WHY don't YOU ask the person or party that dumped that amount of paper onto the market in such a short amount of time? Any answer that you are going to get on this forum is going to be assumption, surmising, suspicion, guessing, whatever... even the folks over a ZeroHedge don't know the real reason(WHY) and just reporting on the gossip and rumours of WHY this happened. Both 'Ronnie666' and 'wrcmad' replied to your question with their opinion and reasoning based on their observation and experience which also happens to present an opposing viewpoint, but neither of them 'KNOW WHY' and most likely never will. So take the replies given and form your own opinion and stop looking for answer in the wrong place. And just for the record... I do not know 'WHY would you dump that amount of paper onto the market in such a short amount of time.'
paper silver............the great evil..... so what will the excuse be when silver actually returns to a bull market? it is the same paper silver......I doubt people will be too fussed then.
As Silver Pauper stated we dont know the exact reason why they dumped 2 Mill oz of gold this past Friday. What we do know is that these dumps occur at thinly traded times early in the morning, usually on a Friday and when few people are around. In 1999 when Gordon Brown dumped the UK gold on the market, advertising the sale and driving prices down we did not understand at that time and for years after, that this was a ploy to bail out the UK banks of their short positions. Clearly this theme continues but now the US government is trading these markets. The PPT is in the market every day (chaired by the Fed (Bernanke) and the Treasury (Lew)) to prop up the stock market and drive down the gold price. Every day they are active and yes we have a good idea why they do this. There are now very few gold and silver experts that do not believe the government/bank alliance is not manipulating all these markets. The average stock and bond trader also know but do not care as they have his back. So in summary we have the PPT in the US smashing PM prices, The Indians raising tariffs on Gold, The Germans raising tax on silver (7% no to 19%). Yes this is global manipulation and no it will not be effective for much longer. it never is.
Depends on the circumstances. I dumped gold on the sales thread of this forum myself in July this year. Mint condition Perth Mint certicards at spot. I wasn't interested in picking up the true value (premium). I wanted it gone for the cash. Why? Because I at the time I had the opportunity to buy gold at less than 80% spot. So it was an arbitrage for me - perfectly plausible, and not some manipulative or underhanded BS. I will repeat my answer - "There are a million plausible reasons for selling any asset at any time." Just because you are annoyed by not knowing the answer does not make the trade manipulation. Maybe there was a better opportunity to be had? It is clear you are not aware of the complexities and linked-relationships of some of the trading strategies of the big guys. They do not simply buy and hold. Have a look at what a gold carry trade or statistical arbitrage involves, then the plethora of possible reasons for a dump will become much clearer. Oh, BTW, your method of self-affirmation using a "spud count" is very characteristic of the same method used by permabulls to rebuff a wrong price forecast and pass blame to a smackdown. Either that, or you are infatuated by my spuds.
So here we have it folks wrmad's answers to the question of why dump gold in thin trade in such a short period "Answer: Because someone didn't want it anymore." "There are a million plausible reasons for selling any asset at any time." Bwaaahaaahaaaahaaa "not knowing the answer does not make the trade manipulation" Agreed, finally we see common ground, what it does though is ask what the seller's motivation was. with regard to your sale, you had a ready market who could offer reasonable prices allowing you to agree to the terms of sale in a reasonable period of time no doubt, your motivation was to buy another supply at a discount to spot, so well done you Did you trigger any margin calls, stop losses, did spot fall through the floor when you sold them? See wrcmad, I suspect not, your motives were personal and they certainly didn't affect the global gold market in all its various forms, why because it was a trivial exchange given plenty of time for a reasonable sale to pursue. Admittedly my 100 sov sale example would not have either BUT wrcmad I suspect the sellers that dumped a massive volume of paper in thin volume had a motive and as it turns out, when one dumps huge volumes onto a market in thin trade in a short period of time, the POG plummets, could it be that the motive, to see the POG smashed, it certainly broke TA trends (I figure you know a dam sight more than most on this subject) I smell a rat, I suspect that the safe haven status of gold is being trollied to try and save the US dollar from falling up it hole along with the fiat QE circus with it "Either that, or you are infatuated by my spuds. smile" Bloody touche mate, I'm not even going to offer a comeback, please bathe the glory of finally being entertaining, you caused lemonade bubbles to go up my nose when I read it, well done
"There are a million plausible reasons for selling any asset at any time." This reminds me of an old Jewish rule of investment, NEVER sell an asset! Once you have it, add to it and borrow against it, but NEVER sell it. OC
Alfie, You are not looking for answers, you are only looking for and accepting opinions that support your presumption of market manipulation as the motivation for the trade in question. Again both Ronnie666 and wrcmad replied to your question and again presented a differing opinion and point of view... you have not even bothered to acknowledge that Ronnie666 took the time to write a rather detailed and referenced opinion, instead you are trying to prove that wcrmad is wrong in his opinion and viewpoint. You will never prove wcrmad wrong or Ronnie666 right... I respect the opinion of both and I am especially glad that wcrmad is willing to play the devil's advocate to make us consider the possibility of alternative motivations for this nefarious trade. As best as I can read, wcrmad has never said that this trade was not about market manipulation, but rather that since he cannot prove the trade was purely about manipulation, he is considering all other possible motivations and options and presenting them here for consideration. Look at your own reply... While you are entitled to your opinion and viewpoint based on suspicion, probability, and gut instinct, you are no closer to actually knowing the actual motivation of the trade than Ronnie666, wrcmad, or myself. For myself, I have looked at the replies of both Ronnie666 and wrcmad, done some research and due diligence and believe the answer lies someowhere in the middle... the trade was made to move the market in a desired direction, but I am rejecting the idea that the was done to suppress gold prices or prop the US dollar, but the motivation was to make to a huge profit... so in other words... the trade was made to move the market in a desired direction so a lot of money could be made by players on one or both sides of the trade. Do I know the real reason... no... but that is my opinion and viewpoint on the trade in question.
Thankyou SP. It's nice to know there are some rational thinking members here. Pure assumption, but I guess it fits well with your need to be right. When you have a better answer than "I smell a rat, I suspect..", then feel free to come back and berate me for mine.
Hi and thanks for your input would you mind editing this please as i'm not clear on what you are saying? "but I am rejecting the idea that the was done to suppress gold prices or prop the US dollar, but the motivation was to make to a huge profit"
I will try to explain my position, I may need help from wrcmad and others that have a better understanding of the world of financial trades and swaps... so feel free to correct and critique as needed. Of the many possible motives for this trade, two motives could be political or profit based... to suggest the trade was done to suppress the price of gold or prop up the US dollar implies a political motivation, which could be the case. But the trade could have been done purely for profit-taking with no care about the price of gold or the condition of the US dollar, as trade made purely on the amount of money to be made. I have a personal friend who spent his life working as member of a team that traded Forex, derivatives, commodities, bonds and securities. This team would spend weeks and months putting together one trade which could involve competing parties, any number of nations, currencies, commodities, swaps and heaven knows what else. These trades were no ordinary trades, these trades were planned with military precision down to the finest detail, the trade would be many trades covering a broad spectrum of markets and instruments involving huge sums of money that required a specific set of market conditions to trigger the first trade which then triggered another trade then another trade then another trade... like a falling set of dominoes... these trades are so complicated and complex that you have to be a mathematical genius and markets guru to understand them. These trades would reap profits in the billions of dollars in matter of minutes, there was not political motivation, only pure profit-taking. Market manipulation was the order of the day and was not denied by anyone involved. To give you an idea of complexity of these trades, it could run something like this... borrow Japanese yen at 0.5% or some ridiculous low rate to buy USD which were used to attack the bond market, then the bonds were swapped for something else, the gold market would be hammered one way or the other... as you can tell I am lost at this point... then a few more buys, sells, trades, swaps, and eventually the loan for the yen was repaid and the profits counted. The smallest profit his team ever recorded was $40,000,000USD and the record was in excess of $500,000,000,000USD(that is billion). The scale of these trades is mind-bending... the team nearly broke the system by buying over $1,000,000,000,000USD(that is trillion) on one trade. That is why it is called market movers, the sums of money are simply so large that the market cannot absorb them and markets are deliberately moved to take a profit. Interesting, every time I present one of these scenarios(such as the trade in question) to this friend of mine, he will simply smile, knowingly nod and shrug his shoulders. On the rare occasion he will attempt to explain what happened and who did it, but I am usually in over my head by the third trade, so I just smile and nod. This I can tell you, no one ever cared about the price of gold, the condition of the USD, or much of anything else except how much money was to be counted when the deal was done. He always chuckles when he tells the story about the time the team nearly shut-down Westpac Bank and it took the other Big 4 along with the Reserve Bank to supply the AUD for a trade that Westpac had committed to fund. So based on my observation and experience, I made the assertion that the motivation was profit taking, not necessarily politically motivated.
Hi sp I'll read through your post properly tomorrow, on the face of it you have taken the time to answer my questions properly, so cheers And to Spud, if you were articulate in your belief's instead of the usual fallback rhetoric, this "dust up" may well have been averted. Spud, don't label me or my intent fulla, anyone including you has a right to ask
Good post Silver Pauper. The nuts and bolts of the true market place........profit. Manipulation..well a little of course.... All this business about propping the dollar and suppressing the gold price etc........I doubt it very much. It is all short term trading with very little thought for the future......this is greed.
SP, You have absolutely nailed the point I was attempting to make. Well done. ^^ This is my attitude as well. There is no point griping and pointing fingers. If you don't like the way the market works, then don't play in it. Alfie, Articulate I am not. Usual fall back rhetoric? I didn't think an attempt at objectivity regarding PM price manipulation was very usual here at all. However, all is good. And yes, I agree, everyone has the right to ask.
Been thinking about this a bit more overnight... The trading team that I spoke of in my previous post, was often on both sides of a trade, so selling from one account based in New York and buying through another account in Dubai. The team was spread around the world and had 'offices' in every major country. The margins and profits were counted in pennies, but the huge volume added up to big numbers. So the 400T of Au could have been dumped on the trading floor from an account in Durban to deliberately drive the price down while being bought by several accounts from Hong Kong, New York, London and Tokyo that bought an additional XXXT of Au at the reduced price which after factoring in the cost of selling down the market may have yielded XXT of free Au which was then used to back another trade such as XAU to AUD or S&P500... whatever was the next step in the trade. Remember that these trades are only paper, so nothing physical needs to be moved or shifted, all that is needed is a vast pool of capital to start the cascade. So even though 400T of Au was sold and bought, nothing really changed except a huge paperwork shuffle that netted a massive profit to someone. Also these trades were timed to perfection, time of day, time of week, market sentiment, political climate, inventories and stock levels, volumes and trends, even the weather was considered when determining the trigger. There were times when the conditions for the trade had to be created to a certain extent by moving certain sectors of the market to desired levels beforehand. A very comprehensive piece of software was purpose written by one of the team members to analyse and compile the data needed, when the 'perfect' conditions were met, the storm was unleashed. So when I see a major move like this that cannot be attributed to anything else such interest rates, election, etc, I tend to just figure that someone was having a bit of fun at the expense of everyone else.
Maybe this is worth a look for those that think manipulation is a myth: [youtube]http://www.youtube.com/watch?v=JY-7Sz058P4[/youtube]
Hi SP etall I was trying to understand the motive, the why behind this event. Ended up repeating myself again and again to get to that place (motive) because 'wrcmad's' replies were just describing the what scenarios (I simply didn't ask that). Potty humor, name calling, and the odd giggle aside, from reading yours 'Ronnie666,' 'wrcmads' 'Phibers', 'tolly_67' etall it's Motive which drives this type of event, whether for, as you suggest, fun, or greed, manipulation...... etc etc I would expect there is great motivation to maintain faith in the worlds reserve currency, smashing gold is one way to do it, does that make me a permabull, I don't think so, a conspiracy theorist nup, a realist.. most likely Whilst the "I suspect/ smell a rat/ gut feeling" type vernacular is not good financial speak they all fall into the curious/questioning sort of talk Cheers Alfie
Alfie, Thanks for your reply. As I said before, very few except the sellers will know the exact reason for this trade, and you are right, there was a motivation for the trade. That is the reason all of us buy and sell anything, something motivates us to do so. And you are rightly entitled to your opinion and viewpoint as well. Thanks for the interesting discussion.
Yes I now about this. Technically this is not manipulation as we reference it here were a group of people or organization as a bank or hedge fund rig a contract or corner a market for personal gain. This is classic book fixing or reporting much like the US unemployment or inflation numbers were 'risk' is hidden.
