Sudden price moves

Dirtbikepilot

Dirtbikepilot

Active Member
What causes these sudden price moves? Out of nowhere it goes from falling to straight up. This surely can't be normal market movement.
As can be seen on the charts below it happened identically with gold and silver at the same time. What is the cause?

2376_chart.png


2376_s_chart.png
 
News of the hour

7. December 2011 23:35:21

GERMANY: Govt spox; Confirms, no joint EFSF-ESM firepower
- No deal on IMF increase at EU Summit

also

Rumours that the European Central Bank is looking at loosening its collateral requirements on loans.

ECB said to look at allowing more uncovered bonds as collateral
 
As this chart from Credit Suisse shows, that pool totaled $20 trillion as recently as 2007. It's shriveled to $12 trillion today.

It has the potential to further shrink the pool of assets that conventional wisdom brands as "safe."


44_safeassets.png


The first asset class to lose its "safe" status was the AAA-rated bonds tied to U.S. real estate; the maroon-shaded part of the bar disappeared as 2007 rolled into 2008.
Then came the agency- and mortgage-backed securities linked to Fannie Mae and Freddie Mac. The light-blue part of the bar vaporized.
This year the shine came off European government debt that wasn't French or German.
French debt could well be next and maybe German too. Once they go, all that's left are the two instruments that carry an explicit U.S. government guarantee Treasuries and Ginnie Mae bonds.
 
Dirtbikepilot,

perhaps a change in the value of the aussie dollar showed up as this simultaneous move in the PMs.


.
 
Most silver traded is paper silver, silver contracts, options, derivatives. These instruments have no real silver backing them. Every few months the contracts reach expiration and just prior to the date, those that control the market flood it with paper and push the price down. A comparison of charted price over time and a futures expiration calendar will show this. It's a bit of a casino like all the other markets.

We who buy real silver assume that one day the two markets will diverge and in fact they already have but not to any conclusive separation. For that to happen all the paper would have to be abolished, or restructured so people could not gamble on it. A big silver user like a battery maker or a solar panel manufacturer buys silver contracts to lock in a future price so they can plan ahead. If the silver price plummets before settlement of contract they don't care, they still get their silver at the contract price and take delivery. All the little speculators though just walk away from their contracts because to settle would mean zero profit or a loss. They walk away from their down payment and it's all these forfeited down payments that keep the futures market owners in the game.

This is one of the main reasons for market volatility, and as mentioned above, currency manipulation is another.
 
China continues to buy slowly. I put those type of bumps down to them.
 
Speaking of sudden price moves - silver is dropping off a mini cliff - 30.94 aud now. Go you good thing!
 
Concerning the sudden price moves, I just stumbled upon an article - it's in German, but contains some interesting charts:

gs20111201-201420.gif

Source: http://www.goldseiten.de/content/diverses/artikel.php?storyid=18056&seite=0

gs20111201-201426.gif

Source: http://www.goldseiten.de/content/diverses/artikel.php?storyid=18056&seite=0

These are average intraday charts, which are created by taking the average of intraday charts over a longer period of time. Although they have to be taken with a huge grain of salt (they are normalized to 1000, so even the largest spikes are less than 0.1%) the author points out that the spikes that occur just before the fixings might indicate that someone tries to keep the price low (yeah, I know... this price manipulation story again ;) but the charts look quite interesting anyhow...)

However, something like this does not explain the upward spikes, as they happened again today just before the fixing... :/ ?!
 
Because many commodities are priced in USD, there is a simple inverse relationship between price and the USD Index. Begs the question of what forces are acting on USD? This is over simplified, of course, but might be something to consider if you don't look at USD Index as part of your analysis. For example, today's "smackdown" and the USD Index: (give me a minute to add the charts, It's a ridiculous procedure to add images here)

2684_us_dollar_index.gif
2684_silver_1d_o_usd.png


Can't find USD Index chart for Dec7th straight away....might shed some light on the charts in the OP.
 
I'm with you auspm. More specifically, can you point to what the Morgue did on Dec.7th to cause that jump? What did the Morgue do today to cause the downward pressure? Looking for specific actions here, if any, not generalizations.
 
Right now it's JPM tanking! Hurrah! :D

ps - Oh 5hit! The value of my investment is going south with the smashdown of JPM sp!

Oh... er, HURRAH!!!!!!!! lol!
 
Silber said:
Concerning the sudden price moves, I just stumbled upon an article - it's in German, but contains some interesting charts:

http://www.goldseiten.de/bilder/upload/gs20111201-201420.gif
Source: http://www.goldseiten.de/content/diverses/artikel.php?storyid=18056&seite=0

http://www.goldseiten.de/bilder/upload/gs20111201-201426.gif
Source: http://www.goldseiten.de/content/diverses/artikel.php?storyid=18056&seite=0

These are average intraday charts, which are created by taking the average of intraday charts over a longer period of time. Although they have to be taken with a huge grain of salt (they are normalized to 1000, so even the largest spikes are less than 0.1%) the author points out that the spikes that occur just before the fixings might indicate that someone tries to keep the price low (yeah, I know... this price manipulation story again ;) but the charts look quite interesting anyhow...)

However, something like this does not explain the upward spikes, as they happened again today just before the fixing... :/ ?!
Click to expand...

the fix prices must have been used as some reference of some settlement points either to hide something on the owners books or to cheat the investment public who have orders to fill on the open or close to reference on that basis. :lol:
 
auspm said:
http://forums.silverstackers.com/uploads/2595_middle-finger.jpg

It's JP Morgan's 'fat finger' that does it.
Click to expand...
You miss others
Hsbc
The down movements and sells presure is in the beginning of new york market normal hours (nymex) jpm
And london (hsbc)
Casey research yesterday report:


Silver, as always, was the precious metal that really got it in the neck yesterday. The high in silver was Friday night's close, as silver was under pressure right from the New York open on Sunday night. The interesting thing about the take-down in silver on Sunday night was that it began at 9:00 a.m. Hong Kong time during their Monday morning, whereas the gold take-down occurred at 9:30...a half hour later. Normally these not-for-profit sellers take down both metals at the same time.

From that point, silver fell in fits and starts through all of early London trading...and into the New York session. The bottom, like gold, came around 10:25 a.m...and the nice rally that came after that got crushed. Then another rally began shortly before Comex trading ended at 1:30 p.m. Eastern time...and the silver price struggled back to its New York opening price.

From it's Friday night close, to it's New York low on Monday morning, silver got hit for $1.45...about 4.5%. Silver closed in New York at $31.29 spot...down 94 cents on the day...2.9%. Volume wasn't overly heavy at 37,000 contracts...and the vast majority of that was high-frequency traders doing their thing.
 
You must log in or register to reply here.
Back
Top