On one side, we have The Specs. These" investors" seek an exposure to gold through ownership of the paper derivative offered by The Comex. On the other side, we have The Banks. These " criminals" fraudulently create unlimited amounts of unbacked paper gold and sell them to The Specs in an attempt to cap price and, ultimately, profit by covering at lower prices. Which side will win? With open interest near record levels in both gold and silver, we're likely not going to have to wait much longer to find out.
If you somehow managed to sleep through yesterday, here's a recap. It was typical of the new, post-April 19 norm. Prices rose on the Sunday evening Globex. They rose further in Asia and they even extended through the London session. However, after hitting highs above $1290 in early Comex trading, prices were slammed for $15in 15 minutes in a move that left many "analysts" searching for explanations:http://www.cityam.com/241192/analysts-puzzled-as-gold-and-silver-prices-suddenly-drop-during-us-morning-trading-
Perhaps your sweet, loving and harmless local analyst can help these "puzzled" folks out a bit?
The action on The Comex yesterday was simply another act of desperation on the part of The Banks. The issued and dumped an inordinate amount of paper gold, calculated by ZeroHedge to be in excess of $2.3B notional:http://www.zerohedge.com/news/2016-05-16/gold-silver-are-being-dumped
Were these Banks suddenly in a rush to sell an accumulated long position? Was immediate liquidation so important that an entire position needed to be blown out in minutes? Or we're The Banks simply dumping a whole bundle of new paper contract supply onto the "market"?
The USD is holding at 95.30 putting a cap on gold's advancement for now.
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