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Rigged HFT-Driven Paper Trading Drives Gold Lower Today – Dave Kranzler

Monday, May 9, 2016 10:48

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(Before It's News)

TND Guest Contributor: Dave Kranzler

I want to preface this commentary with the “proviso” that I have no idea how violent to the downside this attack on the precious metals will get. No one does. It could end today; it could end at the 50 dma (approx $1,248 on the front-month paper gold instrument traded on the Comex); it could go all the way down to the 200 dma. Even the banks who are driving this activity have no way of knowing.

Gold began selling off as soon as the Globex Comex computer system opened for the weekSunday evening (6:00 p.m. EST). But the distinctive “waterfall” price plunges did not begin until about 30 minutes after the open of the Comex floor trading at 8:20 a.m EST (Click on the image to enlarge). This trading pattern is characteristic of the paper bombs the bullion banks throw at the market in order to trigger the stop-losses set by the hedge funds. The trading is mostly computer-based. Trading volume was light compared to the spike up on Friday after the jobs report, which makes it easier for the banks to plunge the market.

Note: if anyone wants to learn about the mechanics involved in “plunging” the markets, read “Reminiscences of a Stock Operator” by Edwin Lefevre. It’s the unofficial biographical accounting of Jesse Livermore. It’s a must-read for anyone who wants to understand the extent to which the current market is rigged. The only difference between now and the 1920’s is that now the Central Banks are directly behind the activity and they are driven by an entirely different motive than that of Jesse Livermore.

Speaking of the jobs report, the most idiot attribution for the sell-off in gold comes from Investing.com – LINK – which “informs” us that gold futures fell overnight because “investors viewed Friday’s jobs data as less disappointing than first thought.” I don’t really know how to respond to that assertion other than to question the author’s relative level of intelligence.

This is an HFT computer algo attack operation. They have a problem with the physical market. I surmise that it’s worse in silver than in gold. Gold is now only 1.4% away from a 50 dma “correction.” The 50 dma has been pretty good support. There’s a good possibility that the 50 dma will “stop” the sell-off. If not it will drop pretty quickly to the 200 dma. Either way, the only way to take advantage of this is to add to positions with every “step function” price plunge lower. The market sentiment levels per Marketvane and the HGNSI are still not even remotely close to levels that indicate a contrarian sell-off is likely.

In fact, if anything, the continuous flooding of anti-gold propaganda from the media and Wall Street convey a sense of desperation from the powers that be that derive their “power” from an ability to control fraudulent fiat currency.

I am using every step down in gold to move more money into my BitGold account. The account functions almost like a checking account. You get assigned individual kilo bars or interest in a kilo bar when you move money into the account. You benefit to the upside when gold shakes off the intervention and moves up again. You also can get a Mastercard that lets you access the funds easily. The best part is that BitGold operates outside of the Central Banking system. If you’re curious about it you can click here.

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About Dave Kranzler:

I spent many years working in various analytic jobs and trading on Wall Street. For nine of those years, I traded junk bonds for Bankers Trust. I have an MBA from the University of Chicago, with a concentration in accounting and finance. My goal is to help people understand and analyze what is really going on in our financial system and economy. You can follow my work and contact me via my website Investment Research Dynamics. Occasionally, I publish on Seeking Alpha too. As a co-founder and principal of Golden Returns Capital, LLC Mr. Kranzler co-manages the Precious Metals Opportunity Fund, a metals and mining stock investment fund.