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Showing posts with label naked shorts. Show all posts
Showing posts with label naked shorts. Show all posts

Saturday, May 13, 2017

Gold and silver appear to have reached a bottom as record amount of short covering has taken place

The recent beatdown in the prices of both gold and silver has been relatively historic as up until Thursday, the metals had seen 14-17 straight days of declines.  And the reasons for this have been a combination of fewer buyers, negative sentiment, and massive short covering.

Bullion banks used this demise in sentiment as the means to smash down the price using tens of thousands of naked short contracts, and relied upon the predicted reactions of commercial buyers to close out their long positions when margins grew too high.  And once prices fell below not only the recent achievement of their 200 day moving average but also their 100 day MA, these banks began covering their shorts en masse leading to what appears to be a bottom for the metals at around $1215 for gold, and $16.25 for silver.

kwn-sentimentrader-iii-5122017

Wednesday, May 3, 2017

Schizophrenic gold market has highest level of long open interest since November while price continues to drop

Despite the fact that naked short contracts for gold (and silver) in the future's market continue to be dumped by a combination of bullion banks, hft algorithms, and perhaps even the Federal Reserve's own trading desk, open interest on the long side of the monetary metals continue to increase as well.  And while this buying has not been enough to keep the price from falling close to $50 over the past three weeks, geo-political events coupled with what appears to be a declining economy are leading investors to rush into gold at levels not seen since last November and following the Presidential election.

Investors continue to pour their money into the safe haven of gold, pushing net long positions of the precious metal to their highest level in five months. 
Amid rising tensions over the nuclear issue on the Korean Peninsula, surprise missile strikes in Syria and the first round of the French presidential election, investors have felt little need to pull out their assets out of the precious metal. Instead, a series of events have led net long positions of gold to reach 200,677 contracts, or 624.2 tons, as of April 25, up 2.5% from a week before, according to the U.S. Commodity Futures Trading Commission. The position marks the highest level since early November last year. 
Meanwhile tensions on the Korean Peninsula remain, as North Korea on Monday suggested that it would continue its nuclear weapons tests despite repeated warnings from U.S. President Donald Trump. 
While some concerns are lingering, other political risks are looming too. The latest one is the tax reduction plan proposed by Trump last week. The proposal, which would cut corporate tax to 15% from 35%, is seen as unlikely to win support, and "investors are questioning its viability," said Koichiro Kamei, a financial and precious-metals analyst. "Uncertainty is spreading over the Trump administration's ability to deliver on its promises, and it is making investors reluctant to let go of gold." - Asia Nikkei

Wednesday, April 19, 2017

Deja vu as traders dump another $3 billion in naked gold shorts following UK's vote for snap elections

Just as with yesterday, it appears that the market manipulators are desperately trying to beat down the gold price as geo-political events continue to dictate the global narrative.  And with 22,000 naked short contracts not being enough to kill sentiment in the gold market on April 18, either the same or some new bullion bank upped the ante with a 25,000 contract short earlier this morning.


In fact today's gold price manipulation occurred shortly after news hit the wire that the UK Parliament had approved Theresa May's request for snap elections, and for Britain to accelerate their plans for leaving the EU.
As totally expected, Theresa May - following a contentious debate - won the UK parliament vote to allow a June 8th snap election by a count of 522 to 13, well above the two-thirds majority needed. 
Opposition leader, Jeremy Corbyn welcomed the poll but accused the PM of changing her mind and breaking promises on a range of issues. 
The result triggers what will be an intense seven-week campaign in which the U.K.’s relationship with the EU will be the focus. - Zerohedge

Thursday, January 12, 2017

Gold up over $1200 and crosses 50 day moving average setting the stage for a move in either direction

The gold price crossed an important psychological barrier in early morning trading on Jan. 12 that places the metal at a crossroads to either move extremely higher, or fall back if it fails to hold the key resistance level.

On Thursday gold went above $1200 for the first time since its severe beatdown following the November Presidential elections when bullion banks dumped so many naked shorts into the futures market that it was the equivalent of three years worth of mine production.  This led to gold falling below its 50, 100, and even 200 day moving averages until it settled at a bottom of around $1125.

Since then however, it has begun a steady climb back to $1200, aided by investors covering numerous amounts of short positions that in some cases went back to bad bets made during the time of the Brexit vote.

However now that it has breached its new 50 day moving average, it will take on some strong resistance that should it succeed in holding this price, will assuredly move much much higher as loss of confidence in global currencies will aid in the move once again towards gold.

As one can see from the daily gold futures price chart below, it breached the 30-day SMA of $1,161.82 with a strong bullish candle. The commodity will now face stiff resistance from expected selling pressure near $1,200, which earlier acted as a crucial support. Calls of $1,200 as support are still etched in my mind, but probably too much faith was put into that. The 50-day simple moving average of $1,200.98 will pose additional stress on the commodity. But I am optimistic, and with adequate time and patience, the metal can cross this bear's mansion as well. - Seeking Alpha

Sunday, November 27, 2016

Spread between London paper gold price and Shanghai physical price now at $15

Over the past 35 days the spread between the daily AM and PM gold price fixes set in London and in Shanghai have steadily moved apart as the physical markets in China break away from the prices set in the Western paper markets.

Back in late October we began to see the difference in price grow to around $5, with the spread then moving to a difference of $7 just two weeks later.  But with the London and Comex paper markets crushing the paper spot price back under $1200 per ounce since the Presidential elections on Nov. 8, the physical markets in Shanghai have not seen fit to accept these prices based on the actual rising demand in their own exchanges, and are reflecting it in price as the spread on Nov. 25 is now a whopping $15 difference.

The gold premium on the Shanghai Gold Exchange soared as high as $30 Thursday before easing back to a still historically high level of around $15 on Friday, reports MKS (Switzerland) S.A. On Thursday, the “feature of the day was the SGE premium, which rose to an amazing $30 over the loco London gold price, the loftiest levels seen since 2013,” says Sam Laughlin, precious-metals trader with MKS. “The difference between then and now, however, is now the high premium seems to be more a factor of a supply shortage in mainland China as opposed to outright demand. As a result, despite the high premiums this week, the turnover has not been anything enormous.” The premium fell by roughly half on Friday, he continues. “While still elevated, we did some fatigue creeping into the Shanghai premium today, 'easing' to around $15 relative to loco London gold.” - Kitco
London Gold Fix, November 25, 2016

Shanghai Gold Exchange Gold Fix, November 25, 2016

As central and bullion banks in the West continue to beat down the price of gold in their paper derivative markets, the spread between the Asian physical and Western paper gold prices will continue to widen.  And at a certain point, producers of gold will find it much more profitable to simply ship their metals directly to China rather than to continue to supply the Comex or LBMA, who's manipulation of the spot price using 100's of naked short contracts no longer reflects the true price of the precious metal.

Saturday, May 28, 2016

Well respected London metals analyst says to ignore recent pull backs as gold consolidating for next run to $1400

The drop in gold prices over the past two weeks has had little to do with interest in the actual metal and more to do with the U.S. central bank having to implement desperate measures to protect the currency from falling below 92 on the index.  In fact, it was nearly unprecedented what regional Fed Presidents did last week by having four of them publicly attempt to promote a rate hike in June that may or many not actually occur.

As we learned a month ago from regulators investigating Deutsche Bank, manipulation of gold prices is a real thing and has been going on constantly since 2011 when the price reached an all-time high of $1940 per ounce.  And the dichotomy of course is that while interest and purchasing of both paper and physical gold is at their own all-time highs, the price continues to fall, meaning that the central banks know what would happen should investors wake up to the fact that the economy is not in as good of shape as they have been attempting to portray.

So with this in mind, and the fact that despite a pullback of the gold price from just under $1300 to where it sits now at $1213, remember that we are still up 16% from the beginning of the year, and that manipulation during a time of heightened buying will only mean an explosion in price when even the slightest bit of tension is relieved.

And this is what well respected London metals analyst Andrew Maguire sees also as he looks towards the next leg up which will be around $1400 per ounce.

Andrew Maguire:  “Whenever we see such a synthetic divergence develop between the wholesale physical markets and the paper-centric non-delivery markets, it allows the commercials (and central planners), who have exposure to the physical markets, to not only take the short side of these naked longs, but to do so with impunity… 
Andrew Maguire continues:  “Bear in mind that the bulk of these naked short commercial positions were only able to be added above rising aggregated physical interest levels, but exponentially larger in defense of the Rubicon line at $1,308, a breach of which would threaten what is known as a ‘commercial signal failure.’ We came close to triggering this commercial signal failure but without the close proximity of an underpinning physical market, a short term price gap had been opened which was easy for commercials to fill on the downside. 
That is exactly what we have just witnessed — a price gap that closed on the downside, and as is par for the course, we now have the same hot money rinsed and wrong-footed, which is the polar inverse situation of what was occurring near $1,300. The hot money is now overshooting to the downside while the commercials are profitably covering all the naked shorts they added. Commercials are also going long to hedge physical exposure at these levels. This action is no more than healthy backfilling with a fresh, higher stair step being cemented for a sustainable move into and eventually through the $1,300’s.” - King World News