Almost 800 million dollars worth of paper gold was dumped on the market this morning. The question we have to ask is whether the cartel is trying to cap the gold rally, or are they just trying to create temporary lower prices to scoop up some more shares before the next leg up?

57 thoughts on “ATTACK ON GOLD: GOOD OR BAD?

  1. Jorgy

    The day gold spikes 100’s of $’s overnight and in succession (i.e. $300 to $500) in 2 to 3 days we’ll get our “Recognition Phase” that the bull is back. Too bad less than 10% of the traders will have a seat on the rocket prior to launch and less than 2% will have the ballsack to chase prices higher after such a move! Frankly I’d rather be early than late for that ? ride!

  2. Anthonyo

    If I were a big $800 million trader; and I knew a bottom in gold was coming, I would try to have a say on just what number that bottom should print as. It’s only natural, it’s called greed, planning and scheming. It’s as old as dirt itself.

    To me, the bog boys have $1000 or lower in mind. So, I have no say in it, I will just wait until they are done with gold. And it does not look to me like they are going to simply sit back and relax while gold has yet a rendez-vous with $950…… Would you, if you were in their shoes?

  3. Alexandru Popovici

    Walt, thank you for your assurance! Good luck to you too!

    Chris, I think I bought at a great time. I do have the 1022 pivot on my mind for scaling in to a full long-gold position.

  4. ChrisG

    Yes Alex, it dropped further this morning to 1109, around here is the level it should test and hold. Any further more weakness only makes this rally more and more of a suspect

  5. ChrisG

    So how does BOJ crap change the dynamics of things. Wtf BOJ ? They look at charts and do a meeting on month end to paint the picture man

  6. Alexandru Popovici

    1) I do not myself in a competition with anybody in effectively trading bottoms/tops.
    I am only in competition with myself to stick to my two trading systems (one for stocks and for gold/treasuries/stock indexes) in order to achieve low risk, high reward-risk-ratio entries.

    2) it is great bullish news for gold to have produced a shakeout blw the breakout pivot at 1109.9 set on JAN20.
    This journey to 1109 thus underscores the effectiveness of the entry yesterday at 1115 from risk management and high reward-risk perspectives.

    Had I entered long gold before, I would have jumped the gun making a jerk-knee, feverish attempt “not to miss a bottom, not to miss a bottom, oh my God!”.

  7. zkotpen

    I concur with Alex, that the shake out in gold was actually more bullish, at least short term.

    So we’ve had FOMC reversal #1 at 1128.

    Reversal #2 at 1109.

    Hmmm… 200 day SMA currently at 1131.47. I’m still getting a cluster of resistance in that area.

    But just as I posted Wednesday, a move above 1142 turns me much more toward the more bullish scenario. Otherwise, one more lower low below 1020, but likely above 980.

    My best guess right now? A move up to 1131, reversal #3, then down to 986, over the course of about seven weeks. Then a much bigger bear market rally to the 1300s.

  8. Jakk Daws

    Gary – not sure if you answered this one before but Im a curious in hearing about how these banks hide their Gold manipulation? If they are doing these dumps this much and with such large amounts, over and over again – wouldnt it show up in at least one of their balance sheets or in reporting, or by a leak within one of their organizations at some point? Even the coordination alone would have a digital trail and I haven’t seen any of that anywhere.

    1. Gary Post author

      Why would a particular gold trade show up on their financials anymore than any of the other thousands of trades?

      1. Jakk Daws

        Im curious about any evidence not just the balance sheet example…. anything…. if there isn’t any that you know of thats fine it doesn’t stop the risk management of the trade.

        1. Jakk Daws

          .. you brought up the size of these trades is why i ask. Any old trade is one thing.. but $800 million is another.

        2. Gary Post author

          What they are doing is illegal. Position limits are 3000 contracts so I don’t think they are going to make it easy to find evidence.

  9. Gary Post author

    Well it looks like the big move in the yen has terminated the rest of the move down into the DCL for the dollar. A perfect example of why I won’t trade currencies anymore now that the currency wars are heating up again.

    1. Gary Post author

      Gold has been rising along with the dollar so I’m not expecting anything different yet. Plus the dollar still needs to drop down into a larger ICL at some point.

    1. Gary Post author

      I keep warning that it’s not safe to short stocks. The Fed has a printing press. It’s even more dangerous to short them ahead of the Humphrey Hawkins address.

  10. Tech_trac

    It would appear that an expansion of the “safe haven” premium keeps AU above its commodity value of $977. Must the news get even worse than currently to continue the demand & support AU?
    Like the end of the world?

  11. Ty64

    Whoever has been dumping huge paper gold contracts on the market–these past few years or so—in short time periods probably isn’t using basic math to get their 30 to 50% paycheck payout every-time they get another bear market rally.

    If the Bullion Bankers are the ones dumping huge paper gold contracts in the market within the span of minutes, then it is possible for these traders to reach a 30 to 50% profit from the low in the miners without it showing up as easily in simple math. e.i. subtracting the low from the high and then dividing to get a total percentage gain from the bear market rally…

    By just buying miner stocks straight out and not using options…If GDX was bought around the low of $12.40 and then sold around $14.20 and bought back in around today’s “so far” low of around $13.74, they would have gained about an additional 3.6% before moving higher. If GDX were to quickly gain back the $14.20 level in the next few trading days, the gain from the low would not be 14.5% but 18%

    Anymore announced dips in price that were to come from additional contract dumps before the “Panic Buying” phase sits in during the rally would just get these traders that more quickly to their desired percentage profit gain before the price of gold needs to head back down into another low..

  12. Dan

    Shorting worked in January. And betting against these criminals will work in the long run. You just have to pick spots and be patient. Buying more puts soon.

  13. Dan

    TLT is screaming that deflation prevails and the rigged central bank scam breaks hard and violently soon.

  14. Jacob 2

    At least for today the yen is down, the dollar is up and the miners are up. Another positive sign show of strength and change in character for the PM’s?

    Personally, continue to add miners, industrial and emerging market stocks in anticipation of a change in leadership in the ongoing bull… not deflationary collapse. Buying the unloved. Little company in the global growth camp. Win or loose it will be interesting to see how these hold up in the next down draft …. for which we are about to partake.

  15. Hillarys Cattle Futures

    The Attack on Gold is “GOOD” …. as it’s a signal of how desperate TPTB are to save their positions – which must be close to being underwater if they have to resort to tricks to save their positions.

  16. KLO

    The gold attack yesterday can have more far reaching effects like keeping excitement down and holding the entire financial sphere together at a key juncture. Timing is everything. Maybe squashing gold was what was needed to hold it all together until Friday. Now everything is hunky dory and we have a big stock market rally and BOJ turns the USD around and we got money coming out da wazoo again. So I don’t think that the gold trade HAS to be profitable in and of itself but perhaps taken in balance of the whole criminal enterprise it’s money well spent.

    I wouldn’t be messing around with any trading without first minimizing personal debt and owning and having possesion of the real deal metals. I’m worried that this whole arena goes up in smoke one of these days. Sure makes for interesting entertainment though, and people watching.

    I think the first rounded bottom for gold is significant. No stopping this gold bull until 1187.9 the high of last October and then just for a brief respite. Getting in and holding on is supposed to scare the crap out of you. That’s why you make a sizable return on investment. Please make sure your seat belts are fastened and keep your hands inside the ride at all times. Happy weekend to all.

  17. ChrisG

    In 2010, USD was rising for many months, gold also rise along. So wake up guys, USD indicator is only a secondary indicator. You trade gold, look at gold. You trade dollar, look at dollar. If not, when gold is really in a bull rally, you will miss a big chunk of profit.

  18. Gold Shaker

    We all know that Gold can´t fall below 0 USD and that it will not get close to that range but I really think that the next bubble is about to bust and that indicators like chinas stock situtation and the current oil prices.

  19. Alexandru Popovici

    Stocks to top about the time VIX touches its 200dma.
    Such a move of VIX correlates with a growth of stocks in this dead-cat bounce large enough to prove we’ve left an ICL indeed behind.

    A new IC in stocks is also congruent with the idea that it will still quite a while for stocks to bottom in this bear market (most likely in autumn this year) – idea drawn from historical evidence the a break of 200Wma of NYSE has entailed prolonged bears, the shortest having lasted 8 weeks.

  20. Jorgy

    I hate to break it to everyone but the bear market low in mining company shares printed back on January 19th/20th when the “Last of the Mohicans” we’re liquidated by margin clerks. Anyone who didn’t punch their ticket on the the rockets shot out of the ICL/YCL is going to have to chase this rocket down over the next 4 weeks (best case) otherwise this ? Is headed to the ? without you on it! Anyone who was lucky enough to secure full positions on or around 1/19 or 1/20 has “Strong Hand Status” and have the distinct opportunity to make the “Rip Van Winkle Trade” and go to sleep for the next 8 months as we watch in amazement as gold, silver and their repective producers (miners) get to show the everyone in the world what “REAL MONEY” is as the “Recognition Phase” is crystal clear that global central bankers have truly lost control and they’re really just a bunch of jokers trapped in a ? Of their own making! ?

  21. Alexandru Popovici

    on gold: I do not like 2 things:
    – obviously, USX’ rise on BOJ’s move and the promise of further strength due to its positive correlation with stocks and to stocks’ advance towards their ICH as just discussed;
    – GDX did advance but on low volume.

    Both these things come on top of one thing that bugged me: the idea that gold had put its low BEFORE miners…

    Therefore, I would love seeing gold producing a new low (as well as CRB afterwards in its wake) simply because it would bring clarity and the normal negative correlation with USX.

    Consequently, I have risen the stop just below yesterday’s low of 1108.50.
    If gold does have the stamina of a new bull market then it will not reverse lower as USX moves further up alongside stocks.
    If not, then I’ll get stopped out.

  22. ChrisG

    Alex, I agree with you this time on stocks and gold. This BOJ bs will likely propel usd higher. When ECB did that, dollar rallied from 80 to 100.

    If USD going to breakout to 120 or 160, and gold is not ready for its bull for whatever reasons, it may tank as well.

  23. Don

    Gary, is it possible to know if the $800 million was someone closing out a long gold paper position or if it was a naked short? If it was a naked short, will that seller not be required to buy back that short position at some point?

    1. Gary Post author

      No one who is big enough to trade that kind of size would be stupid enough to dump that kind of volume on the market in less than a minute. If you assume that at least half the trades occurred at the lower zone of the one minute bar they cost themselves roughly 22 million dollars by not exiting gradually over the course of several hours.

      There is no question this was a new position opened to drive gold down.

  24. Walt

    Well at least I was in good company . A day after I went short the market , Soros came out & said he was too . I still don’t like the look of everything , the dollar , stocks , gold , silver , the miners , real estate

  25. Walt

    With out of the blue interventions like the BOJ ‘s neg deposit rate , its going to be difficult to trade / invest in the markets .
    Also , all the people in power know , of the coming rush into gold , because of all of the central bank fiascos around the world, you can be sure .
    They might pass some laws to prevent physical gold as a type of investment , because it will undermine the government . They’ll say ” terrorists are using gold to fund their activities ” , or some nonsense. They’re already abolishing cash in some places , like Sweden, to keep track of all transactions. The best thing is to be diversified : cash , real estate owned outright ( income producing if possible) , Dow/s&p , some gold/silver physical , some mining stocks .

  26. Jacob 2

    A strong dollar and negative interest rates in Europe and Japan.

    Believe we are building a fundamental case for assets that historically have preserved value….gold.

  27. klo

    Alex I appreciate your comments and your discipline. Best of luck!

    I bought miners the 1st time in 2000 when hui was 45. I remember when they refused to go down any further despite gold flirting with new lows in the $250 area. That was the sign then that the bull was on. That seemed healthy. Miner’s anticipating.

    Fast forward to 2016. This bear market in gold since 2011 is really just a correction of the 2000 to 2011 run. ( The correction got an extra 3 years due to an expertly executed and timed push down in April 2013.) The market isn’t really making any sense anymore and participants are on the sidelines saying OK let’s see how low and for how long they can keep gold down amid unprecedented financial lawlessness and corruption.

    The recent turn up imo is the anticipation of physical tightness. In this case unlike 2000 the miners turn up only when it becomes clear that the change of direction for the metal is for real and the fraudulent arbitrary shenanigans are coming to a close.

    I will concede to the bears that gold’s chart still looks like this could be just another bear market rally. But if the latest move up is in fact due to no longer manageable financial stress and physical supply tightness then gold should make it through 1187.9 and we have a very attractive looking chart. If gold can better it’s October 2015 high then it looks like a new bull.

    The retracements for the last leg down 1187.9 to 1050.8

    23.6% 1083.1
    38.2% 1103.2
    61.8% 1135.5
    100% 1187.9

    Interesting that 50% of that move is right about where we paused 1119.4

    Many miner’s look to be at reasonably low risk entry points as long as you select charts that are not badly broken down. Look for example at NEM chart. Many miner’s are behaving well. Good luck to and thank you all for the many differing opinions.

    1. Alexandru Popovici

      yes, Klo, NEM does look interesting technically for miners traders: excellent relative strength against GDX, ready to break its 200dma.
      if I were a miners trader, though, I would consider buying/pyramiding only after it breaks above 200dma and after USX indicates it has started its YC decline.

  28. Utopia

    Great analysis Gary. I am a bear but have to agree with you that a bullish trend looks to be in play. Potentially VERY bullish as a matter of fact. The HUI set up is more than just a little interesting so thanks for bringing that up.

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