Bullion Bank Desperation and Motive

Mon, Mar 21, 2016 - 11:13am

Ever since the ECB pronouncements of March 10, The Bullion Banks have been in full panic mode, desperate to cap and contain the 2016 rally before new highs are made. That this effort continues today should come as no surprise.

So as we begin this holiday-shortened week, let's summarize this again...

Back on January 29, the price of gold was already up $55 on the year. This initial rally was primarily due to Spec short covering as total Comex open interest had fallen from 415,220 on New Year's Eve to that evening's 373,424. January 29 was also First Notice Day of the Feb16 contract, thus quite a few Spec longs had been closed out, too, in the waning days of January.

Then the rally really took off on the back of an historic rally in the Japanese yen as the inverse USDJPY fell nearly 10% in 10 days from 121 to 111. Gold shot higher and, by February 11, reached an intraday high of $1263. By the close that day and with price at $1248, The Banks had already created over 50,000 new contracts as open interest was 424,537. As documented here ad nauseam, these 51,117 fresh paper contracts represented an additional short obligation of over 5MM ounces of gold, all created by The Banks without ever having to put up any additional physical gold as collateral.

Over the next four weeks, price was flat, closing on Wednesday March 9 at $1257. In a fair market that actually discovered true price, you would expect total open interest to be relatively flat, too. But paper gold IS NOT a fair market. Instead, because The Bullion Banks were intent upon capping the rally...thereby suppressing price, sentiment and physical demand...open interest over that time period rose dramatically by nearly 65,000 contracts to 489,004. These 64,467 contracts represented another 6,446,700 of paper gold obligations for which The Banks were not required to provide collateral. Only by adding all of this new "liquidity" was the price of the paper derivative contract for gold held in check.

All hell broke loose the next day as the ECB announced a startling list of new QE programs, including the plan to directly monetize eurozone corporate debt for the first time. After initially falling on the news, the euro (and yen) soon reversed and remarkably charged higher, with gold closing that day up $16 on the Comex at $1272. The Banks, in a level of sheer panic and desperation rarely seen before, were able to hold that unexpected rally to only a $16 rally by creating from thin air an additional 15,114 contracts that day alone. This surged total Comex gold open interest to 504,118 and a level not seen since 2012. Again, though The Banks added short/delivery obligations of an additional 1.5MM ounces of gold that day, no evidence suggests that they deposited any additional physical gold collateral as the CME Gold Stocks reports remained relatively unchanged.

What happened next? After gold surged higher to $1284 on the "Asia open" that evening, price immediately came under siege. By the morning of Friday the 11th, it had already been maneuvered lower. It was set upon again just before the London PM fix and it was even raided for $12 at 3:00 pm New York time on the Friday afternoon Globex session and finished the day down a remarkable $22 at $1250.

Additional price rigging followed into the next week, as price fell another $19 and closed at $1231 last Tuesday. By counter-intuitively rigging the price lower, The Banks were able to chase back out nearly all of the Spec money that had entered gold the previous Thursday as open interest closed last Tuesday, the 15th, at 493,086. On the chart, the direct and blatant manipulation looked like this:

At that point, it appeared to be "Mission Accomplished" for The Banks. They had successfully scared the most recent 15,000 contracts of open interest back out of the "market" and, though it had cost them nearly 70,000 contracts of new open interest since February 10, price was actually lower versus that date.

But then Mother Fellen struck. Her FOMC "Fedlines" of last Wednesday were nearly the same dovish surprise as the ECB had been the week before. And the "market" response was the same, too. Gold shot higher on the Wednesday afternoon Globex and closed that day up nearly $30 at $1265. And what do you suppose The Banks did to mute and contain this move? They issued over 15,000 new contracts again with total open interest surging back to 508,262 by the close on Thursday.

In what should therefore come as no surprise at all, price was rigged lower back on Friday's Comex session, hammered overnight last night and remains under pressure today with a low thus far of $1241, a full $31 off of the early morning highs of last Friday, the 18th. No doubt, we will now see open interest decline dramatically again today as the price rigging is once again sending this last bit of Spec money back to the sidelines. And, again, for The Banks, it is Mission Accomplished.

So, what can we learn from this and how do we use this information to our advantage? Let's summarize it this way:

  1. The Banks are clearly not "on the run" nor are "the paper markets failing". Instead, The Bullion Banks remain firmly in charge of the paper markets and they are clearly intent upon capping and suppressing this current rally before it can make any new highs.
  2. As we've seen in the past, the next goal for The Banks will be to reverse paper gold's momentum in order to drive even more Specs back out of the "market". The Banks will take the other side of this Spec selling and they will buy back as many of their fraudulent short obligations as possible, seeking to close back out the maximum amount of open interest.
  3. Total open interest above 500,000 contracts appears to be a line of maximum pain for The Banks as it is clear now, on two separate occasions, that The Banks have dramatically intervened to raid price once OI crossed that level.

It's important to note, though, that this DOES NOT mean that a price raid of $100 or more is imminent. With price still well above all of its key moving averages, there are still plenty of bids on the dips...witness today's bounce of $5 from the earlier lows. However, unless a sudden surge of new Spec buyers materializes that drives open interest to 550,000 or more, it's going to be very difficult for new highs to be attained.

Given this, just plan accordingly. Recognize the price raids for what they are and don't panic when you see them. Let's hope that The Banks are unsuccessful in driving price substantially lower and that the increasing physical demand that this 2016 rally is engendering continues. It is only this physical demand that will eventually break The Banks' stranglehold on the paper derivative, fractional reserve pricing scheme. Nothing else will do it.

In the meantime, my plan is to take physical delivery of each and every ounce I accumulate. The day is coming when all of these Bank shenanigans will end and I do not want to be left holding the bag (and simple paper certificates) when the reckoning comes.


About the Author

turd [at] tfmetalsreport [dot] com ()


Mar 21, 2016 - 11:16am

Please be sure you've seen this

We'll discuss the possible significance in today's podcast.


Mar 21, 2016 - 11:18am

And be sure to check back

And be sure to check back later today for a dedicated thread on John Titus' new video, complete with an interview introduction we'll be recording in 3 hours.

Mar 21, 2016 - 11:20am

This week's JMB special


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Mar 21, 2016 - 11:25am

Can it be....

A rare 1st....

Mar 21, 2016 - 11:26am



Mar 21, 2016 - 11:28am



Mar 21, 2016 - 11:29am


Can it be...

Keep stacking

Mar 21, 2016 - 11:32am

My First third -- oops

No? OK, I plead the fifth!

Mar 21, 2016 - 11:34am

@bullion banks...

Well thats cheered me up!!!

Time to kick the dog in the ass

ha ha

Safety Dan
Mar 21, 2016 - 11:34am

And Safety Dan slides into

And Safety Dan slides into the top ten..

Edit: did I mention its past my bedtime? Enjoy rocking and rolling spot pricing of PMs..

Mar 21, 2016 - 11:44am

While gold remains under seige...

Copper continues to drag silver higher. It remains above its 200-day MA off of a textbook, reverse H&S bottom with a possible target of $2.45.

Mar 21, 2016 - 11:53am


I quietly and emotionless-ly closed my DUST position this morning. Have a busy day and no time to watch charts. Gold is down nearly $40 off the high and DUST hardly moves.

Mar 21, 2016 - 11:55am

not holding my breath

Mar 21, 2016 - 12:16pm

Have Silver Mining Companies

Have Silver Mining Companies Finally Reached Their Limits?

After many primary silver miners reported increases and or record silver mining production in 2015, global silver mining production is set to fall in 2016.

According to investment bank Société Générale, silver supply will fall for the “1st time in over decade“. Societe General’s projects a decline in silver mining production of 9.2% in 2016 and a 13% fall in 2017 over silver mining production in 2015.

Société Générale’s projections for silver mining decline in 2016 are greater than the 5% decline anticipated by the Silver Institute.

2015 – The Last Hurrah For Silver Mining Production?


Mar 21, 2016 - 12:18pm

Quote of the day

John Adams, for example, said of democracy, “Remember, democracy never lasts long. It soon wastes, exhausts, and murders itself. There was never a democracy yet that did not commit suicide.”

Mar 21, 2016 - 12:19pm
AIJ tyberious
Mar 21, 2016 - 12:34pm

Silver Production / Tyberious

"2015 – The Last Hurrah For Silver Mining Production?"

This is why I postulated Rob Kirby's announcement could be about the following:


Mar 21, 2016 - 12:42pm

Forbes Yanks a Negative Article on JPMorgan

Forbes Yanks a Negative Article on JPMorgan While the Bank Pays for Content

By Pam Martens and Russ Martens: March 21, 2016

Americans have painful recollections of how allowing ratings agencies to take Wall Street money and dole out bogus triple-A ratings on subprime mortgages tanked the U.S. housing market in the worst economic collapse since the Great Depression. They fully understand that the Supreme Court’s Citizens United decision that opened the floodgates to pay-to-play corporate financing of elections has grotesquely disfigured participatory democracy in America. Now they’re about to learn how America’s “free press” is able to be bought – literally.


Mar 21, 2016 - 12:43pm


Yes! Nothing will come from gov or from oversite or enforcement agencies.

Mar 21, 2016 - 12:43pm

Danny B

Buyback blackout, monday

The FED gave us ZIRP. The banks wrote $ trillions in interest rate swaps that locked in ZIRP. The FED couldn't escape ZIRP unless it was willing to blow all the derivatives. ZIRP wiped out everyone who depended on income from interest. Millions depend on interest income. With that gone, they quit spending. That crashed earnings for equities. So, interest-income crashed. Stock earnings crashed. Hedge funds depend on these earnings.
Stock earnings crashed and everybody wanted out. Goldman Sux started up an ETF just for the purpose of unloading crummy stocks on to muppets.
At it's introduction, Zero Hedge said to short it as it was a guaranteed bust.
It didn't take long, "Nobody Is Making Money" - Hedge Fund "VIP Basket" Obliterated, Plunges To Record Low | Zero Hedge

The stated problem with gold is that it doesn't pay any interest. BUT, what happens if nothing else pays any interest,,, or goes down? The banks, et al are getting tired of no earnings and negative rates. Some have decided to go to cash and gold. Munich Re Gives The ECB The Middle Finger, Owns Almost 300,000 Ounces Of Gold | Zero Hedge
The State saw this coming and that is why they are so intent on getting rid of cash. Everything else that the State has done has backfired. Presumably, this will too.

People have stopped using credit. The credit edifice needs a LOT of air under it's wings to stay aloft. GOV tries to make up the difference.
"Credit did slow almost across the board. There was even a marked stalling in State & Local borrowings."
"Federal debt was the big outlier in the “almost across the board” Credit slowdown. Federal borrowings expanded at an 18.5% rate,"
Credit Bubble Bulletin: Weekly Commentary: Q4 2015 Flow of Funds

3/20 Support for impeaching Brazil's president rises to 68 percent – Reuters That's what happens when the economy contracts and you take away the trinkets that were passed out in the good times.
3/20 China's Central Bank chief sounds warning over rising debt – Bloomberg First it was the IMF and BIS,, now this guy.
3/20 The stock market is relying on just this one buyer to hold it together – Birch Gold The buyer, on the other hand, is corporate America. CFOs have practically been backing up the truck to buy back their own stock,
BUT, 3/20 Buyback blackout period starts Monday - the catalyst that ends the S&P rally? – Zero Hedge

So, corporate America is going into a blackout.
How about the bond market? 3/19 Bond hedge funds see 'worst quarter in history,' Loomis says – Bloomberg
Obviously, the bankers want you to store your money in their banks...... 3/20 JPMorgan Chase's forecaster says buy gold, not stocks – CNBC

Mar 21, 2016 - 12:49pm

Relinquish Power

Relinquish Power Peacefully?

from Bill Still:

Still Report #719 - Relinquish Power Peacefully?

Mar 21, 2016 - 1:11pm
Mar 21, 2016 - 1:23pm

The bullion banks are just so annoying

It is so hard to sit here and watch as they just keep walking gold down. At least they are taking it some what slow and enjoying the walk. I wonder how the view is where they are walking maybe New York or could it be more like London?

Mar 21, 2016 - 1:44pm

palladium >= 600

that is all

AGAU SilverHunter1985
Mar 21, 2016 - 1:50pm

Annoying BB's etc

It may be because they are having a tough time keeping a lid on it???

They are sitting on a powder keg and I hope it blows their balls off ----Soon!!!

Mar 21, 2016 - 2:02pm

Hell hath no fury like an electorate scorned...

The 60's brought us Hippies... They lost. Hippies became Yuppies and enjoyed a great prosperity (80's and 90's)...

The 70's brought us malaise, oil embargoes, Datsuns and Toyotas - it almost ruined the middle class - it ushered in Jimmy Carter (do you think this was the death of hippies?)

The 80's brought Ronald Reagan, National pride-military buildup, 18% interest rates, the re-birth of the "American Dream" of prosperity, the death of USSR and the 1986 tax repeal act (retroactive) that wiped out hundred of million$ in Real Estate for the above average middle class/ low level upper class investor, the S&L debacle and the "resurgence" of BIG BANKS

The 90's brought us BILL CLINTON--- I mean anything else need to be said? The GOP contract with America, 6 years of GOP controlled House and Senate and a Clinton wanting to get something done... Eventually brought us the worse financial calamity we have ever experienced to date.... Repubs and Clinton brought us the "American Dream" expanded to NINJA loans and the like... But hey, NO deficits, TIME's were good! Or were they?

The 2000's brought us the DOT COM bubble and bust, George Bush, 9/11, The Iraq War, The Afghanistan War, The Patriot Act, the beginning of the official end of the good times? The WORST financial calamity to have ever hit our shores, the real estate bubble... and OBAMA and the BIRTH of the TEA PARTY MOVEMENT (not a party, just a movement)

2010-2020 a continuation saga of OBAMA and Maybe another Clinton? In 2010, the VOTER went out and VOTED for a GOP house; on 2011 The Elites went out and BOUGHT themselves an "Occupy Wall Street Movement", in 2012 the TEA PARTY movement stayed home because of ROMNEY (yawnnnnn) and the OWS died after achieving nothing but forcing Romney on the GOP, and in 2014 the TEA PARTY MOVEMENT voted in a GOP SENATE and increased the GOP house.... WHAT DID THEY GET? NOTHING!!!!!!!

The Tea Party movement has been hijacked, maligned, and tossed around like a dirty dish towel. The MSM did all they could to paint any "bad" person a TEA PARTY MEMBER... The only real criminals belonged to the OWS, which we all know is a front for the NWO/SOROS/BLM/blah blah blah...

Today we are witnessing another OWS moment, all in the hurried expectation that the ORIGINAL TEA PARTY MOVEMENT will stay home and AVOID conflict...

I say, Obama is getting everything he wanted and them some. The Elites could not have planned a better Summer of hatred than what we are looking at. The divide is growing and the voices are getting louder, and the MSM is getting more hostile in their interpretation of TRUMPMANIA...

Will the OWS/BLM be the new hippies or will they be the new thugs/provocateurs who FORCE violence into this election? Will PEOPLE join hands to defeat the OWS/BLM or will they stay home intimidated?

When you look back at how things have transpired decade to decade, it all does seem very well orchestrated with 20/20 hindsight...

Edit: BTW, less than 5% of the country is populated by over 50% of the electorate. Control the Urban center with the thugs and the election will look like a run away. Approximately 97% of the Country Mass can vote for Trump and the Urban centers still carry Hillary... revolution is a funny thing... Tipping points abound everywhere....

Mar 21, 2016 - 2:18pm
Mar 21, 2016 - 2:28pm

A big old pile of evidence

Video unavailable
Angry Chef
Mar 21, 2016 - 2:29pm

Gary Savage Article

I was thinking the same thing when I worked out this morning and Gary Savage nailed it. The CB's are just going to print money and continue to prop up the markets...except PM's. They'll continue to beat them like a red headed step child. Not only do they have a printing press at their finger tips but they have the ESF. Recall Rob Kirby's interview with Greg Hunter the other day when Greg asked him what does and how does this end ? Rob replied when people lose confidence in the dollar. Well if Rob is correct and foreign sovereigns are in fact shipping back US Treasuries to the tune of a trillion plus in the last 18 months. Only to be lapped up by the ESF and hidden away in some hidey hole. Then we are already in the midst of the crash ( which most Turdites would agree ) and this could go on for considerably longer. We're not wrong in buying PM's and stacking. But TPTB have awesome weapons at their disposal. So trade these markets accordingly. Take your profits and pour them into PM's. When does the day arrive where the ESF can no longer hide the US Treasury redemptions ? Is it 2 trillion ? Five Trillion ? Ten Trillion ? I gave up on any hope of the Rule of Law doing it's role a long time ago. We can only sit and watch in horror like Colonel Kurtz as the global monetary system gets flushed down the toilet as well as the last vestiges of freedom. It will be the inability to deliver physical that breaks the camels back. But this game could go on for considerably longer. Until it doesn't. When you think of TPTB and the PPT and ESF and the tools at hand. As well as coercion, as in Indian Temple Gold now coming into play. We could be in for more beatings. Until the whole thing goes up in absolute carnage and chaos.

Good Luck.

PS: Lost Mind...great post above.

Mar 21, 2016 - 2:41pm

Gary Savage & Avi Gilburt

Gary Savage preaches to the choir here in Turdville but also of interest is the comment section note from Avi Gilburt.

It seems Avi and Dan Norcini share identical views on the markets vis a vis - not rigged, paper gold being synonymous with bullion AND that bullion actually exists and is owned by US Banks/Government. At a gold to paper ratio of at least 250 to 1? ....oh ya, I wonder who took the blue pill.

These guys are of the view that people in Turdville only complain about bank manipulation in commodities when the price is being pushed down. It's their little way of assuring themselves that they're right and we're misguided conspiracy theorists. Indeed, it may at times appear that way because the PMs have been kept artificially low for so long and thus they miss the point entirely.

These guys are disinclined to accept that overt manipulation of this magnitude is routinely conducted essentially to protect the dollar (ie. helping to sustain American "wealth") and as such, any underhanded and illegal activity is both appropriate and justifiable in the minds of TPTB. In Goebbels famous words, "If you tell a lie big enough and keep repeating it, people will eventually come to believe it", and Dan and Avi have swallowed it whole. They are not so much the propagandists here but the believers; the suckers, who can't see the obvious when it stands before them stark naked and unabashed. They propagate the lie by their need for conformity, like attention seeking school children, racing each other to answer the teacher's question first and bursting to tears at anything less than an A on their school report. The thought of cheating never entered their mind.


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Key Economic Events Week of 3/18

3/19 10:00 ET Factory Orders (Jan)
3/20 2:00 ET FOMC Fedlines
3/20 2:30 ET CGP presser
3/21 8:30 ET Philly Fed
3/22 9:45 ET Markit PMIs
3/22 10:00 ET Existing Home Sales
3/22 10:00 ET Wholesale Inventories (Jan)

Key Economic Events Week of 3/11

3/11 8:30 ET Retail Sales (Jan)
3/11 10:00 ET Business Inventories (Dec)
3/12 8:30 ET CPI (Feb)
3/13 8:30 ET Durable Goods (Jan)
3/13 8:30 ET PPI (Feb)
3/14 8:30 ET Import Prices (Feb)
3/14 10:00 ET New Home Sales (Jan)
3/15 8:30 ET Empire State Manu Index
3/15 9:15 ET Cap. Util. & Ind. Prod.

Key Economic Events Week of 3/4

3/5 9:45 ET Markit and ISM services PMIs
3/5 10:00 ET New home sales (Dec)
3/6 8:30 ET Trade Balance (Dec)
3/7 8:30 ET Productivity and Unit Labor Costs
3/8 8:30 ET BLSBS
3/8 8:30 ET Housing starts (Jan)

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