From outside the usual ‘precious metals commentary community.’
Dave Kranzler | May 1, 2014 11:22 am
Perhaps the most unsettling recent event was the announcement by the CME that it was looking at putting daily price limit curbs on gold and silver futures.
Why now? The daily volatility of gold(NYSEARCA:GLD) is at a 4-yr low. Why were limits not in place a year ago when the bullion banks took the price of gold down $200 in a 24 hour trading period?
The only reason to put price limit curbs in is to prevent true price discovery. Anyone with a pulse knows that the last year’s manipulated trouncing of the metals using Comex futures triggered an avalanche of physical gold and silver(NYSEARCA:SLV) buying globally. And based on the fact that over 1000 tonnes of gold was removed – and disappeared from sight – from all of the physical gold investment trust globally combined, including over 500 tonnes from GLD, the massive and determined price take-down last year was anything but true price discovery.
But there are other, equally as disturbing smoke signals:
1) Silver was hammered early this morning, after the a.m. London “price fix” and leading up to and during the opening of Comex futures floor trading. All of the European/eastern REAL physical markets were closed today – Switzerland, China, Viet Nam, Turkey. London was not closed but I think we’re fooling ourselves if we consider London a true physical market. Today was nothing but a pure paper jam job to try to force potential holders of Comex contracts to sell and not stand for delivery. Note: no other correlated markets, like the U.S. dollar(NYSEARCA:UUP) index or currency futures flinched during the raid on the metals.
2) Since the beginning of March, 452 tonnes of silver were removed from the Shanghai Futures Exchange + the Comex AND the U.S. exported a record amount of gold to Hong Kong in January.
3) Deustche Bank resigns from the LBMA gold and silver fix committee and can’t sell its seat. Why? Because why would any prospective buyer pay for the right to fix the price of gold and silver if they won’t be allowed to manipulate it and make money from it. This is a more significant event than has been attributed to it by anyone. Those LBMA price fix committee seats have zero value if they can’t be used to manipulate the markets.
4) What was the emergency and secretive Fed meeting about two days ago? It certainly had no bearing on the policy announcement from the FOMC yesterday because the FOMC policy was basically unchanged, with the standard fraudulent comments about an improving economy and labor market.
5) China and Russia shifted into overdrive mode to work toward eliminating the U.S. dollar from their trade activities. Ironically this was triggered by the U.S. intervention in Ukraine.
6) Unexplainedly, Belgium in the last 5 months has become one of the largest holders/buyers of U.S. Treasury bonds(NYSEARCA:IEF), amassing a quantity that is roughly 2.5x the country’s GDP. Belgium has been running a current account deficit and a trade deficit. Where are the funds coming from to buy this amount of Treasury paper? Ironically, Belgium’s holdings jumped up significantly right around the time over $100 billion in Treasuries were removed from the Fed’s foreign custodial account (rumored to have been Russia’s bonds).
Please note: Brussels is the headquarter city for both the EU and NATO.
Something is seriously wrong behind the scenes and I have a bad feeling – as do many of my colleagues – that we might find out exactly what it is before the end of the summer…
By Dave Kranzler, Investment Research Dynamics