Today London metals trader Andrew Maguire spoke with King World News about who smashed the price of gold today and why as HSBC just shocked clients by announcing the closure of all gold vaults in London! Maguire also discussed what is happening in the physical gold market as well as what the bullion banks are up to.
Today's Gold Smash Is Western Government Intervention
Andrew Maguire: “Eric, here we are again after another heavily gamed Non-Farm Payrolls (NFP) report week that evidences just how ‘managed’ the paper markets are. Given the strong Indian and Chinese demand above $1,200 and the currency crosses related to gold that were net-positive all week, there was no reason to paint gold down ahead of today's NFP. Given that the physical market is strong, the Comex-centric selling has all the hallmarks of ‘official’ selling.
Massive Physical Demand
What I am saying is that there was massive physical buying above $1,200. So there was no reason for today's takedown other than to flush the paper markets of some weak-handed longs, and for the commercials to cover shorts and add to their long positions.
Bank Of England And Fed Fingerprints
Real Comex open interest has declined by some 250,000 contracts in the last 4 years, leaving what remains in the hands of a few directional high-frequency trading algorithms controlled by a few CME insiders, who also happen to be the same 6 market-making bullion banks that have gold accounts with the Bank of England. Considering the FED had the NFP data days ahead of the release, it is highly unlikely these agent banks were not privy to the data as well.
What this synthetic gaming has done is drive out almost all ‘real’ open interest into an increasingly liquid physical market outside the tendrils of a handful of collusive banks. This migration has now reached an inflection point and reverse leverage is about to run these banks over.
Physical Demand Exceeds Mine Supply – Takedown Is Naked Short Selling
The downside manipulations have become so embarrassingly obvious to anyone connected to the strong physical markets. There is no way of hiding that these sales are conducted in the face of a market where physical demand continues to exceed mine supply, meaning these sales can only be effected by way of high leveraged naked short selling.
Bullion Banks' 100/1 Leveraged Paper Positions
These too-big-to-fail banks are once again playing a high-risk game with taxpayer money. They are so obviously mismatched to their underlying physical holdings that large institutional entities are unwinding their fractional gold and silver risks. The resulting deleveraging exposes the bullion banks' rehypothecated positions. As this accelerates it is forcing a 100/1 unwind of paper positions.
Eric, last week we talked about a membership-based physical exchange that has stealthily been built over the last 3.5 years and is now bullet-proof from LBMA interference. In our interview last week we talked about how this physical trading platform provides a real alternative to the closed-loop LBMA system.
It all boils down to the fact that providing direct access to the wholesale market, without going through a bullion bank, empowers the end user. Up until now, the end user hasn’t been able to directly access the wholesale market.
LBMA Killer
The next exciting step is the announcement of a full-fledged institutional global exchange to compete with the existing archaic LBMA/London Precious Metals Clearing Limited unallocated market. All the institutional trading, clearing, settlement and technological facilities to do so have effectively now been built. There has been a slight delay with the launch but I will have a hard date for you as well as the name of the exchange by next week.
Within a few weeks this will change the way gold is traded as we witness large migrations of unallocated LBMA position holders unwind from high counterparty risk unallocated positions and then allocate into secure vaulted kilobar accounts outside of the LBMA bullion banking system.
In other words, real allocated bullion will have to take the place of fractional reserve holdings. This leverage unwind will wrench the reins out of the bullion banks' hands and force a cash settlement. We also have a treat for the bullion banks. As this deleveraging forces the buying of bullion, the soon to be announced exchange will introduce a new ‘pairs trade,’ short paper gold, long physical gold XAU/AAU. This will represent a low-risk trade and a nail in the coffin for the LBMA.
Eric just think, only one more NFP gaming to endure before things start to change! I will have more to share with you next week about this exciting game-changing news.
HSBC Just Shocked Clients By Announcing Closure Of All London Gold Vaults!
The other big news this week was HSBC giving only 2 months’ notice to clients that they are closing down all 7 of their London gold vaults! This is an unprecedented move. Why do you think this is? It is because transparency is coming. There is no profit in plain, vanilla bullion banking any longer.
I also suspect given the lack of warning and lack of any press release that the majority of these clients will be unable to make other vaulting arrangements in time. HSBC will no doubt make it easy for these clients to sell the bullion back to HSBC, who will then use this bullion inflow to repay some underwater positions. So something is brewing behind the scenes, Eric, and this is one more sign major changes are coming.” ***Andrew Maguire's trading service has left Coghlan Capital and they are no longer affiliated in any way. To sign-up for Maguire's incredible gold and silver trading service CLICK HERE or email King World News for more information.
***ALSO JUST RELEASED: Celente – Why The Closing Of London Gold Vaults Will Shake The World CLICK HERE.
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