How the gold market was crashed

So what to do?

The only way out of this dilemma for the market controllers would be to devise a plan that would collapse the market and trip up all the stops at the correction lows in gold of $1,525 thereby setting off the stop loss orders under this important market low. And what if the plan included a way to stop the physical market from purchasing gold under $1,525 while that correction was underway? That would be brilliant.

And how can that happen?

They have to hatch a plan and carefully orchestrate it in a series of events that takes the gold market completely by surprise and force players out of their long positions.

Read on for today’s lesson in market manipulation and allow me to relay my speculation about what transpired last week.

A successful ambush usually involves surprise. And the surprise requires a carefully orchestrated setup. So now let’s get a look at how the crash was prepared.

The FOMC minutes from the last meeting were due for release during last week. But a funny thing happened. They got released EARLIER than expected. It was all a big mistake and the FED let the SEC and the CFTC know right away that the error had occurred. And lo and behold, despite the FED’s transparency and newly crafted reputation for delivering timely and accurate reports, there happened to be some language we didn’t get updated on until the FOMC minutes were released. The notes say that several members have been discussing cutting back on the stimulus. That was strike one. It got the gold market thinking that stimulus cuts might be coming.

Strike one called by the umpire.

Surprise number two appears.

A bombshell was released from news sources. It was reported that Cyprus would have to sell 400 million Euro’s of gold as part of the bailout package of raising money for their failed banking system. Gold prices came down to $1,550 on the news and the day passed by. Even though Cyprus bankers tell us the next day that they didn't discuss selling any gold, market jitters remained with Friday just around the corner.

This was strike two.

Now we need a strike three and you’re out.

Gold is a nervous market to begin with as a lot of people have already lost a lot of money in the last six months. With Gold at $1,550, all that is needed for the market to drop is to get one more push where all the stops are. This price level was just below the two-year low of $1,525.

With the setup in place the final pitch was ready to be delivered.

Selling began in the Friday sessions overseas. By time we got to the New York COMEX gold open, price was down to $1,542. Now all the players were on the scene, in the game and ready with volume and liquidity to create the final blow to the gold market.

Then the attack began. Wave after wave of selling pummeled gold until it got to $1,525. Then the break down of price below the two year low and all the stops that have been accumulating there start getting executed. Selling then accelerates as it begins to feed on itself.

Originally published on Resource Investor. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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