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« Gold-Prices.Biz: Tops One Million Views | Main | The Tax Window of Opportunity »

Goldman Sachs News Mask Silver and Gold Prices Take Down

GS Chart 19 April 2010.jpg

Its been said that you should never waste a bad news article, use it to cover or hide behind what you really want to do, its an opportunity. So, of all the days to release the Goldman Sachs fraud investigation news they chose Friday 17th April 2010. Ring any bells, yes thats right it was the option expiry date for the month of April.

MarketWatch led with this article:

A golden mystery.
By MarketWatch

ANNANDALE, Va. (MarketWatch) -- There very well may be a rational explanation for why today's fraud charges against Goldman Sachs Group Inc. should cause gold to fall.

But it's not immediately obvious what that explanation would be, since gold would have been expected to rise in the face of such news. Anything like this that shakes confidence in the integrity of the financial system should, other things being equal, be good for gold -- a store of value that is not dependent on any government or financial market.

We agree both silver and gold prices should have headed north on this type of news, however they took a battering as the last day of trading for the April series unfolded.

Gold Chart 19 April 2010.jpg

On the 30th March 2010 we posted an article entitled: An Interview with the Whistle Blower Andrew Maguire whereby Andrew Maguire & Adrian Douglas Discuss What Could Be the Largest Fraud in History - Andrew is an independent metals trader turned whistle blower at the center of a storm for exposing what could be the largest fraud in history involving countries, banks and government leaders

Also on the 29th March 2010 we posted an article entitled: CFTC whistle blower injured in London hit-and-run: Coincidence?

There a couple of youtube clips here of Bill Murphy of GATA (Gold Anti-Trust Action committee) Speaking to CFTC about manipulation in the precious metals market to a sadly dis-interested panel. Bill produces a rabbit out of the hat in the form of a whistle blower who strangely enough is the victim of a hit and run accident the following day

Having been put under the spot light we expected this series of options trading to draw to a close in a steady fashion, but we were wrong, instead we got wallop, take that, as gold prices were taken down.

The point to be heeded, if you do trade options, is to steer well clear of the expiry date with your trades. If necessary close your position and acquire a similar position further out in time to allow your strategy to develop and meet with your objectives. Options trading is a tricky and dangerous business as once you have purchased a contract the race against time is on and as we know time waits for no-one.

To close, a snippet from the latest missive from Jim Sinclair:

“Stay the course.” “We are a few days from a stratospheric takeoff in the price of gold.”

Well there we have it, this coming week could be one to remember so stay tuned and remain calm the best you can.

Got a comment then please add it to this article, all opinions are welcome and appreciated.

If you would like to get a bit more bang out of your buck, then check out our Options Trading Service please click here.

For the analysis of a recent options trade that we have just closed please click this link.

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Reader Comments (7)

Goldman Sachs would want to make a special effort to knock PM prices down at a time like this, so it all fits "the script" really...divert attention elsewhere, rather than on their stock price, etc...

In the end this will be one more bullish tick for PM's...

Drive on gentlemen...!

April 19, 2010 | Unregistered CommenterSnakeman

It looks like GS is short the market. I bet they make more off the shorts than any fine they have to pay. The only problem for GS is if legal action against individuals moves up the food chain to bigger and bigger fish.

I am expecting fines and worthless promises for the company with several market drops (that GS will profit from). In my mind it is a coin toss if the individual actions result in anything or not. I do hope so.

April 19, 2010 | Unregistered CommenterBC

The putative reason for the given by the media poodles at CNBS...was as follows:

John Paulson was implicated in the Goldman fraud.

Paulson runs a high profile new gold fund.

Investors will want to steer clear of Paulson.

Paulson will therefore buy less gold and others will sell gold upon realizing that a source of buying has been dampened.

Pretty thin stuff. There probably was some selling for just this reason, but come on. My understanding is that Paulson's fund was underwhelmingly received in the first place. And in terms of market impact, GLD it ain't. SOMEONE in some fund will be buying gold to satisfy demand. It doesn't matter whether it's Paulson or not.

Look, gold was showing signs of weakness anyway, so you gotta be careful not to read too much into price action, but if you were dusting for prints at this crime scene, I'm guessing you might lift a few belonging to JPMorgan. What do you think?

This smackdown is of no consequence. The cartel appears more and more to be fighting a rear guard action, striking when they think they can inflict the most damage in the midst of a strategic retreat. That's my best guess, but I could just be making stuff up. Sometimes that damn tin foil hat affects my objectivity.

April 19, 2010 | Unregistered Commenterfallingman


Just read your latest article and I couldnt agree more regarding your comments on options. Gold getting take down on options expiry date is something Ive witnessed for many years. On a separate note did you know that Eric Sprott tried to buy the remainder of the IMF gold? He was told it wasnt protocol and they only sold to central banks. Interesting times. One it will all come unravelled and gold will zoom

many thanks.

April 20, 2010 | Unregistered CommenterC

Jim Synclaire has called it wrong a number of times now, not to mention the meltdown and wipeout in gold in 08. Read Rosen today on Kitco. The HUI is now on its way below 150 and gold below 700. Double top in the HUI. Look out or you Lose it all.

April 20, 2010 | Unregistered CommenterJ

Meltdown and wipeout in 08, must have missed that cuz I made money from 06...

April 20, 2010 | Unregistered CommenterSnakeman

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