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Major Gold And Silver Price Suppression Now A Weekly Occurrence. So What?

By Patrick A. Heller
Commentary on Precious Metals Prepared for CoinWeek.com

Over the past four weeks, the prices of gold and silver have experienced a major decline once each week.  Last week, the suppression occurred on Friday, April 13 during the last 15 minutes of COMEX trading, between 1:15 and 1:30.

How is it possible to identify this event as a manipulation rather than just the actions of a free market?  Unfortunately, that is becoming quite easy to detect.  Significant price moves resulting from market developments rarely occur in a vacuum.  If investors were worried about falling demand for commodities, you would see price declines in a number of industrial metals as well as precious metals.  If investors perceive a greater likelihood of another round of quantitative easing, the value of the dollar would tend to drop as US stock markets rise with gold and silver prices.

Last Friday, there was no particular news that should have led to a major impact on gold and silver prices.  There were no sympathetic moves in other markets in conjunction with the decline in the value of precious metals.  So, what did happen?

In the 15 minutes before the COMEX close, 10,000 gold contracts changed hands.  Normally a high percentage of COMEX trading occurs within the first two hours of a trading day.  The trading of 10,000 contracts going in to the close is highly unusual, to say the least.  These 10,000 contracts represent one million ounces of gold, valued at well over $1.6 billion.

At all times in the COMEX market, there are posted bids and asks.  An investor makes a transaction by accepting either the posted buy or sell price.  Since the price of gold declined about 1% during the last 15 minutes of trading, that shows that almost all of the high volume of trades were made by sellers hitting bids.

The entire trading pattern reflects that the sale of so many contracts was done specifically to drive down the COMEX closing price of gold.  Any smart investor seeking to sell so much gold would try to do so for the highest possible price.  That would be accomplished by spreading the sales over time and among different brokers.  Further, a smart seller would do everything possible to avoid pushing down prices going into the COMEX close.

When you combine the quantity of gold contracts sold with the time of day that they were sold, the reasonable conclusion is that these were coordinated sales made solely for the purpose of driving down gold and silver prices.

The same suspicious selling occurred the previous week at 2 PM (Eastern) April 3 on the release of the minutes from the most recent Federal Open Market Committee.  Within 30 minutes the quantity of silver sold equaled 80% of annual worldwide mining production.  The deluge of sales started right as the minutes were being released.  These were not sales by people who read the release and then decided to sell on the basis of the contents of the minutes.  No, these sales were planned in advance.

I have previously warned my readers that markets will be more volatile as we get closer to the time when I expect gold and silver prices to soar.  When the US government needs to work with its trading partners and allies to engineer a major price suppression once a week, we are getting a lot closer to the day when such tactics will no longer work.

Patrick A. Heller owns Liberty Coin Service and Premier Coins & Collectibles in Lansing, Michigan and writes Liberty’s Outlook, a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at http://www.libertycoinservice.com. Other commentaries are available at Numismaster (http://www.numismaster.com under “News & Articles). His award-winning radio show “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 AM Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at http://www.1320wils.com.

Patrick A Heller
Patrick A Heller
Patrick A. Heller was honored with the American Numismatic Association’s 2012 Harry J. Forman Numismatic Dealer of the Year Award. He owns Liberty Coin Service in Lansing, Michigan and writes Liberty’s Outlook, a monthly newsletter on rare coins and precious metals subjects. His award-winning radio show “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 AM Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at http://www.1320wils.com). He is also the financier and executive producer of the movie “Alongside Night”.

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  1. Patrick,
    Nice article and the facts make the gold sell offs seem linked to “unusual activity” to say the least. With country after country in money printing hyperdrive mode, gold should be at $5,000 per ounce. Give it time – ultimately, gold will soar as the world drowns in worthless paper money.

    BTW, why would the Fed and government not be manipulating the price of oil lower, especially with an election coming up?

    • That’s an easy question to answer, Bill. The gold market is a very narrowly traded market with very limited inventory. The oil market, on the hand, is gigantic by comparison. So the amount of money needed to manipulate it would be correspondingly much, much higher. I’d reckon (at a guess) that the money involved would have to number in the hundreds of billions at least, not just $1 or $2 billion. Manipulation at that level would be obvious to even the most jaded observers who currently claim that gold isn’t being manipulated.

      • I agree, but another imp. aspect is that the price of oil is determined to a significant degree by outside events like tension in the Middle East and Iran. Governments do have a role in issues like imposing sanctions on the importation of Iranian oil, which impact the oil market, but for the most part, these international factors are beyond the control of any government or group of governments.

  2. Andrew Jackson was described as “brimming over with superfluous courage,” and “he is not a man you can fight against,” not so our timid silver mining execs, except for the boss at First Majestic and a few in some juniors. As a collective PM mining execs make not a whimper as the price of their product is abused and toyed with, and their shares are of unusual interest to elite shorts hammering at them. What should stand tall as an Alp is held flat as a pancake to help prop up noxious legal tender the Fed spits out, and the belief that precious metals will never trade in a free market is huckstered as eternal as the constellations. Persons forced by sudden necessity to sell are pillaged at lowball prices and investors are denied their true net worth. The rapacious Silver Users Association, however, would emotionally rave that silver is criminally overpriced. If offered to them for free they say “we can beat that quote!” Next comes another aggravated perma bear warning that silver is in danger of falling below the price of manure (so dump your hard metal now he warns with his witch finders tone), while Miner Warner and the organization he heads exerts itself to prevent the small folks from getting ahead by owning silver/gold shares and hard PM. At http://www.frauncestavernmuseum.org/magna_carta/MCFFBrochVer071409_WEB.pdf Warner’s name is on the right hand side showing the organization of which I refer, the central committee of metals suppressors and synthetic currency creators documented at great length in the 100% free access Silver Stealers documentary.

    • LOL, nice rant Charles! And 100% correct.

      One thing that makes the suppression seem obvious (to me, at least) is that gold and silver prices often collapse simultaneously, despite their wildly different fundamentals in terms of usage. Gold is almost entirely a monetary metal (yes, I know its use in jewellery is a major component in demand, but I see this as being intimately – and reciprocally – linked to its demand as an investment) whereas silver is used very widely in industry. You’d expect silver’s price moves to more closely mirror copper’s…. if it were true free-market price discovery that was driving prices.

      Clearly, it’s not.


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