HFT-Driven "Markets" Continue To Distort Prices

Wed, May 6, 2015 - 11:03am

As The POSX collapses another point today, it's easy to ask why gold isn't racing higher. The answer, of course, lies with the algos and their seemingly endless pairing of gold with the yen.

This is just a perfect example of how utterly FUBAR all of these "markets" are. Once again, conventional wisdom is tossed out the window due to the total market control of the HFT algo computers. Your example today continues to be the relationship between the dollar index (POSX) and gold.

Again, conventional wisdom holds that as the dollar rises, gold falls and vice versa. Do a Google search of this and you'll find thousands of articles detailing this inverse relationship. So why, then, has the POSX fallen from 100 to 94 (down over a point today!) and yet gold has barely budged?

Always remember that the POSX is about 60% euro. This is extremely important, especially today, as the fall in the dollar is primarily due to a rise in the euro. Just today, the POSX is down 1.22% but the EURUSD is up 1.54%.

But the infernal HFT algos aren't set to sell$/buy gold, instead, as we've documented countless times these past few months, they're set vs the yen! Therefore, a falling dollar only boosts gold IF the dollar is falling due to a rising yen. Having the dollar fall vs the euro accomplishes next to nothing. We saw this last week and we're seeing this again today.

Here's the Pig, falling fast and begging for support. It needs to find it, too, somewhere north of 93.25:

But while the POSX sinks like a stone, gold is barely budging. Today it's actually down $4 at $1189. WHY?? Again...it's all about that yen and the HFTs that key off of it. For while The Pig is crashing and the euro is soaring, the yen is hardly moving at all. And when the yen hardly moves, gold hardly moves. Here, see for yourself (yen in candles, gold in bars):

On the other hand, crude oil is rallying.

Why?? Has the US eased the pressure on Russia? Have MENA geo-political concerns flared up? Have oversupply issues been resolved? Has global demand suddenly surged? I don't know. Maybe the answer to all of those questions is a resounding yes. Or...maybe...as we've been stating here for months...crude oil is only moving due to changes in the euro. Once again, it's all about the damned HFTs that control everything through paper derivative trading. Euro down, crude down. Euro up, crude up. It's become no more complicated than that.

And so, repeating...Here's the Good News and Bad News out of this...

GOOD NEWS: All of the charlatan, permabear paperbugs out there that claim "gold is going to $950" or even lower don't stand a snowball's chance of being correct as long as the yen stays above 0.82 JPYUSD or, conversely, below 122 USDJPY. Only if the yen depreciates another 25% vs the dollar will the HFTs slam gold that low.

BAD NEWS: As long as the current system perpetuates, paper gold isn't going higher, either, until the yen rallies against the dollar. All of the talk about China and physical demand and London supply and SDRs and cost of production isn't going to matter much as long as the JPYUSD stays below 0.86. For now, the HFT algo paper trade dominates and trumps everything else.

EVENTUALLY, this will all implode in spectacular fashion, just as every other instance of uneconomic pricing has in the past. Until then, just recognize it for what it is and act/prepare accordingly.



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tyberious · May 6, 2015 - 11:04am


What a mess!

CPE · May 6, 2015 - 11:05am




· May 6, 2015 - 11:07am

Public post

I made this a public post today in the hope of driving as many as possible to the site, hoping they'll stick around and learn some Russian history from Professor Cohen.

· May 6, 2015 - 11:08am

these tweets from Ronan are instructive

mike97 · May 6, 2015 - 11:18am

Coveted Thurd again

BIS dumping again? Yen is up 0.34% against USD, so we should start to see a reversal soon.

TF Metals fan · May 6, 2015 - 11:31am

Leaky brain

Yes Turd you explained this too often. And yes the question did come again in my mind. So thanks for pointing it out again and make this a public post. Thanks!

perdman · May 6, 2015 - 11:38am

Well done professor Turd..

Sending the link to friends who always spew the dollar down gold up mantra

· May 6, 2015 - 11:49am

A secondary HFT pairing that must also be watched

At least this one has some level of economic rationale behind it...

Lower bond prices means higher yield.

Higher yield on paper means the ZERO yield of shiny gold is less attractive.

You must also be aware of the short bonds/short gold...conversely...buy bonds/buy gold HFT algo pairing. Though not nearly as dominant toward price as yen--gold, the current selloff in bonds is also impacting the paper price of gold.

Angry Chef · May 6, 2015 - 11:56am

Yikes ! Fat finger I Guess


Now imagine you're a hedge fund, insurance company, pension fund and you've got a derivative book tied to this ? Oh the tangled web we weave....

· May 6, 2015 - 12:01pm

Dr. Paul definitely a Turdite

Not a big fan of Stansberry but this video is certainly helpful and worthy of your time.

lelford · May 6, 2015 - 12:09pm

So if the Algos are in control

If the algos are in control, can they not be re-programmed to another pairing to replace gold/yen with say, gold/franc or gold whatever. All it would take is an algo programming change and we're back into Ground Hog Day all over again. I keep waiting for that one day where there is just one slip of the finger that crashes forever these dastardly machines and the monkeys (that is being unkind to monkeys!) that operate them.

canary · May 6, 2015 - 12:19pm

I disrespect...

USD down, EUR,oil up, negative economic news...and gold/silver are down. It's just one day of countless examples.

I disrespect anybody's financial opinion who doesn't recognize market manipulation. And not just gold and silver.......The good news: coffee is down for today.

P.s....the whole "algo thing" is a programmed manipulation to me as well.

matt_ · May 6, 2015 - 12:37pm

G. Edward Griffin and Peter Schiff interviews

I just listened to these recent interviews of Peter Schiff and G. Edward Griffin, the author of the Creature from Jekyll Island:


Griffin gives a very frank and succinct discussion of the state of our society, government, and banking system. He outlines why our trust in government and banks is misplaced, and offers some hope that things can be turned around. It probably isn't new news to most subscribers here. However, if anyone is just starting to try and figure out what is really going on, it is a good place to start. I've read the Creature from Jekyll Island and most of Peter Schiff's books as well, and I learned a lot from them.

Angry Chef · May 6, 2015 - 12:43pm

G. Edward Interview


I've read " The Creature From Jekyll Island " but the best book on the subject IMHO is Eustace Mullins work, " The Secrets Of The Federal Reserve " You can purchase it on his site. He passed away I think around 2010 but his son is keeping the work alive. You can also watch his youtube videos while they're still available.


Sit back and listen to the master.

Eustace Mullins - Secrets of The Federal Reserve (FULL)
braincramps · May 6, 2015 - 12:50pm

Virus or EMP pulse

 A virus or EMP pulse would be the easy way for the government to walk away from their financial mess since it would take down the financial/banking systems. They would then blame it on... pick an evil country (Russia/China/N. Korea, etc). This solves the ETCC problem, the hypothecation problem, the derivatives problem... and so on.

I have this large fear that this is the probable outcome. The reason I fear it is, because we are a JIT (just in time) society and there is usually not more than 3 days of food in a typical city. Having electronic systems go down would be devastating to the population, unless you're a fan of the Georgia Guide Stones.

If you want to understand how taking out our computer systems or electrical grid could look, please read the book "One Second After". It is based on the Dept of Defenses's published war gaming of an EMP pulse.

Don't mean to add to the fear porn, but when it leads to so many solutions for the governments of the world...

ned braden braincramps · May 6, 2015 - 1:58pm

Catherine Austin Fitts...yesterday

Catherine Austin Fitts-Major Turning Point Comes This Fall
CPE · May 6, 2015 - 2:12pm

This is interesting


An exerpt:

BitGold is not a bank and does not take risks with a customer’s deposits, not a cryptocurrency like bitcoin, and there are no IOUs and no securitized assets like gold ETFs. As a Trusted, Limited Third Party, the platform is a software service that allows for the quick settlement of independent-physical gold trades so that a users’ gold is easily acquired and accessible across various payment networks. The platform is powered by BitGold’s patent-pending locational-gold exchange and vault management system linking vault custodians and bullion banks with real-time settlement. The BitGold technology allows users to choose where in the world they want their gold physically stored and connects the securely-vaulted gold to international payment rails such as SWIFT, Visa, MasterCard, Interac, SEPA, UnionPay, Discover, American Express and others.


While, I've only read the one article and not researched this fully. For small balances and transactional uses like paying bills this seems to be more secure than an FDIC "insured" derivative bomb, also known as a bank, handling the small balances and transactional funds...

silver66 · May 6, 2015 - 2:14pm


 A friend sent me bitgold valued at 10 cents last week. He wanted to test out the system

I signed up and will be sending back some bitgold to him.

Take a look who is backing it....very interesting

helps solve a problem in the freegold concept. Save in gold but spend in currency, this time digital currency



Blythesshrink · May 6, 2015 - 2:15pm



​More evidence that China intends to take control of gold pricing later this year.

· May 6, 2015 - 2:20pm

Not quite a "swarm" yet

However, lots of little shakers going on in both Northern and Southern California since last week.


brokerk22 · May 6, 2015 - 2:24pm

It is

sickening the way Martin Armstrong is paraded around here like he is the messiah. I just trust him as far as I can throw him. So he called the 2011 high.... so what.

tyberious · May 6, 2015 - 2:24pm
· May 6, 2015 - 2:56pm

Just an incredible day in Forex

And none of it makes any sense. All sorts of counter-intuitive moves and another HUGE jump in 10-year bund yields. Total FUBAR. Really starting to wonder if something is brewing under the surface...

CPE · May 6, 2015 - 2:58pm

Re: Just an incredible day in Forex

Nah, that's just Kuroda spoofing Fellen. Those kids...

usk · May 6, 2015 - 2:58pm

Bloodbath in miners

Wow. The BIS number leaked should be impressive. $1 billion this time? Friday, 8:15 AM or 8:29 AM? Benoit Gilson, if you read this post, could you please send me the number and the hour by PM, I will keep it secret, thanks.

· May 6, 2015 - 3:06pm

Goon Lockhart attempting to jawbone The Pig back up

Barfly · May 6, 2015 - 3:10pm

could someone explain

The BIS leak thing to me. I've seen it referenced a couple of times but have no clue about its origin. Is there any evidence for or against its validity?

Rakka · May 6, 2015 - 3:10pm

a little off topic - RCM Bullion Coins

Anyone here having trouble with RCM milk-spots?

One of my old friends has bought 5 monster boxes thru the 8 years and every single one has milkspots, he has always intended to just use them as bullion.

I love the bisons, Maple leaf too, but due to milk-spotting I am going to move more towards ASE and Libertads, and love kilo sliver bars the most

SS121 · May 6, 2015 - 3:12pm

S Y S T E M - USD Coup Attempt (closer)

China One Step Closer to Becoming World’s Gold Hub

GoldCore's picture

Submitted by GoldCore on 05/06/2015 08:00 -0400

It's all about re-flagging the chart that controls the price of the world's physical Silver and Gold transactions.

Currently the USD/silver and USD/gold charts are the global price references for physical transactions.

STACK NOW Or Forever Hold Your Powder. The chaos accompanying their attempt to switch the world's charts will spook the masses (too late unfortunately) toward phyzz Silver and Gold and never again will a privately owned fake chart control the price of Silver and Gold.

These days of being able to stack Silver for less than 20 bucks above FREE will be gone forever. 

The slide below, that explained the road to what appears to be their Yuan=NWC efforts, was posted in Nov of 2013!

They did push the range down a few dollars, but the dynamic remained the same as well as their goal to re-flag ( with the Yuan?) the silver and gold charts.

It's looking good!! Great days to be a stacker my friendsyes

· May 6, 2015 - 3:17pm

I bought JDST

I bought a few shares yesterday. Up 5% today. Not regretting it. I have been telling myself for a couple of years to hedge my stack, but I just can't seem to do it consistently. Perhaps this time?

But I have also noticed that JDST appears to have a severely diminishing return. Seems like the cartel does not want PM or mining traders to make any real money, short or long. The only kind of line that conects the price tops since march 7 is curved, not straight, which indicates some behind the scenes manipulation of some sort.

  • 1160 gold on 12-1 =JDST $17
  • 1160 gold on 3-9 =JDST $14
  • 1170 gold on 4-27 = JDST $9

Talk about the fund scalping profits from the shareholders...

Any one know of a better short ETF for retirement accounts?

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