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Old 03-08-2012, 08:22 AM   #1
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KWN's 'London trader' says massive physical orders fulfilled in the last couple of days

Quote :
... “Yesterday when we dropped through $1,700, you would not believe the amount of physical tonnage orders that filled. US centric traders tend to concentrate on the COMEX, but the real market is made in London.”

“The commercials have been covering their short positions and the local traders are all short at this point. All of the guys who were long and vulnerable at the highs, are now short and vulnerable and this exactly what we need to make a bottom.

These momentum traders ran into a very large sovereign order near the $1,680 area. When gold broke through $1,680 there were layered physical orders. Over 40 tons of physical gold were filled below $1,680....

“These physical orders increase exponentially in size going all the way down to $1,650. The bullion banks know that these orders are down there, but obviously it’s all about where the lines cross. So, as I said, these bullion banks are covering like crazy right now.

These high frequency traders and locals are so lopsided short at this point that they are just being used by the commercials. So, not only are the commercials heavily covering short positions, but the actual amount of paper tonnage that was converted to actual physical on that dip yesterday is significant.

Some of it, no doubt, is to pay for some of the leases that were underwater from the bullion banks. A big chunk of it though, is physical metal that is going to disappear to Eastern vaults.

What’s also happened is a lot of the spot buyers, who have not converted to physical yet, have indexed themselves to spot and are now converting those spot contracts in to physical and will continue to do so for the next three to five days. So these paper raids have an enormous impact on the underlying physical market.

This morning on the am fix in London, a very large number of spot indexed buyers converted to physical. At the pm fix today in London, a very large number also converted to physical. What is happening over here in the physical market in London is totally missed by the US centric short-term day traders.

Quote :
... When silver took out $33, a huge amount of physical orders were filled.”

“The Chinese are doing the exact same thing in the silver market that they are doing in the gold market, massive accumulation on dips. It is also important to note that the local traders in silver are short and nervous. Everyone is short silver and so that market can move violently higher when it turns.

When silver reverses, it will be the one that leads the market higher. Also, the commercials have been covering in silver the same way they have been in gold....

“The physical silver orders that were just filled have been waiting since February 16th. Those orders near the $33 level were filled in huge size on Tuesday. These long-term accumulators are buying every dip. There were some fills at $34, but some very large orders were filled near $33.

As long as we stay under $34, there is going to be constant accumulation. What does it matter if you buy silver at $32 or $38, when it is going to go multiples higher from these levels? The Chinese know this and that is why they are accumulating in size.

What is happening here is essentially criminal, but the smart money is capitalizing on it by accumulating. They take advantage of the manipulation. Remember, a lot of this is spot indexing that will be converted to physical over the next few days.
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