The Criminal Element
Another day, another Globex raid by the EE.
Longtime readers will recall that Tuesday afternoon, Globex raids are commonplace for The Evil Empire. Once the CFTC completes their weekly CoT survey, the criminals are free to act, knowing that they have a full week to cover any new short position that might establish. We've discussed this many times in the past, beginning with this post from last December. It's not a long note so, please, take the time to read it now. Note that it was also written on a Tuesday:
Frankly, you could see it coming. Right after gold blew through 1800 and silver recaptured 35, the metals began to sell off. Not a sharp selloff, mind you, just continual selling into the close. At the time, you had to wonder why the metals were going down. Well, now we know. The Forces of Darkness obviously tipped off a few of their "friends" that a raid was coming and those with this inside knowledge gladly moved out of the way. How can I make such a claim? Well, look at these charts. First up, here's The Pig from 12:30 to present:
Note that The Pig was relatively stable until 1:47 when it began a 25 basis point drop in the next 8 minutes. Now look at gold and silver over the same time period:
So the dollar pukejob ends at 1:55 and the PMs are attacked at 1:57. Does that make sense? Of course not! All of the WOPRs are programmed to buy PMs after such a decline. Instead, the decline in the POSX leads to metal selling. You're now probably wondering if other "commodities" like crude and copper fell, too. Let's take a look:
What we have is clear PM manipulation event. After the dollar drop, the EE attacked in the hopes of keeping gold below 1800 and silver below 35. They've succeeded, at least for today. At this point, I think we have to beware of more selling overnight and in London. Here are two charts to show you where support should be found:
In the end, all we can hope for is that the eventual enforcement of position limits will force JPM et al to exit the metals markets. If that ever happens, we will finally get to see true price discovery and valuation for the metals. Until then, expect these shenanigans to continue. TF