Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Peloton 35% CRASH a Lesson of What Happens When One Over Pays for a Loss Making Growth Stock - 1st Dec 21
Stock Market Sentiment Speaks: I Fear For Retirees For The Next 20 Years - 1st Dec 21 t
Will the Anointed Finanical Experts Get It Wrong Again? - 1st Dec 21
Main Differences Between the UK and Canadian Gaming Markets - 1st Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - 30th Nov 21
Omicron Covid Wave 4 Impact on Financial Markets - 30th Nov 21
Can You Hear It? That’s the Crowd Booing Gold’s Downturn - 30th Nov 21
Economic and Market Impacts of Omicron Strain Covid 4th Wave - 30th Nov 21
Stock Market Historical Trends Suggest A Strengthening Bullish Trend In December - 30th Nov 21
Crypto Market Analysis: What Trading Will Look Like in 2022 for Novice and Veteran Traders? - 30th Nov 21
Best Stocks for Investing to Profit form the Metaverse and Get Rich - 29th Nov 21
Should You Invest In Real Estate In 2021? - 29th Nov 21
Silver Long-term Trend Analysis - 28th Nov 21
Silver Mining Stocks Fundamentals - 28th Nov 21
Crude Oil Didn’t Like Thanksgiving Turkey This Year - 28th Nov 21
Sheffield First Snow Winter 2021 - Snowballs and Snowmen Fun - 28th Nov 21
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21
Stock Maket Trading Lesson - How to REALLY Trade Markets - 26th Nov 21
SILVER Price Trend Analysis - 26th Nov 21
Federal Reserve Asks Americans to Eat Soy “Meat” for Thanksgiving - 26th Nov 21
Is the S&P 500 Topping or Just Consolidating? - 26th Nov 21
Is a Bigger Drop in Gold Price Just Around the Corner? - 26th Nov 21
Financial Stocks ETF Sector XLF Pullback Sets Up A New $43.60 Upside Target - 26th Nov 21
A Couple of Things to Think About Before Buying Shares - 25th Nov 21
UK Best Fixed Rate Tariff Deal is to NOT FIX Gas and Electric Energy Tariffs During Winter 2021-22 - 25th Nov 21
Stock Market Begins it's Year End Seasonal Santa Rally - 24th Nov 21
How Silver Can Conquer $50+ in 2022 - 24th Nov 21
Stock Market Betting on Hawkish Fed - 24th Nov 21
Stock Market Elliott Wave Trend Forecast - 24th Nov 21
Your once-a-year All-Access Financial Markets Analysis Pass - 24th Nov 21
Did Zillow’s $300 million flop prove me wrong? - 24th Nov 21
Now Malaysian Drivers Renew Their Kurnia Car Insurance Online With Fincrew.my - 24th Nov 21
Gold / Silver Ratio - 23rd Nov 21
Stock Market Sentiment Speaks: Can We Get To 5500SPX In 2022? But 4440SPX Comes First - 23rd Nov 21
A Month-to-month breakdown of how Much Money Individuals are Spending on Stocks - 23rd Nov 21
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks - 23rd Nov 21
Like the Latest Bond Flick, the US Dollar Has No Time to Die - 23rd Nov 21
Why BITCOIN NEW ALL TIME HIGH Changes EVERYTHING! - 22nd Nov 21
Cannabis ETF MJ Basing & Volatility Patterns - 22nd Nov 21
The Most Important Lesson Learned from this COVID Pandemic - 22nd Nov 21
Dow Stock Market Trend Analysis - 22nd Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

The Mechanics of Gold and Silver Price Manipulation

Commodities / Gold and Silver 2013 Dec 28, 2013 - 12:34 PM GMT

By: Dr_Jeff_Lewis

Commodities

Much confusion persists regarding the method, or mechanics, of how the big banks are able to push the price of precious metals around at will for so long.

GATA and Ted Butler have long established and outlined the reasons why this occurs (legally). They have also established the foundation that forms the basis of how the manipulation unfolds. Despite very clear and concise commentary, the message sometimes becomes diluted in its distribution. This situation makes for easy picking from the hard-core opposition who mainly reside, ironically, as part of the professional mining and trading community.


The confusion comes from declarations that on price drops, the bullion banks are selling. This then triggers the frequent and violent down-drafts we have witnessed over the last 2 years and counting. However, the trading data indicates the contrary. Commitment of Traders (COT) data shows that the big banks always buy on these dips and they always sell on rallies. Always. (This is clear evidence of manipulation in and of itself.)

So how do they get the price moving in one direction or another, usually to the downside?

The mechanism is made clear by the forensic analysts at NANEX, which provides documented real time price action down to the microsecond.

Stacking the Bid with Fill and Kill

Via high frequency trading, the big banks are able to stack the bid with spoof orders because of their size and privilege. They are able to place the trades in large size because of their already super-concentrated short (and long in the case of gold) corners. This issue, along with no governor on position limits, also constitutes manipulation on its own.

This technique has been around the HFT world for years and is otherwise known as “fill and kill”‚ trades. The price for these contracts is impossible to fill, so the transaction never closes. However, the bid lasts long enough to trigger speculative funds (hedge funds) to respond (via their own algorithms) into automatic selling and down goes the price.

In the aftermath, the big banks are ready and willing to buy. And they clean up, as it is revealed when the COT data is released a week later. The reverse happens on the way up.

Who has the ability to out a trade on like that?

These sudden moves appear around market opens and coincide with the overlap between the London fixes and the COMEX open. These millisecond trades that have 'broken' the CME platform more than a few times over the last 6 months are fill and kill trades.

These are naturally active sessions of which, on at least four occasions over the last 6 months, the CME has needed to stop trading because of the sudden surge in liquidity.

The resulting price action forms the foundation of the technical analysis. It also forms the popular commentary as to why the price moved this way or that, which of course really has not much to do with those exogenous events.

Opponents, mainly those in the professional trading community, will often misrepresent or attack the wrong argument. It is natural that most of us desire to imagine we are part of an ethical system and not operating in a rigged
casino.

That the miners remain largely mute on the issue may be simply due to their dependence on the very banks that control the price.

The Broader Effect

Are the big banks intervening in all markets?

Many will often point out in opposition to sweeping statements about manipulation by the FED or the government. They will dispute that surely they cannot be involved in corn, wheat, and other commodities.

Maybe so, probably not.

The very same analysis of trading structure analysis can be applied to other commodity markets.

The fact that other commodity markets are also down doesn't necessarily mean that JPM is acting in all markets. But surely these 'other' commodities take their signal from the indications put out by PM performance. Like it or not, precious metals may be peripheral, but remain as peripheral assets. However, they are a permanent guide to inflation expectations. 

What the FED Wants

The Gold Antitrust Action Committee (GATA) has quietly built a huge archive of evidence fully revealing the role of government in the covert manipulation of the gold market. But the Fed doesn't have to be involved on a day to day basis. They are by proxy given their status as regulator. Additionally, to a large degree they are members of the Federal Reserve because of the banks which own these outsize positions.

The big banks (aka, the bullion banks) are simply allowed to do it. And they prosper as a result.

Nothing much has changed in the strategy by which concentrated power wields control over markets. The technology simply adds speed and blocks detection. The question, of course, is when will this end - if ever? The answer is impossible to say, though the inevitability that it will end at some point is guaranteed - just as the sun will come up tomorrow.

But the effect of the price distortions on the physical markets underlying (the interest rate of money, the wider financial system fragility and the economies they threaten) is the crimes of the century.

For more articles like this, and/or for a breath of fresh silver market reality amidst the stench of denial and technically meaningless short term price obsessed madness, check out http://www.silver-coin-investor.com

By Dr. Jeff Lewis

    Dr. Jeffrey Lewis, in addition to running a busy medical practice, is the editor of Silver-Coin-Investor.com

    Copyright © 2013 Dr. Jeff Lewis- 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.

Dr. Jeff Lewis Archive

© 2005-2019 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