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Silver Prices Bounce Higher After Futures Manipulated 7% Lower In Minute

Commodities / Gold and Silver 2017 Jul 07, 2017 - 06:00 PM GMT

By: GoldCore

Commodities

– Silver prices ‘flash crash’ before rebound
– Silver hammered 7% lower in less than minute in Asian trading
– Silver fell from $16 to $14.82, before recovering to $15.89
– Silver plunge blamed on another ‘trading error’
– Gold similar ‘flash crash’ last week and similar recovery
– Hallmarks of market manipulation as $450 million worth of silver futures sold in minute
– Trading ‘errors’ always push gold and silver lower. Why never higher?
– ‘Flash crashes’ increasingly frequent in precious metals, yet rarely happen in stocks and bonds
– Rapid recovery from frequent raids bodes well for precious metals
– Silver coins and bars accumulated on dips by ‘stackers’


Silver prices got a bit of a jolt this morning  when spot silver had yet another so called ‘flash crash’ and fell by between 7% and 10% before recovering and bouncing sharply higher to not far below where the attack on the price began.

In a repeat of what happened to gold last week, a bout of massive selling hammered silver prices lower momentarily. Having hit an early session high of $16.18/oz, the spot silver price fell from $16 to as $14.82 in less than a minute. The price recovered as quickly as it crashed, rebounding to $15.89/oz.

Source: Thomson Reuters via Business Insider

This isn’t the first so called ‘flash crash’ silver has seen in the last month. It fell in tandem with gold’s 1% ‘crash’ on June 26th, by 1.3%. Prices did not rebound as quickly, silver has declined by nearly 3.7% between then and July 6th.

Yesterday silver appeared to be on the road to recovery having climbed 0.5%.

Many analysts are calling the flash crash a ‘trading error’ or fat finger.’ However, this is somewhat lazy and ignores a few pertinent facts and context.

The aggressive selling had all the hallmarks of market manipulation as $450 million worth of silver futures were sold in a minute. An entity appears to have wanted silver lower and the massive sell order achieved that goal.

This could be due to a hedge fund or institution having a short position. By manipulating prices lower they can liquidate their short positions at much lower prices, making sizable profits.

The profit motive is a powerful one for hedge funds, banks etc and it would be naive in the extreme to discount this possibility. Especially, as regulators and the CFTC have been seen to be very “light touch” in recent years.

We think it notable and worthy of further inquiry as to why ‘fat finger’ trades never appear to be in favour of gold and silver prices and never result in gold and silver prices surging in value.

It is also worth noting that such fat finger trades rarely result in massive selling of stocks or bonds that result in sharp declines in a minute or two.

Finally, banks have been found to have been manipulating silver markets in recent years and this was proven in the evidence seen in the silver manipulation lawsuit.

Deutsche Bank agreed to settle a class action lawsuit filed in July 2014 accusing a consortium of banks of manipulating gold and silver. Among the charges that Deutsche Bank effectively refused to contest were:

  • bid-rigging, and unjust enrichment.
  • price fixing and unlawful restraint
  • price manipulation claims

Deutsche Bank agreed to pay $38 million to settle the U.S. litigation over allegations it illegally conspired with other banks to fix silver prices at the expense of investors.

Might other institutions and banks not have been doing the same thing overnight in the silver market?

Since 2003, we have believed and written about how the silver and gold markets are manipulated. Even then there was circumstantial evidence to suggest this was the case.

Since then, there has emerged much evidence that bullion banks were coordinating the manipulation of gold and silver and suppressing prices as alleged by the Gold Anti Trust Action Commitee (GATA).

Physical silver buyers are again taking advantage of this latest artificial price decline and are continuing to accumulate silver coins and bars. Gold and particularly silver stackers accumulate physical silver on an ongoing basis and many use these price declines to acquire silver for the long term at short term discounted prices.

Gold Prices (LBMA AM)

28 Jun: USD 1,251.60, GBP 976.25 & EUR 1,101.91 per ounce
27 Jun: USD 1,250.40, GBP 980.31 & EUR 1,111.36 per ounce
26 Jun: USD 1,240.85, GBP 975.56 & EUR 1,109.32 per ounce
23 Jun: USD 1,256.30, GBP 987.70 & EUR 1,125.27 per ounce
22 Jun: USD 1,251.40, GBP 988.36 & EUR 1,120.13 per ounce
21 Jun: USD 1,247.05, GBP 989.04 & EUR 1,118.98 per ounce
20 Jun: USD 1,246.50, GBP 981.99 & EUR 1,117.24 per ounce

Silver Prices (LBMA)

28 Jun: USD 16.78, GBP 13.08 & EUR 14.78 per ounce
27 Jun: USD 16.66, GBP 13.07 & EUR 14.79 per ounce
26 Jun: USD 16.53, GBP 12.98 & EUR 14.79 per ounce
23 Jun: USD 16.71, GBP 13.12 & EUR 14.97 per ounce
22 Jun: USD 16.58, GBP 13.09 & EUR 14.85 per ounce
21 Jun: USD 16.51, GBP 13.03 & EUR 14.81 per ounce
20 Jun: USD 16.59, GBP 13.10 & EUR 14.88 per ounce

Mark O'Byrne

Executive Director

This update can be found on the GoldCore blog here.

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