Gold and silver have been sold down pretty hard since April 18th. But the structure of the weekly Commitment of Traders report, which shows the long and short positions of the various trader classifications (banks, hedgers, hedge funds, other large investment funds, retail) had been flashing a short term sell signal for the last few weeks. The net short position of the Comex banks and the net long position of the hedge funds had reached relatively high levels. Except Thursday (May 4th), almost all of the price decline action was occurring after the London p.m. gold fix and during the Comex floor trading hours, exclusively. This tells us all we need to know about the nature of the selling, especially given the enormous amount of physical gold currently being accumulated by the usual eastern hemisphere countries. The table above calculates the Comex banks’ paper gold positioning going back to 2005. As you can see, currently the net short position and the net short position as a percent of total open interest had reached a relatively high level. This typically when the banks engage in raiding the Comex by unloading massive quantities of paper gold in bursts in order to trigger hedge fund stop-loss selling. It serves the dual purpose of pushing down the price of gold and providing a relatively riskless source of profits for the banks.
This is cycle that has repeated numerous times per year since 2001. This time, however, more than any other time since 2001, the sell-off in the price of gold is counter-intuitive to the collapsing financial and economic condition of the United States, specifically, and the entire world in general. The likely reason for the current price take-down of gold is an attempt by the elitists to remove the batteries from the “fire alarm” mechanism embedded in a rising price of gold. An alarm that lets the populace know that there’s a big problem that will hit the system sooner or later; an alarm that lets public know systemic failure is beyond Government and Central Bank Control.
A similar manipulated take-down of the price of gold and silver occurred in the spring of 2008, ahead of the great financial collapse crisis. Gold was pushed down to $750 from $1050 and silver was taken down from $20 to $10. This price decline was counter-intuitive to the collapsing financial condition of the U.S. financial system, which had become obvious to anyone not blinded by the official propaganda at the time. Of course, after the financial collapse occurred and was addressed with money printing, the price of gold ran up to an all-time high.
It’s likely a similar situation if taking place now. Only this time around all “assets” are in price-bubbles fomented by record levels of fiat money creation and the interminable expansion of credit. The debt portion of this equation is getting ready to hit the wall, the only question is timing. This explains the parabolic move in the price of Bitcoin. Bitcoin is nearly impossible to manipulate. Once the western Central Banks lose the ability to manipulate the price of gold in the derivatives markets, the price of gold and silver will go on their own parabolic price journey – one that will leave the price of Bitcoin in the rear view mirror.
The Shadow of Truth further elaborates on the current price-action in the precious metals market and why latest sell-off is likely signalling the next financial crisis:
The content on this site is protected
by U.S. and international copyright laws and is the property of GoldSeek.com
and/or the providers of the content under license. By "content" we mean any
information, mode of expression, or other materials and services found on GoldSeek.com.
This includes editorials, news, our writings, graphics, and any and all other
features found on the site. Please contact
us for any further information.
Live GoldSeek Visitor Map | Disclaimer
The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy
or completeness of the information (including news, editorials, prices, statistics,
analyses and the like) provided through its service. Any copying, reproduction
and/or redistribution of any of the documents, data, content or materials contained
on or within this website, without the express written consent of GoldSeek.com, Gold Seek LLC,
is strictly prohibited. In no event shall GoldSeek.com, Gold Seek LLC or its affiliates be
liable to any person for any decision made or action taken in reliance upon
the information provided herein.