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London Trader - Bullion Banks Had To Halt Gold’s Advance
Today the “London Trader” discussed recent comments on KWN about the possibility of a commercial signal failure, which would have created a major price spike in gold. The source asked, “Why do you think the bullion banks threw everything they had at the gold market at the $1,800 level?” The answer, “We were within a hair of a major price explosion, and disorder in the gold market.”
King World News has now released a total of three written interviews with the London Trader. This is the second in a series of blockbuster interviews which uncovers what is happening behind the scenes in the gold and silver markets. Due to recent market action, all three interviews were made available as quickly as possible.
Here is what the source had to say in the second portion of the interview: “As gold was heading up to the $1,800 level recently, we were very close to a situation where we were going to see a commercial capitulation. Some of the weaker commercials were already starting to bail out of their shorts.”
© 2012 by King World News®. All Rights Reserved. This material may not be published, broadcast,
rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
October 16, 2012
The London Trader continues:
“You have to understand that some of these bullion banks are more than happy to turn on these less powerful commercial shorts. They view them as weaker hands. Yes they are all commercials, but some of them are a lot weaker than the bullion banks.
But there does come a point where the bullion banks say, ‘We’ve got to protect those stops.’ We had already gotten to the point where some stops were being tripped from those weaker commercial shorts....
Continue reading the London Trader interview below...
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“It got to the point where the vast majority of stops were located near the $1,810 level. If gold would have pierced $1,810, that would have tripped the vast majority of all of those weaker, underwater commercial short positions out of the market. This would have created enough of a short squeeze that we would have seen new highs in gold very rapidly.
This would have been a literal failure by these commercials (commercial signal failure). The gold market got to within $10 of their stops. Why do you think the bullion banks threw everything they had at the gold market at the $1,800 level? We were within a hair of a major price explosion, and disorder in the gold market.
They (bullion banks) wanted to protect those stops, even though they weren’t their own stops. They needed to do this in order to stop those weaker commercials from capitulating. Now everyone is getting bearish, and when the physical market is closed, we are seeing some shenanigans such as after hours price drops in access market.
So we are seeing more weak hands entering the short side of the gold market, and the commercials have been covering not only into the small speculators liquidating, but also into these fresh shorts. The commercials are doing this in a very, very calculated way.
What readers need to take away from this, is we were dangerously close to a commercial signal failure and a major price spike in gold. Even though the commercials have alleviated that concern for the time being, the possibility still exists that we could see a major price spike when the $1,810 area is pierced on the upside in gold.”
***Important - This was Part II of the London Trader interviews. To read the other two portions of this blockbuster interview series click on Part I and Part III.
© 2012 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
The interviews with Jean-Marie Eveillard, Bill Fleckenstein, Art Cashin (UBS $612 billion), Jeffrey Saut (R.J. $360 billion), John Embry and Gerald Celente are available now. Also, be sure to listen to other recent KWN interviews which included, Rick Santelli, Michael Pento, Don Coxe, Pierre Lassonde, and Rick Rule by CLICKING HERE.
Eric King
