CSI: Comex. The Gold and Silver Massacre

Thu, Mar 1, 2012 - 4:14pm

As with most crime scenes, evidence can be difficult to uncover. First, you have to know where to look for the evidence. Then, how do you build a case if the only evidence you find is circumstantial? Well, your humble correspondent is willing to give it a try.

With deference to our legal department (CALawyer), it would seem that the first component of the investigation is the search for motive. Does JPM, et al (aka The Cartel aka The EE) have the motive to attack and slaughter the gold and silver markets?

  • The total Cartel net short position in gold has risen from 160,000 contracts at year end 2011 to 229,000 contracts last week. This is an increase of 43% while gold had risen in price by nearly 15% over the same time period.
  • The total Cartel net short position in silver has risen from 14,000 contracts at year end 2011 to 39,000 contracts last week. This is an increase of 178% while silver had risen in price by nearly 30% over the same time period.
  • As of Tuesday evening, February 28, gold was threatening to overtake critical resistance at $1800 and, if successful, would surely accelerate its rapid ascent.
  • As of Tuesday evening, February 28, silver had broken through critical resistance at $36 on heavy volume and was trading above $37. A move toward $40 was imminent.

Were there any witnesses to the crime? Even if it's heresay, enough corroborating, eyewitness testimony can turn a circumstantial case into a successful prosecution.

  • Exhibit A - The information posted by Turdite "Goldmania3000". In it, GM3 lays out a series of detailed conversations he had with his broker and floor broker at the time of the crime yesterday: https://www.tfmetalsreport.com/comment/76627#comment-76627
  • Exhibit B - The Prosecution received several emails yesterday similar to the one below. This particular one came from a Turdite who chose to remain nameless: "I was wondering if you have heard about the rumor going around that a group of ex jpm traders are trying to corner the silver market to crush JPM. Todays action is allegedly JPM fighting back. Not sure of the validity, I heard it from our broker who is usually a pretty reliable source concerning the PMs. Somebody told me they too heard it from another source. Just wondering if you know anything about this."

Lastly, the circumstantial, physical evidence. At the crime scene, did the perpetrators leave behind any clues? Like any villain, our criminals may try to cover their tracks but, sometimes, a complete cover-up is impossible.

  • In gold yesterday, the total open interest fell by a massive 17,303 contracts. This drop was entirely due to the closing of positions in the April12 contract where the open interest declined by 17,991, from 270,183 to 252,192. The next delivery month, June12, saw its OI rise from 65,492 to 65,522.
  • In silver yesterday, the total open interest fell by a tiny 1,039 contracts. A drop in the May12 OI from 65,443 to 64,280 making up the vast majority of the change.

Combining this evidence, the prosecution hereby summarizes it's case:

  • In an attempt to crush gold and negatively impact silver, The Cartel (led by JPM) liquidated at least 10,000 April12 gold contracts yesterday. They did so in a hurried fashion, not concerned about efficient execution, in a blatant attempt to set off a cascading, "waterfall" selloff in gold. It worked, again, as gold fell nearly $100 at its worst.
  • They were also successful in creating a huge, sympathetic selloff in silver. However, total open interest in silver only declined by 1000 contracts, even though price declined by over $2.

The Honorable and Decent Magistrate (Turd) declares his verdict:

The Gold and Silver Bullion Banking Cartels are hereby declared GUILTY of tampering and manipulating the precious metals markets with the malicious intent of falsely creating fear in investors and hoping that, through the creation of this fear, gold and silver will fall farther and The Cartels will be able to successfully extricate themselves from the substantial net short positions they have acquired by attempting to suppress and contain price rallies through the first two months of 2012.


All evil conspirators and co-conspirators shall be defrocked, flogged and humiliated in the public square. They shall then be sent to Van Diemen's Land where they shall spend the rest of their days wailing and grinding their teeth while being to forced to watch endless reruns of "Full House" and "Barney & Friends". This sentence must be carried out at once, without appeal, before The Evil Ones are able to amount a follow-up assault on their true target, silver. With open interest still near 115,000, The Honorable and Decent Magistrate fears that it is only a matter of time before The Convicted attempt another crime.

Se ordena, declara y decreta

About the Author

turd [at] tfmetalsreport [dot] com ()


Mar 1, 2012 - 4:35pm

Follow-up from the RJOBRIEN Broker

Yesterday’s sizeable retracement was largely publicized to be a reaction to Federal Chairman Bernanke downplaying a third round of quantitative easing; however, this was only a supporting factor. Our brokers in the pit relayed to us in a timely fashion, that JP Morgan acting on behalf of an international fund sold, 10,000 gold contracts or 1 million ounces of gold. I say they sold gold with disregard for the markets health.

This chart is the 1-minute perpetual gold futures chart. The red lines at the bottom is the volume (number of contracts traded). This chart shows that the average volume prior to and after this ‘gold dump’ was around 1000 contracts per minute. At 9:47 central time on 2/29 the volume spiked to 11,000 contracts and the market fell from $1763 to $1741. I assert that this was the catalyst resulting in the continued downward pressure that eventually left gold testing $1684.40 before rebounding. Had these extra 10,000 contracts hit the market in an orderly fashion over a period of 15 minutes they may have been absorbed without the impact that left gold with a $97.80 daily trading range. Of course gold is not the only metal that felt the impact, as silver fell in tandem. Silver, in a sympathetic fashion, fell $3.76 from the daily high of $37.88 to a low of $33.825.

At the moment, gold is trading around $1720, up $9 from yesterday’s close. We are looking to re-enter this market after the $100 retracement but would like to see a day of stability. Say tuned!

Mar 1, 2012 - 4:37pm

Jury Duty

I was hoping to be selected for Jury Duty on this case, but got to the end of the article and noted that sentencing had already been undertaken. Swift and efficient justice. All hail - the great Turd!

Mar 1, 2012 - 4:37pm

What will stop the cartel from doing this for a long, long time?

Hi, Turd,

Maybe this would be a good time to review why you believe that gold and silver will rise, despite the manipulation. I have been questioning myself on this a lot lately, and would like to hear your thoughts.

GroanerDr G
Mar 1, 2012 - 4:38pm

I have been turned off since

I have been turned off since my friend kept giving my Pretcharts info on why gold should be going down.. I did not short gold like my friend. But I stayed out and lost about a $100 run and that was huge back then. I finally turned him off and stayed long.. made a few bucks. I wish I knew about stacking silver back then.. $4.75 an ounce

Dr G
Mar 1, 2012 - 4:41pm

Mexican Billionaire Hugo

Mexican Billionaire Hugo Salinas-Price on KWN. For me, this is a great interview, and one with somebody that Eric doesn't usually reach out to. HSP acknowledges that central banks smashed the price of gold through MANIPULATION.

I quote: "when I see that kind of collapse in gold, I know it's not the natural market doing that. Nobody getting rid of their gold and silver is going to dispose of it in that manner. They are going to do it little by little.

"This seller was definitely not interested in losses, what they were interested in was suppressing the price."

Hmm, sounds like I've heard that before. I just can't remember where...

"They did so in a hurried fashion, not concerned about efficient execution, in a blatant attempt to set off a cascading, "waterfall" selloff in gold," says Turd.

Oh yeah, from Turd, that's where. Spot on the money.

Colonel Angus
Mar 1, 2012 - 4:43pm

We need to get the banksters in jail...

...and yes, I know that Max Keiser prefers to "hang a banker a week" until they clean their act up. I'd rather have them where we can take pictures of them, showing what it is like to be a love slave to Bubba. And to remind other banksters that this can be your fate if you decide to run afoul of the law again. Do I expect this to happen? Well, with the recent administrations (and I'm including Obama, George the 43rd, Clinton, George the 41st here) I don't think it will happen. But if we get a man like Ron Paul in...

...I keep telling everyone that I want to vote for Thomas Jefferson and that Andrew Jackson could work for me too. Does anyone really want someone of substance in office, or is it all about the dog and pony show? Don't answer that. It will only depress me.

Dr G
Mar 1, 2012 - 4:44pm

@JohnH, I'm not speaking for

@JohnH, I'm not speaking for Turd, but I'm sure he believes the price will rise despite manipulation because it has been doing so this entire bull market. As he has said (and I think it's a brilliant analysis), central banks and the Cartel members cannot keep the price of the metals down, they can only hope to manage their ascent.

That often means 2 steps forward, 1 step back. Look at silver. Capped at 34.40 for a long time. They a huge move through it. Then a manipulation event. Still ahead of 34.40 at this point. That's how we roll.

Mar 1, 2012 - 4:44pm

ohhhhhhhh, Piningggggg

Do what you just must do!

I Run Bartertown
Mar 1, 2012 - 4:47pm

Still unclear to me

If they are afraid, and they had reduced shorts to 13k, why go back up to 22k contracts? In a pure fear 'GTFO of this trade' scenario, I don't see why they would. It appears (to my untrained eye) that their 'fear' is, at best, battling their greed...

I've never expected regulators to turn on their EE owners, I never expected PAGE to be untainted by the same crowd, but I have generally expected physical demand realities to blow up the paper-short game eventually...I don't see anything short of industrial buyer or $-flight type of panic really changing anything...

laws and elections are the assets of others, not solutions of mine...

Will physical reality intervene? If you say yes, do we really have much to base that on?

Mar 1, 2012 - 4:50pm

best friends

They were so affRAID of a boating accident that they just had to unload all that gold. Good thing old Ben gave them a call the night before. I think if there is a court case, the tax payer will be footing the bill. Who are the terrorists again?

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