Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Global Precious Metals Market Dirty Tricks for Beginners

Commodities / Gold and Silver 2021 Nov 04, 2021 - 01:31 PM GMT

By: MoneyMetals

Commodities

Although precious metals are still relatively under-owned and unloved, retail investors have been pouring into the metals markets since early last year.

Lots of newer investors have high hopes about where prices are headed in the near term. Even seasoned metals investors are optimistic about the current set-up for higher prices.

The difference is that seasoned investors also know they may not get what they expect.

When it comes to the metals markets, fundamentals don’t always matter in the short run. Successful bullion investing is about persevering when the market does the opposite of what you anticipate, and that happens a lot.


Craig Hemke with TFMetalsReport.com covered last week’s price smash in gold.

“So now, in total over just the five-day period of last Friday through yesterday, price was actively capped at the 200-day by The Banks adding a total of over 30,000 new gold contracts. Yes, that's 3,000,000 digital ounces created from nothing and dumped on the Spec buyers. And yes, 3,000,000 ounces is almost 100 metric tonnes.”

While investors bought near record amounts of physical coins, bars and rounds, somebody sold almost 100 metric tonnes of paper gold in the futures market.

Supply and demand for physical metal is disconnected from the futures market where the base price for metals is still being set. Wall Street, with plenty of aid and comfort from central plans, are known to intervene in the leveraged markets to push around the price.

Some key components make it all work. One of the keys is to capture the regulators. There has been a parade of former regulators getting high paid jobs with the banks. The relationship between Wall Street and Washington DC is the absolute best that money can buy.

This is how bullion bankers cheat their own clients and other honest market participants.

The evidence is public, and the fraud has been widespread. Occasionally the cheating is too much for regulators to ignore.

Unfortunately, most crimes go overlooked, the fines paid represent a slap on the wrist, and the bankers maintain their privileges for trading in markets they have at times manipulated.

Another factor is high leverage. The bullion banks are trading with counterparties who are leveraged at least ten to one but don’t have deep pockets.

So those well-financed traders can orchestrate a price smash by selling as much paper metal as needed to get prices moving lower -- just as they did last week. As prices fall, they can count on weak-handed longs cover to cover their losses (and the bank’s gain).

The sad reality is that bullion banks can wield significant control over the paper price in the short term.

One might wonder what keeps this problematic futures market intact? Legitimate hedgers do use it as a vehicle for price certainty. Silver producers can sell silver at today’s price and ensure profits on the metal they intend to produce in the months ahead

A never-ending flow of fortune seekers walk through the front door of the rigged futures market casino. They see the incredible fundamentals for gold and silver and expect prices to explode.

These hapless speculators make two wrong assumptions. They think supply and demand for physical metal matters in the futures market. And they may not realize the banks aren’t selling actual metal. They just peddle paper contracts with metal written on them -- and the supply is unlimited.

They also assume they will be treated fairly. We would refer them to WallStreetOnParade.com as a cure for that type of naivete.

Metals do perform well as an investment and as a store of value over time. Aside from avoiding the futures markets and instead focusing on buying physical, investors need thick skin, patience, and resolve. Gold actually outperformed stocks, the darling of bankers, over the past two decades.

By Clint Siegner

MoneyMetals.com

Clint Siegner is a Director at Money Metals Exchange, perhaps the nation's fastest-growing dealer of low-premium precious metals coins, rounds, and bars. Siegner, a graduate of Linfield College in Oregon, puts his experience in business management along with his passion for personal liberty, limited government, and honest money into the development of Money Metals' brand and reach. This includes writing extensively on the bullion markets and their intersection with policy and world affairs.

© 2021 Clint Siegner - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in