There is some evidence that things are about to change in the precious metals market. Today's flash crash as seen in the charts below, drove gold down 18 dollars very quickly and silver near 30 cents.
It has been reported that the sell order for gold that drove it down was about 2 billion dollars in notional value. This was a planned action by some very large entity. The reported explanation was that it was some sort of poor suckers mistake, a momentary lapse of reason, nothing to see here so please move on. I have seen some lame excuses for the actions of central banks and traders, but this one below holds as much water as a cup with a hole in it.
“No-one has a clue, apart from the unfortunate individual that pressed the wrong button,” David Govett, head of precious metals trading at Marex Spectron Group in London, said of the spike in volume.
I have traded futures, it is impossible to sell that much paper gold easily. For starters, extremely deep pockets and connected at the highest levels would be needed, even then there are some hoops to jump through. While on the subject of paper gold for those that do not understand, no real gold actually changes hands in these transactions. They are simply IOU's created out of thin air. This is what makes them so immoral and no other commodity markets work like this where no product ever gets delivered, over and over again. It is a rinse and repeat wash cycle, washing hapless gold investors money right out of their pockets.
I would have thought the world would have run out of people with SUCKER written on there foreheads by now. Buying paper gold is a fools folly. Even if the hapless paper longs win one day, they will lose when their gains are paid in paper with some bogus valuation since the paper contracts all have this out written into them. They will get paper money, no gold, and get to watch gold rocket higher and higher with no ticket on the train. If you want gold or silver, then buy gold or silver, not paper.
Now to the good part, the all on board the train call. These attacks have always been strategically planned. I have seen an attack such as we had today change the markets for months going forward. Today, I saw something a bit different happen. The mining stocks usually get creamed with such a move in the underlying. Today, many such as Kirkland Lake and Americas Silver shrugged this off and actually went higher! You can read a little more on those two in this article.
https://seekingalpha.com/article/4081913-summaries-several-mining-stocks-investors
That action, where the better miners only went down slightly or some even went up in the face of such an onslaught is very telling to me. In a really good bull market in gold and silver, the miners usually lead the way up. They usually are not so oblivious to such an attack though and when you couple this with the seasonal weakness of summer, it was really quite a show of potential strength in the metals. I have been calling for a rare summer rally or at worst, an early fall rally to happen. The action today only strengthens that hunch I have. The next couple of weeks will be very interesting to watch to see if the train finally pulls out of the station. If it does, I have a feeling this will be a bullet train.
I would bet the people that shorted this massive amount of gold today are not sleeping very well tonight.
One final bullish note for the metals. The cryptocurrencies, which I am also bullish on for the record, are in a bit of a rough patch. I am one of those rare birds that like both the metals and cryptos, but this action in the cryptos may chase a little of the hot money that has been made there over to the metals, which may also add some fuel to the gold/silver fire.
MOTOWNGOLD!
