On the heels of another plunge in the gold and silver markets, London metals trader and whistleblower Andrew Maguire told King World News this gold takedown is about to backfire violently on Western Central Banks.
Andrew Maguire: “Looking at the physical flows and the aggressive commercial short covering into leveraged specs in the Comex casino, the gold and silver prices will rise quickly once China returns on Sunday night/Monday morning. Monday is also a U.S. holiday so we could expect some fireworks…
Continue reading the Andrew Maguire interview below…
With China, the single largest global gold buyer absent, it was clearly not the time for a legitimate seller to obtain the best price to sell gold in size. It is patently clear that this was a directional, officially orchestrated selloff, instigated with no legitimate sell trigger of any sort, and designed to catch the market off guard.
The Flushing Of 1,000 Tonnes Of Paper Gold
The sole objective in flushing over 1,000 tonnes of paper gold was to cover billions of dollars of underwater naked short positions locked out after Brexit at $1,275. I see any move sub this level as short covering fodder for the bullion banks, who act on behalf of the Western central bank officials, and now we revert once more to compressing the rebound spring.
We are viewing this officially sanctioned synthetic discount as a huge, not to be missed opportunity, just as we did last December, $200 lower than today. Margined traders, who I suggested to protect themselves with stops at the round #’s this week, will be in a very good position to utilize dry powder & reload, likely right after Non Farm Payrolls. A pathetic .25% rate rise is now fully baked into gold and silver, but clearly not into the nose bleed Fed propped risk-on stock market.
Huge Physical Outflows As Paper Price Is Now Just An Illusion
Milking more hot money gold and silver capitulations will become much more difficult given the need for the bullion banks to hedge physical outflows. The low spec hanging stops have already been rinsed with todays $1,257.40, 200-day moving average, the last easy short cover fuel. The paper price is an illusion where only the naked long non delivery synthetic players are vulnerable. But this sets the physical price and will come to haunt officials next week because once again we have a bifurcation between paper and physical gold.
Pressure On Gold By Design Because Of Cracks In The System
The gold price decline would indicate all is well in la la land, and global concerns can be swept aside while taking the focus off the Deutsche Bank ‘Lehman’ moment and the scramble by German and UK gold buyers to buy physical. This is the standard form of defensive attack that we see when serious cracks appear in the unallocated gold market delivery system. We saw it in April 2013 with ABN AMRO and we are seeing it again on a much larger scale now with Deutsche Bank.
Very little needs to be added to the reasoning behind the recent Lord Rothschild (buy gold) statement:
“The six months under review have seen central bankers continuing what is surely the greatest experiment in monetary policy in the history of the world. We are therefore in uncharted waters and it is impossible to predict the unintended consequences of very low interest rates, with some 30% of global government debt at negative yields, combined with quantitative easing on a massive scale.”
Gold Takedown Charade To Backfire Violently On Central Banks
This reasoning reflects the wholesale market view as well, and underscores the 100% synthetic nature of the current defensive, officially driven selloff which is making a mockery of true supply and demand fundamentals, which, regardless of tomorrow’s Non Farm Payrolls, will be re-established very quickly next week as an enormous physical backwash into the paper gold market that either forces a cash gold reset or forces very large commercial buying to hedge naked short positions. Either way this will backfire with many on the sidelines.
Just like last December, we will look back on this pathetic attempt to dislodge gold buyers while these same bad actors are buying everything in sight. Eric, people need to buy physical gold into these heavily discounted prices because they won’t last and the snapback in price will be quite violent on the upside once this charade comes to an end.”
***KWN has now released the extraordinary interview with legend Pierre Lassonde CLICK HERE OR ON THE IMAGE BELOW.
***Also just released: James Turk – Deutsche Bank Failure To Usher In The Next Great Depression CLICK HERE.