Gold Manipulation 101

“There are no markets anymore, only interventions.” – Chris Powell, GATA

The Comex bullion banks have a problem going into first notice day tomorrow (delivery notices start going out this evening). Preliminarily, as of yesterday’s Comex close, there were still 33,000+ open June contracts. This represents the potential of 3.3 million ounces of gold standing for delivery vs. 372k ounces of gold reported to be available for delivery.

To be sure, I do not expect anywhere close to 33,000 contracts to be standing for delivery as of the close today’s post-Comex globex session (5 p.m. EST). In fact, I would bet that the open interest reported tomorrow will be under 10,000. But I will point out that I cannot recall this many gold contracts still open the day before 1st notice.

Click image to enlarge

To make sure that the hedge funds either sell or roll forward to August, the banks have a keenly scripted screenplay: Right after the Asian markets close, and perfectly timed with the opening of the fraudulent paper London LBMA market, the San Francisco Fed head, John Williams, gives a speech on “banking supervision” in Singapore. Apparently he made some comments which led the market to believe the Fed would raise rates this year.

The yellow circle above shows the smack given to gold right as the stock market opened. This is a common occurrence. No news events, just a manipulated hit designed to trigger stop-loss position selling by big hedge fund algorithm programs.

Even the boy who cried “wolf” is blushing with embarrassment at the Fed’s threatening to raise rates. Let’s face it, the Fed has been telling us they’re going to raise rates since Bernanke’s infamous “taper” speech in May 2013.

The Fed is not going to raise rates. The market may raise rates for the Fed, but the Fed will not raise rates. They use the threat of raising rates to manipulate market sentiment. And they issue these threats at interestingly “coincidental” times – like when the open interest in the front month Comex gold contract is 10x greater than the declared amount of gold available for delivery.