speculators. In other words, there is no “event” that would indicate a bullish intervention.

Gold COT Report, May 16, 2017

The subsequent COT is from Jun 6 with a bullion cost coming $1,290 after a $60 per unit allege in gold. Commercial traders changed to aggressively top a allege by approach of a 73,495 agreement boost in net shorts. That represented over 7,349,500 ounces of fake paper bullion and noted an interventional “event” that technical analysts would boot when presented with a justification of a strategy of sorts.

Gold COT Report, Jun 6, 2017

This subsequent COT is from Jun 20 with bullion during $1,240 usually before a $20 per unit “bounce” in bullion and one that saw a Commercials revoke a net shorts to 175,000 but, as enlivening as it looked from afar, a Commercial Cretins were not finished nonetheless with my final note that day being “Caveat Emptor.” Despite that, we attempted to settle prolonged positions in a JNUG and a USLV (VelocityShares 3x Long Silver ETN) during around $1,240 gold.

Gold COT Report, Jun 20, 2017

Finally we arrive during final week’s numbers with a bullion bank behemoths down to 107,226 contracts, a 109,128 agreement rebate in net shorts, that represents 10,722,600 ounces of bullion or around 24 times a 2016 prolongation by Newmont Mining. The discuss we have with many of a technicians is that normal T.A. does not work in markets dominated by regulatory-sponsored interventions that are referred to as “events.” A 10-million-ounce pitch in paper land in a accounts of a organisation of colluding banks skews a really fabric of normal technical analysis, where a supply of batch is a ultimate equivalent to rising demand. However, even if we are scold in estimating a direct side of a bullion market, a supply side is unfit to sign given a bullion bank conglomeration can emanate fake bullion with no requirement for procuring a loan of earthy bullion as is compulsory when one shorts a stock.

There is no “loan post” for bullion (and silver) and that is precisely a debility in a bullish strategy contra bearish strategy argument. If a pimp seeks to change prices higher, all that is indispensable is income to accommodate a domain call and that is a really elementary exercise. What is not so elementary is being means to snap one’s fingers and emanate 10 million ounces out of skinny atmosphere and sell it into genuine direct and never be compulsory to deliver. When one buys, one delivers cash; when a banks sell, they post a money bond with no requirement for physical, loaned or otherwise. When one shorts a stock, a manners contend that one contingency be means to steal a batch in sequence to sell it; in futures, we need usually money and a banks have a ton of that as collateral.

Gold COT Report, Jul 3, 2017

The contention surrounding a odds of bullion and china being “rigged markets” has been rendered indecisive by approach of a vast peep crashes and, of course, a barbarous “Sunday Night Massacre” behind in Apr 2013, when a changed metals were inebriated unmercifully into unconcern by interventions that occurred in literally “the center of a night.” More recently, a peep pile-up in china on Friday Jul 7 was primarily blamed on a “fat finger” and afterwards after by a “rogue algo” though in a end, had that peep pile-up occurred in GE or Tesla or IBM, they would have cancelled a trades. In a china market, given a lows seen during a “event” were retested several times, a repairs finished by a involvement was successful in destroying spirit such that it aided and abetted a egregiously vast brief position hold afterwards by a Commercials.

All one can do with any grade of efficacy is continue to guard a activities of a bullion banks and be on a warning for sudden, pointy changes. One can also guard a function of my 120-lb.-Rottweiler whose antics tend to be synonymous with vital turns in a changed metals markets. Between bullion bank behemoths and conservative Rottweilers, trade a PMs should be a square of self-evident cake though when we chuck in computer-assisted trade systems famous as “predatory algorithms” (that specialize in violation down markets), we have an generally formidable sourroundings and one that could be deliberate a self-evident square of “something foul.” Nevertheless, a rate of change in a total shorts hold by a Neanderthals suggests that a seasonally clever months of Jul by Dec should set adult nonetheless another tradable convene not distinct a Q1/2016 allege that was monumental in range and size. Accordingly, we am once again tiptoeing behind into a JNUG and USLV with purchases this afternoon during $16.80 and $10.23 respectively and am doing so with gritted teeth and clenched fists, a condition synonymous with a effects of Nembutal and Jack Daniels, taken jointly and copiously for comprehensive limit impact.