Since Feb 29th the majority of gold's big downlegs were caused by the selling-at-market-price of anywhere from 2500-15000 gold futures (GC #F) with no regard for price obtained and mostly timed so that the sales are closed to key support areas. Once these key support areas are breached as a result of this selling the algorithmic and real selling steps in and you then have a bonafide sell-off in gold. This has been done almost daily since the end of february but increasing in voracity beginning March 14th though current.
What i want to point out here is the timing, how it differs from all the other methods used before in one simple element and the voracity and depth in comparison to past similar periods.
Gold since August of 1994 has maintained a similar intraday pattern average with only short periods of deviation. Down during london hours and up during comex-asian hours.. The selling pressure in london is enough to keep gold from gong ballistic on a yearly basis and is a tried and true method that works. But london hours are too illiquid to unload 10k contracts at-market without catching some notice. Batches of 1500-2500 usually do the trick to maintain the london pressure and we see these sales during good times and bad times on an almost daily basis like clockwork. But when gold must be brought down in a bigger way we see the big comex session interventions. For instance 10000 at-market in tranches of 500 or so over the course of 1-2 mins can take $30 off price and if it's done above key support then you could take off another $30 depending on that day's market conditions and the importance of the particular support that was breached.
We've all seen this happen time and time again over the years.. But usually we see things return to the normal london selling pressure and comex/asian uptrend soon after. Since February 2012 this has not been the case. In this time we have a seen a relentless beat-down with no london participation at all. This is a 100% comex hours beat down using a method almost daily that has historically been reserved for one-off attacks (generally around options/futures expirations).
We have seen the most drawn out change in methodology my records show.
Feb 2012 Comex- Next day London AM Fix -.0864%
March 2012 Comex-Next day London AM Fix -1.913%
April 2012 Comex-Next day London AM Fix -2.447%
May 2012 Comex-Next day London AM Fix -7.124%
Historical average for comex-next day london fix is 5.5%
Here's london hours:
Feb 2012 AM-PM Fix -1.003
March 2012 AM-PM Fix -1.244
April 2012 AM-PM Fix +1.697
May 2012 AM-PM Fix +1.912
Historical average for london am-pm fix is -2.2%
This drastic a change in methodology says to me that something big is coming in the way of global monetary intervention to such magnitude that gold had to be brought down hard and fast when it reached that $1800 mark or the next round of QE (or whatever they may call it) would send price not to $2100 but to a higher and rather unmanageable number.
This next round will be a globally coordinated effort involving the PBOC, ECB, FED and all else who wish to see their currency depreciate with the best of them.
When?
If not at the June meeting the next chance would be fairly close to US election ramp up. If the Fed waits then it risks the chance of being seen as a "non political" entity and they have been very keen to maintain the opposite perception as of late.
Bernanke has everything he needs in the way of rising unemployment, inflation dropping, oil down by over -10%, European deterioration/contagion and of course stock market deterioration. Here we go..
My money is on June's meeting or even before as the meeting itself would remove the element of surprise and allow too many retail investors to score.
The past two days saw the DXY detach from it's normal reverse correlation with gold. DXY up/Gold up..all of a sudden....Hmmm..
Seems to me gold is sniffing this all out..
Gold was brought down in such a huge way to make room for the mother of all liquidity programs.
What i want to point out here is the timing, how it differs from all the other methods used before in one simple element and the voracity and depth in comparison to past similar periods.
Gold since August of 1994 has maintained a similar intraday pattern average with only short periods of deviation. Down during london hours and up during comex-asian hours.. The selling pressure in london is enough to keep gold from gong ballistic on a yearly basis and is a tried and true method that works. But london hours are too illiquid to unload 10k contracts at-market without catching some notice. Batches of 1500-2500 usually do the trick to maintain the london pressure and we see these sales during good times and bad times on an almost daily basis like clockwork. But when gold must be brought down in a bigger way we see the big comex session interventions. For instance 10000 at-market in tranches of 500 or so over the course of 1-2 mins can take $30 off price and if it's done above key support then you could take off another $30 depending on that day's market conditions and the importance of the particular support that was breached.
We've all seen this happen time and time again over the years.. But usually we see things return to the normal london selling pressure and comex/asian uptrend soon after. Since February 2012 this has not been the case. In this time we have a seen a relentless beat-down with no london participation at all. This is a 100% comex hours beat down using a method almost daily that has historically been reserved for one-off attacks (generally around options/futures expirations).
We have seen the most drawn out change in methodology my records show.
Feb 2012 Comex- Next day London AM Fix -.0864%
March 2012 Comex-Next day London AM Fix -1.913%
April 2012 Comex-Next day London AM Fix -2.447%
May 2012 Comex-Next day London AM Fix -7.124%
Historical average for comex-next day london fix is 5.5%
Here's london hours:
Feb 2012 AM-PM Fix -1.003
March 2012 AM-PM Fix -1.244
April 2012 AM-PM Fix +1.697
May 2012 AM-PM Fix +1.912
Historical average for london am-pm fix is -2.2%
This drastic a change in methodology says to me that something big is coming in the way of global monetary intervention to such magnitude that gold had to be brought down hard and fast when it reached that $1800 mark or the next round of QE (or whatever they may call it) would send price not to $2100 but to a higher and rather unmanageable number.
This next round will be a globally coordinated effort involving the PBOC, ECB, FED and all else who wish to see their currency depreciate with the best of them.
When?
If not at the June meeting the next chance would be fairly close to US election ramp up. If the Fed waits then it risks the chance of being seen as a "non political" entity and they have been very keen to maintain the opposite perception as of late.
Bernanke has everything he needs in the way of rising unemployment, inflation dropping, oil down by over -10%, European deterioration/contagion and of course stock market deterioration. Here we go..
My money is on June's meeting or even before as the meeting itself would remove the element of surprise and allow too many retail investors to score.
The past two days saw the DXY detach from it's normal reverse correlation with gold. DXY up/Gold up..all of a sudden....Hmmm..
Seems to me gold is sniffing this all out..
Gold was brought down in such a huge way to make room for the mother of all liquidity programs.
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