Jeffro
Silver Member
New Gold Record Despite Extreme Manipulation Tactics
By Patrick A. Heller
October 05, 2009
After settling on the COMEX above $1,000 for nine consecutive trading days, the price of gold was knocked down below that level at the close on Thursday, Sept. 24.
It was no accident that it happened exactly then.
First, there was a meeting of G-20 officials in Pittsburgh that began that day. The weakening U.S. dollar was certainly one of the major subjects. Because of the US dollar-destroying fiscal and monetary policies adopted over the past two years by the current and preceding administrations, a weak dollar has become a huge concern to other nations. Since the price of gold is effectively a report card on the strength of the dollar, gold’s price “had” to go down during the meeting to help the U.S. government’s negotiating position.
But that wasn’t the only reason the price of gold had to go under $1,000 that day. Sept. 24 was an options expiration day, with over 4,300 gold call contracts with a strike price of $1,000 per ounce. Had the price of gold settled over $1,000 that day, all of these contracts would have been exercised, which would require the almost immediate delivery of more than 430,000 ounces of physical gold. Quick delivery of that amount of gold would have exerted enormous pressure for much higher prices.
For a long time now, there are three standard times during the trading day when the price of gold is clobbered. The first is when the London markets open at 3 a.m Eastern Daylight Time. The second is when the U.S. COMEX market opens up about 8:30 a.m. The last is just after the London p.m. fix is reported.
The price of gold was attacked in this manner on Sept. 24, but buyers kept snapping up more gold, supporting the price over $1,000.
What it finally took to push gold below $1,000 was a major coordinated new tactic. The Federal Reserve announced that it was going to start withdrawing stimulus funds from the market. It also said it would scale back the short-term cash auctions in early 2010. At almost exactly the same time, the European Central Bank, the Bank of England, and the Swiss National Bank made virtually identical statements.
The timing of these announcements, and their matching of the message, just does not happen by chance. You can be sure that it was planned and coordinated.
Such announcements were predicated on the improvement of the world economy in the next few months. Merely talking about this prospect was enough to raise hopes in investors’ minds that somehow things will get better real soon. Gold fell, but not by that much. Still, the COMEX gold price did settle under $1,000 for the first of four consecutive trading days.
As a tactic, the announcements were brilliant. The strategy did not require that any of these central banks put up immediate liquidity into the markets. Actually, these central banks were not required to engage in any financial activity on Sept. 24. These announcements of plans do not necessarily mean that indicated future events will come to pass when the time comes. I’m virtually certain that none of them will, at least not within several months of when they supposedly will start.
Make no mistake; it took a huge international effort to bring the price of gold down on Sept. 24. Once the U.S. government saw that the recent announcement of the International Monetary Fund gold sale had flopped in suppressing the price of gold, it must have been obvious that the small interventions that worked in prior years are no longer effective. When the U.S. government has to take such extreme measures to hold down the gold price only a little bit – and it only works for a short time –that is a sign that the price of gold is close to a major increase.
Looks like we may be seeing it now, eh? I believe gold will make a big jump, not just to the current high today of $1038- but probably in the $1200 range before too long. The Fed and IMF will figure out a way to shore up the dollar however, before or near spring. History repeats itself. If it doesn't we're in for a world of hurt. If the gold price REALLY skyrockets, thats mean the dollars you now hold will shrink faster than your 401k.
More here-
http://www.numismaster.com/ta/numis/Article.jsp?ad=article&ArticleId=7883
By Patrick A. Heller
October 05, 2009
After settling on the COMEX above $1,000 for nine consecutive trading days, the price of gold was knocked down below that level at the close on Thursday, Sept. 24.
It was no accident that it happened exactly then.
First, there was a meeting of G-20 officials in Pittsburgh that began that day. The weakening U.S. dollar was certainly one of the major subjects. Because of the US dollar-destroying fiscal and monetary policies adopted over the past two years by the current and preceding administrations, a weak dollar has become a huge concern to other nations. Since the price of gold is effectively a report card on the strength of the dollar, gold’s price “had” to go down during the meeting to help the U.S. government’s negotiating position.
But that wasn’t the only reason the price of gold had to go under $1,000 that day. Sept. 24 was an options expiration day, with over 4,300 gold call contracts with a strike price of $1,000 per ounce. Had the price of gold settled over $1,000 that day, all of these contracts would have been exercised, which would require the almost immediate delivery of more than 430,000 ounces of physical gold. Quick delivery of that amount of gold would have exerted enormous pressure for much higher prices.
For a long time now, there are three standard times during the trading day when the price of gold is clobbered. The first is when the London markets open at 3 a.m Eastern Daylight Time. The second is when the U.S. COMEX market opens up about 8:30 a.m. The last is just after the London p.m. fix is reported.
The price of gold was attacked in this manner on Sept. 24, but buyers kept snapping up more gold, supporting the price over $1,000.
What it finally took to push gold below $1,000 was a major coordinated new tactic. The Federal Reserve announced that it was going to start withdrawing stimulus funds from the market. It also said it would scale back the short-term cash auctions in early 2010. At almost exactly the same time, the European Central Bank, the Bank of England, and the Swiss National Bank made virtually identical statements.
The timing of these announcements, and their matching of the message, just does not happen by chance. You can be sure that it was planned and coordinated.
Such announcements were predicated on the improvement of the world economy in the next few months. Merely talking about this prospect was enough to raise hopes in investors’ minds that somehow things will get better real soon. Gold fell, but not by that much. Still, the COMEX gold price did settle under $1,000 for the first of four consecutive trading days.
As a tactic, the announcements were brilliant. The strategy did not require that any of these central banks put up immediate liquidity into the markets. Actually, these central banks were not required to engage in any financial activity on Sept. 24. These announcements of plans do not necessarily mean that indicated future events will come to pass when the time comes. I’m virtually certain that none of them will, at least not within several months of when they supposedly will start.
Make no mistake; it took a huge international effort to bring the price of gold down on Sept. 24. Once the U.S. government saw that the recent announcement of the International Monetary Fund gold sale had flopped in suppressing the price of gold, it must have been obvious that the small interventions that worked in prior years are no longer effective. When the U.S. government has to take such extreme measures to hold down the gold price only a little bit – and it only works for a short time –that is a sign that the price of gold is close to a major increase.
Looks like we may be seeing it now, eh? I believe gold will make a big jump, not just to the current high today of $1038- but probably in the $1200 range before too long. The Fed and IMF will figure out a way to shore up the dollar however, before or near spring. History repeats itself. If it doesn't we're in for a world of hurt. If the gold price REALLY skyrockets, thats mean the dollars you now hold will shrink faster than your 401k.
More here-
http://www.numismaster.com/ta/numis/Article.jsp?ad=article&ArticleId=7883
