Best of the Week
Most Popular
1.Is the Stocks Bull Market Over? Dow Trend Forecast into End January 2015 - Nadeem_Walayat
2.Gold and Silver Stocks Apocalypse Now, Bear Market Review - Rambus_Chartology
3.NHS Baldrick Plan to Spread Ebola Across UK - Sheffield, Newcastle, Liverpool, London Hospitals - Nadeem_Walayat
4.Ebola Terror Threat Suicide Bio-Weapons Threatens Multiple 9/11's, Global Plague - Nadeem_Walayat
5.Second-Richest Man Says Mortgages Now a "No Brainer" - Dr. Steve Sjuggerud
6.Gold And Silver Still No End In Sight - Michael_Noonan
7.NHS Baldrick Plan to Spread Ebola Across UK - Sheffield, Newcastle, Liverpool, London Hospitals - Nadeem_Walayat
8.The Gold Bug is Set to Bite Back - EWI
9.How Alibaba Could Capitalize on the EBay-PayPal Split - Frank_Holmes
10.The Consequences of the Economic Peace - John_Mauldin
Last 5 days
Gold And Silver Price - Respect The Trend But Prepare For A Reversal - 25th Oct 14
Ebola Has Nothing To Do With The Stock Market - 25th Oct 14
The Gallery of Crowd Behavior: Goodbye Stock Market All Time Highs - 25th Oct 14
Japanese Style Deflation Coming? Where? Fed Falling Behind the Curve? Which Way? - 25th Oct 14
Gold Price Rebounds but Gold Miners Struggle - 25th Oct 14
Stock Market Buy the Dip or Sell the Rally - 25th Oct 14
Get Ready for “Stupid Cheap” Stock Prices - 25th Oct 14
The Trend Every Nation on Earth Is Pouring Money Into - 25th Oct 14 - Keith Fitz-Gerald
Bitcoin Price Decline Stopped, Possibly Temporarily - 25th Oct 14
Bullish Silver Stealth Buying - 24th Oct 14
Blood in the Streets to Create the Gold Stocks Investor Opportunity of the Decade - 24th Oct 14
Swiss ‘Yes’ and ‘No’ Gold Initiative Campaigns Compete at Launches in Bern - 24th Oct 14
War And The Law Of Unintended Consequences - 24th Oct 14
Tesco Meltdown Debt Default Risk Could Trigger a Financial Crisis in Early 2015 - 24th Oct 14
Saudi Move to Cut Oil Prices Is Now Russia's Biggest Economic Threat - 24th Oct 14
US Stock Market Top Is Now In Sight - 24th Oct 14
New Profit Points in the Shifting Balance of Power, Welcome to Saudi America - 24th Oct 14
QE Failure & Folly Of Paper Mache, Treasury Bond Integrated Lifeline Patches - 24th Oct 14
U.S. Economy Faltering Momentum, Debt and Asset Bubbles - 23rd Oct 14
Annuities - Afraid Your Money Will Vanish before You Do? - 23rd Oct 14
What Debt Deleveraging? - 23rd Oct 14
How to Profit from Massive Spin-Offs with Just One Play - 23rd Oct 14
Evaluating Ebola as a Biological Weapon - 23rd Oct 14
Euro, USD, Gold and Stocks According to Chartology - 23rd Oct 14
Why You Should Always Be Invested in the Stock Market (Even Now) - 23rd Oct 14
Five U.S. Housing Market Warning Signs Point to Real Estate Market Downturn - 23rd Oct 14
The Better Short: Gold or Silver? - 23rd Oct 14
Focus on Graphite Companies with Green Energy and Technology Strategies - 22nd Oct 14
Crude Oil Price Hitting Bottom - 22nd Oct 14
Evidence of Another Even More Sweeping U.S. Housing Market Bust Already Starting to Appear - 22nd Oct 14
Gold Or Crushing Paper Debt Stocks Crash? - 22nd Oct 14
India Gold Demand Surges 450% and Bank of Russia Demand At 15 Year High - 22nd Oct 14
Bitcoin Stock Exchange Could Be "More Valuable than Alibaba" - 22nd Oct 14
Currency War - How to Profit from a Stronger U.S. Dollar - 22nd Oct 14
Banks Hold Treasuries and Make Loans- 22nd Oct 14
Gold and Silver Timing is Everything - 22nd Oct 14
Don't Get Ruined by These 10 Popular Investment Myths (Part VII) - 22nd Oct 14
Follow the Baby Boom to Biotech Stock Profits - 22nd Oct 14
Copper, Nickel and Zinc Won't Be Cheap for Long - 22nd Oct 14
How Will We Know That the Gold & Silver Price Bottom Is In? - 21st Oct 14
Is Gold as Dead as Florida Hurricanes? - 21st Oct 14
First Swiss Gold Poll Shows Pro-Gold Side In Lead At 45% - 21st Oct 14
The Similarities Between Germany and China - 21st Oct 14
The REAL Reason Why the Stock Market Turned Down - 21st Oct 14
Petrobras is a 'Scheme, Not a Stock' - 21st Oct 14
Stocks Bear Market Indicator Is Off the Mark - 20th Oct 14
Stock Market Ideal Turning Point is at Hand - 20th Oct 14
Investors Quit Complaining, The Environment is Perfect Right Now - 20th Oct 14
Ebola Armageddon Could Trigger a Rebirth in Gold and Silver Prices - 20th Oct 14
Gold vs Euro Risk Due To Possible Return of Italian Lira - Drachmas, Escudos, Pesetas and Punts? - 20th Oct 14
Stocks Rebounded Following Recent Sell-Off, But Will It Last? - 20th Oct 14
U.S. Responsible for West Africa Ebola Outbreak Says Liberian Scientist - 20th Oct 14
Stock Market Intermediate B Wave has Started - 20th Oct 14
Gold Stocks Analysis – FNV, CG, NCM, SBM - 19th Oct 14
Stock Market Primary IV Wave Counter Trend Rally - 19th Oct 14
Gold And Silver - Financial World: House Of Cards Built On Sand - 18th Oct 14
Anatomy of a Stock Market Sell-Off - 18th Oct 14
Why OPEC Has Declared an Oil War on Russia - 18th Oct 14
Gold and Silver Extreme Shorting Peaks - 18th Oct 14
Bitcoin Price Fall to $350? - 18th Oct 14
Tesco Supermarket Crisis Worse To Come as Customers Vanish! - 18th Oct 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Stocks Epic Bear Market

Central Bankers Are Golden Toast On A Silver Spoon

Commodities / Gold and Silver 2013 Apr 20, 2013 - 10:32 PM GMT

By: Michael_Noonan

Commodities

Memo To Central Bankers:

How dumb can you be? What better way to expose your naked short backside than to trash a market with known world-wide demand? So arrogant, so parochial. The world thanks you. The bullion dealers than you. The gold/silver buyers thank you.

When there is more and more smoke about the possibility of the bullion cupboards being bare, the fiat-makers are doing the same thing to paper gold and silver as they have done to currencies: destroying them.


Those few banks responsible for the naked shorting in both gold and silver do not have to post any margin, nor do they have the underlying physical were they required to make delivery. In essence, they are doing what bankers only know how to do: create fiat paper gold and silver that exists only in the minds of the mis-guided believers.

People who are following the "yellow brick road" are discovering that the "Wizard behind the curtain" is a collective of the three main characters: no brain, no heart, a total coward, and most importantly, no true power! Central bankers are a bunch of munchkins.

We have frequently stated that those with power will not give it up without a fight, and that they will stop at nothing to retain it. You are witnessing an example of the extremes to which the fiat-issuers will go. We have also frequently warned that when it comes to markets, Anything Can Happen! You have an example of both, from last week.

We know from direct experience that the available supply for physical gold and silver is becoming more problematic, and the premiums have exploded. Almost all dealers have no supply to meet the real demand for one ounce gold and silver coins. They stopped selling them, and availability for 10 oz and higher bars has been delayed for weeks. For this, too, we have been sounding the alarm.

Price is not the ultimate issue, at this stage. Owning and having possession of the physical is what matters. Silver may be at $23, and gold at $1,400, but try buying them at those prices! Get what you can, whatever the price.

In a Commentary from a few weeks ago, [Comex Prices Manipulated? Still "Accurate." http://bit.ly/YYX5HV, if you missed it, and it also captures the essence of why the physical market is so much more important than the paper one, relative to what just occurred, last week], the point was that the charts which reflect New York and London exchange traded paper is precisely what the central banking cartel wants everyone to "see" and "believe." Their attempt to have "paper cover rock" scam is tearing apart.

These charts have lost relevancy because they do not reflect the actual demand for the underlying physical metals, but they do show some interesting points. The spike lower for April, not yet over, shows what central bankers want you see and "fear," but what the chart does not show is that behind that "curtain," demand for the physical has spiked even more to the upside!

Instead of driving people away from gold and silver by artificially suppressing the now fiat paper market, the true picture is in the physical market, and around the world, investors are flocking to dealers to buy record amounts of gold and silver. Reports from China, Singapore, Hong Kong, India, Australia indicate long lines of more than willing buyers to "get while the getting has gotten better!" Now, it takes less of the trash fiat to buy more of something with real intrinsic value. Unfortunately, most Americans are missing the boat, but those who do know are also experiencing delays, unavailability, and sharply higher premiums.

Larger Image

We often state that exceptionally high volumes are an indication of a transfer of risk from weak hands into stronger hands. Irony of ironies, the central bankers are now the weak hands, and their efforts to suppress PMs has merely fed the voracious appetite existing for direct ownership of the physical, the undeniably stronger hands.

Central bankers are committing financial suicide and bringing about consequences that are directly opposite from what they intended. What should remain uppermost in the minds of the buyers/holders of the physical PMs, [Cheers to you all!], is the time factor. It is unlikely either market will turn around any time soon.

The assault is not over. Wide range bars, and especially those with exceptionally high volumes, also tend to lead to trading ranges in the following weeks or months. It takes time to digest and absorb the risk transfer.

From wherever the ultimate low of the current down swing will be, price will trade in that range, as shown below using last week's low as an example. Patience will now be required. Those who have, and those still acquiring physical gold and silver can relax and let the natural order of supply and demand restore itself from its present distortion, however long it may take.

Can silver still go lower? Yes, it can. Will it? Momentum is to the downside, at present. No one knows that answer, just as no one expected what just happened in the manner in which it did. We drew a potential support line but have no responsible answer as to where this swing low will end.

As explained in the daily gold chart, you can expect a protracted TR to follow for some time into the near future. It is worth noting that when "surprises" hit the market, they tend to do so in the direction of the existing trend.

The trend for futures is down. The trend for demand of the physical is telling a different story. While we often say, "Charts do not lie," sometimes the truth is hidden. There are exceptions to everything. History is on the side of gold over fiat. If you want to know the future, look to the past.

We conclude with some interesting charts from a Chris Martenson article, This Gold Slam Is A Massive Wealth Transfer From Our Pockets To The Banks." For those who hold/own physical gold and silver, we say there was no such wealth transfer. Most reports say that demand for the physical increased sharply. Paper holders got hurt, but there have been so many warnings not to hold any form of paper that people make choices, and choices come with consequences.

The point of his charts is to see what so many have been saying about market manipulation. It is alive and well.

The areas circled represent the largest 'dumps' of paper gold contracts that I have ever seen. To reiterate Ross's comments, there is no possible way to explain those except as a concerted effort to drive down the price.

To put this in context, if instead of gold this were corn we were talking about, 128,000,000 tonnes of corn would have been sold during a similar 3 hour window, as that amount represents 15% of the world's yearly harvest. And what would have happened to the price? It would have been driven sharply lower, of course. That's the point, such dumping is designed to accomplish lower prices, period, and that's the very definition of market manipulation.

For a closer-up look at this process, let's turn to Sunday night and with a resolution of about 1 second (the chart above is with 5 minute 'windows' or candles as they are called). Here I want you to see that whomever is trading in the thin overnight market and is responsible for setting the prices is not humans. Humans trade small numbers of contracts and in consistently random amounts.

Here's an example:

Note that the contracts number in the single digits to tens, are randomly distributed, and that the scale on the right tops out at 80, although no single second of trades breaks 20.

Now here are a few patterns that routinely erupted throughout the drops during Sunday night (yes, I was up very late watching it all):

These are just a few of the dozens of examples I captured over a single hour of trading before I lost interest in capturing any more.

By Michael Noonan

http://edgetraderplus.com

Michael Noonan, mn@edgetraderplus.com, is a Chicago-based trader with over 30 years in the business. His sole approach to analysis is derived from developing market pattern behavior, found in the form of Price, Volume, and Time, and it is generated from the best source possible, the market itself.

© 2013 Copyright Michael Noonan - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Michael Noonan Archive

© 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Free Report - Financial Markets 2014