Hedge funds’ bullish bets on gold jump to four-year high
Hedge funds and other large speculators boosted their net-long position in gold.
Shortly after the opening of trade on the Comex market in New York on Friday the gold price plunged more than $30 an ounce to an almost three-month low of $1,259.60 an ounce.
Chicago’s CME Group, which operates Comex, said at around 8:42am Eastern time a 10-second stoppage occurred after a volatility safety mechanism was triggered, apparently after a 2m ounce order was executed.
The exchange said the market functioned as intended and that all trades will stand.
Veteran trader and Wall Street legend, Art Cashin, who is also director of floor operations at UBS spoke to King World News about the “strange happenings in gold”:
Well, it (gold) is under some pressure. And while I am far from being a conspiracy theorist, I could see where some of the people involved in that asset class would be concerned because we’ve had several incidences of very large sales.
And they all seem to come at approximately the same time in the relatively early morning in New York, usually before the stock market has opened. The question there is, why would you suddenly dump a large amount of gold? Why wouldn’t you try to piecemeal it out over the (course of the) day?
So, if that happens once it could be an accident of technology, or it could be a simple error. But when it happens 5 times over a period of months, it does raise questions. Is it being done purposefully? Is somebody trying to send a message? Is somebody trying to influence the market?
We don’t have enough details, but as I say, as a guy who doesn’t ordinarily believe in conspiracy theories, I think there should be some further investigation as to who is selling, and why always at that time?”
Friday’s violent swing pales in comparison to gold’s $200 an ounce drop over the space of two trading sessions in April.
According to some traders that decline was triggered by a short seller pushing through two trades – one of 3.4m ounces and then a 10m ounce sell order – within a 30 minute period which panicked the market and set up a sustained period of selling of the metal.
The paper market for gold has grown exponentially in recent year with daily trading volumes now reaching $240 billion a day, much more than the S&P 500 and Dow Jones stock markets combined.
FLASHBACK: One short seller’s ‘shock & awe’ crushed gold with a 400 tonne trade
6 Comments
Silver T. Rader
Of course, CNBC, Reuters, Bloomberg, and the other sources would never bring up this logical and factual observation. The pretend regulatory agencies won’t do anything except paper-over the facts behind it.
This lack of trust and lack of a fair playing-field is why investors are leaving Wall-Street. Lack of trust in Wall Street is destroying jobs and investments.
Look at the headlines “400 tonne sale”, yet there is not one ounce of evidence that anything related to “physical gold” actually traded hands. Who actually walked away with 400 tonnes of physical gold? Who walked away with a kilo of physical gold? Was this just spoof trading by the Hunt Brothers Ghost?
Like the US Budget Debt debate with QE, we are discussing make-believe-revenue to support make-believe-funding that we don’t have to pay off paper contract promises in some mythical alternate reality future. This financial leadership in the Beltway has infected Wall-Street like a bad zombie movie.
Gold / Silver ETF regulators are playing some weird fantasy game of “dungeon and dragons” found at the NYC Comic Con. Once Comic Con realized ETF Regulators might be involved, they demanded everyone “take a bath” to remove the stench of who they were. “Dungeon and dragons” fans could hardly be blamed for not being able to stand those ETF regulators.
Apple
This appears to be deliberate market manipulation. this type of action should be illegal or at least transpartent with all knowing the buyers and sellers. this give legitimate traders information how the market is being amipulated and make better
decisions
esqualido
Could it be a prelude to a Comex delivery failure in which they get to cash settle at an absurdly low price?
MIKET
If memory serves, back in the 70’s when silver (and gold) prices rose and rose and rose all sorts of rules were introduced at the time along the lines that large futures holders also needed to prove ownership of physical metal. Anybody suppose some similar regulations are needed now for these massive sellers?
Patricia Broadway
These things would not happen if everyday people were not long in the paper market. If they want to own gold, buy the physical that they can afford. This will hurt the comex and take the power to steel the little person’s money away from the big bankers. Let them steel from themselves, but then again, they are all one in the same. All part of the fed
LAMB
Definitely a Market Manipulation – but with the FED all tied up now, no one is watching closely, so they continue to manipulate – the #1 contributor is GREED.