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Gold and Silver Price Manipulation on Display This Morning

Those benefiting from being able to print money are frightened at the prospect of lost faith in fiat. Their entire power structure crumbles and they can no longer accumulate massive amounts of wealth and power by simply being able to print money or being first in line to receive unlimited cash at zero interest.

2016 must be a difficult year for the manipulators, with the opening of the Yuan-based gold price fix in Shanghai and public admission of silver price manipulation by Deutsche Bank. But apparently, they are still at it. This morning, both gold and silver were suddenly sent plunging, despite a fairly steady dollar index.

gold manipulation

Apparently, someone decided to sell 18,000 contracts – or over $2.3 billion notional of gold, in 10 minutes this morning. This sell order was obviously done without regard to fetching the best price, but more likely with intention to smack down the prices of gold and silver. This type of action on the London PM fix has become all too predictable.

The goal is to drive fear into gold and silver investors, forcing them to panic sell their positions and accelerate the price decline. But if previous attempts in 2016 are any guide, this attempt will also fail. After more than four years of correction, there aren’t many weak hands left that will be easily scared out of their positions.

To the contrary, investors realize that precious metals had become significantly oversold and undervalued, trading near the cost to produce. 2016 has been a very rewarding year thus far for gold investors and I don’t see this crowd throwing in the towel anytime soon.

We could see increased attempts at propping up the USD and smashing down gold and silver prices in the short term. There are very important technical levels that are being tested and it appears that the establishment does not want to see these levels breached.

For the USD, it is support at the 93-94 level, which has been in place since the start of 2015. The dollar index has been very weak lately, despite almost unanimous opinion by analysts that the dollar would be sharply higher this year.

For gold it is resistance around $1,306, which is both the 2015 and 2016 high (so far). And for silver, it is just above $18, the 2016 high and eventually the 2015 high of $18.50. These levels must be held for fear that technical traders will pile in going short the USD and long precious metals. As price discovery moves from West to East and the manipulators run out of physical metals or people willing to settle in fiat funny money, eventually they will no longer be able to hold the floodgates closed.

This next move higher is likely to usher in a rapid revaluation of gold and silver to the upside as there is little technical resistance past the current price levels. Likewise, look for a panicked rush out of the U.S. dollar if support fails and the public finally beings to lose faith in government, central banks and the paper they peddle.

gold price manipulationThose pulling the strings behind the scenes are also attempting to prop up a dying currency. They have to keep faith in the USD alive at all costs, but they are losing this battle. De-dollarization has been accelerating globally and the writing is on the wall for the dollar.

The basis of every Ponzi scheme or magic show is keeping truth hidden and gold represents truth in money. We believe these types of blatant attempts at smashing down prices will prove to be nothing more than a short-term mirage. Therefore, we believe it is wise to use these moments as buying opportunities, adding to positions on the dips.

And for those that still don’t believe that prices are being manipulated, please note this is no longer conspiracy theory. This is now admitted fact and we suspect it is only a matter of time before additional light floods the dark rooms of these manipulators and they scatter like the cockroaches that they are.

A Zerohedge.com commenter had an alternative explanation for this morning’s sharp price drop:

I was cleaning out the closet over the weekend and found a few hundred thousands oz’s of gold and took it down to the pawn shop this morning….

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By | 2017-03-23T14:06:48+00:00 May 16th, 2016|Gold & Silver Commentary|

About the Author:

Jason is the founder of goldstockbull.com. He previously worked in data analytics for the world's largest research firm, consulting to Fortune 500 companies globally. Jason eventually leveraged those skills to trade successfully full-time and after helping friends and family optimize their investments, he launched Gold Stock Bull and The GSB Contrarian Report newsletter. Jason is a cycles investor with a contrarian eye for identifying undervalued assets. He has built an expertise in both the precious metals and cryptocurrency markets. Jason believes in honest money, limited government, decentralization of power and enjoys studying alternative economic models.