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XMFSinchiruna (28.57)

Currency Intervention and the Leap Year Gold Massacre

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March 23, 2012 – Comments (21) | RELATED TICKERS: CEF

This is a follow-up to my blog post from February 29. This time, it was just too blatant to hide. Once dismissed as a crackpot theory, the existence of coordinated gold and silver price suppression by western central banks has become the shared conclusion of most serious observers of these markets. 

http://www.fool.com/investing/general/2012/03/23/currency-intervention-and-the-leap-year-gold-mass.aspx

Jean-Marie Eveillard, who manages some $60 billion in assets at First Eagle Funds, had this to say in an interview with King World News: "Usually I don't have much to say for bullion regarding day to day trading. But a move of $75 is somewhat striking. Central banks acknowledge they intervene in foreign exchange markets. They (central banks) sort of don't exactly deny, but they are very quiet about the fact that obviously they also intervene in the gold market."

21 Comments – Post Your Own

#1) On March 23, 2012 at 4:45 PM, XMFSinchiruna (28.57) wrote:

This one, too, is not to be overlooked:

 http://gata.org/node/11058

From Dennis Gartman's Gartman Letter: 

 

Moving on to the gold market, we remain bullish of gold in yen terms, and having made that statement yet again, we note something wholly out of the ordinary on our part: the prospects that something manipulative and perhaps even nefarious took place Wednesday in the gold market.

The market's plunge may not have been solely the result of pure market forces, but may have been the result of a very real effort to "manipulate" the market lower ... perhaps on orders of a central bank hoping to break the market in order to buy gold more cheaply after the surge of selling, or perhaps on the order of a government wishing to drive gold down for the "optics" of weaker gold prices.

However, a note we received yesterday from a very longstanding friend and client of The Gartman Letter caught us off when it raised the very real possibility that something untoward took place Wednesday morning. Our friend, whom we've known for years and is not given to such speculation but who is at the center of such events, wrote:

"Dear Dennis, hope you are well. Regarding yesterday's action in the precious metals, I have a different take on this than you do. As I have very intimate details of yesterday, I think it was indeed official selling. At the London fixing, an order came in to sell 3 million ounces of gold and it was explicitly ordered to be done in just a few minutes. No investor or speculator would 1) handle it this way and 2) do it at the fixing only.

"This [has] happened this way three times in the last year, yesterday being the fourth time. Ben Bernanke had done nothing yesterday to trigger this the way it happened. I [have done] this now for 30 years and this was no free market yesterday. We will find out one day."

We offer this explanation as it stands, but certainly it has our interest piqued. It may be idle speculation on our friend's part. It may even be wrong. But certainly it is interesting and worthy of some consideration. We shall leave it at that and we wish not to comment any further ... to the press, to clients, or to anyone else; nor shall we.

* * *


 

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#2) On March 24, 2012 at 9:22 AM, dragonLZ (99.49) wrote:

"..the existence of coordinated gold and silver price suppression by western central banks has become the shared conclusion of most serious observers of these markets." 

Most serious observers being gold and silver bugs.

When gold and silver go up in price, the free market is working just fine for them, when they go down, it's called "currency intervention".

p.s.

For some reason, for those same folks, when the stock market goes up, it's called "FED intervention", and when it goes down, the free market works.

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#3) On March 24, 2012 at 10:34 AM, rofgile (98.98) wrote:

TMFsinchinuria:

 Just read the Financial Times article on gold sales in physical markets.  People just aren't interested in buying gold coins as much, especially in places like asia where they fueled a lot of the price boom.   

 ---

Edel Tully, precious metals strategist at UBS, this week lowered her forecast for gold prices, predicting that the metal would trade as low as $1,550 in the next month. “Investors are not using this [price correction] as an opportunity to buy cheaper gold,” she said. “Instead, more are looking at the potential to short it. 

---

 I think it is interesting how PE multiples on stocks are going up this year since the start.  It seems like investor sentiment is growing, and more mainstream investors are getting back into the markets finally.  Less interest in gold and more in stocks are two related trends..

 -Rof 

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#4) On March 24, 2012 at 10:37 AM, XMFSinchiruna (28.57) wrote:

DragonLZ, If you can show a motive that central banks would have to intervene in the other direction, then perhaps your snarky point would hold an ounce of merit. 

And since the topic of intervention in equity markets was not raised, that's a strawman.

I love, by the way, that you just called Dennis Gartman a gold bug. I can think of no label that would infuriate him more.  

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#5) On March 24, 2012 at 11:12 AM, XMFSinchiruna (28.57) wrote:

Rofgile,

Nothing in your reply, even if the content were representative of the true demand dynamics in gold (which it is not), is directly related to the discussion at hand.

I can't review your link without a subscription to FT, which I would have no interest in given their notoriously wrong-minded coverage of gold, but I can tell you it is utterly incorrect to suggest that "people just aren't interested in buying gold coins as much, especially in places like Asia...".

Edel Tully, very clearly, is examining very near-term dynamics. Citigroup is still calling for $2,400 in 2012, though I place about as much stock in analyst price targets as I place in the shares of their respective institutions.

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#6) On March 24, 2012 at 11:20 AM, dragonLZ (99.49) wrote:

I did not call Dennis Gartman a gold bug (I didn't eve read what he had to say), but the author of this post and other goldbugs in the TMF community.

Your post did not raise a topic of intervention in equity markets, but I made a comment (thus in p.s.) that people who thing gold is manipulated on the downside also think equity markets are manupilated on the upside. 

I have no idea (especially no proof) if central banks do or not intervene in the PM markets. I just find it funny that when goldbugs are making money, all is fine with the world. As soon as things start going in the other direction, somebody is working against them.

P.S. Have you ever wondered why people who shorted the equity markets in 2009 (or advised other people to stay on the sidelines) are mad at the FED at central banks? I guess nobody likes to be wrong (without finding a good excuse).

P.S. Not every comment that is not "Great job, Sincy. I agree 100%" is a strawman. I saw you use "strawman" at least a 30 times now, always responding to people who don't agree with you 100%. Relax a little bit.

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#7) On March 24, 2012 at 1:36 PM, XMFSinchiruna (28.57) wrote:

DragonLZ, That's inaccurate. What you did above was take my phrase "most serious observers of these markets" and replace it with a derogatory use of term gold and silver bugs without, by your own admission, even bothering to read or consider just who is among those declaring an official-sector hand in the February 29 selloff. And so, in that way, you did indeed call Dennis Gartman and everyone else who has spoken out about the selloff in a similar way goldbugs.

You repeat your assertion that people perceiving manipulation in gold also perceive manipulation of equities, which is a sloppy attempt to generalize the diverse views of a wide swath of the investing public.

I'm glad you get a kick out of your misperception that goldbugs are content with the state affairs when metal prices are rising, when I have gone out of my way to declare that I would rather see all of my investments go to zero than be forced to watch as my country follows an irresponsible and unsustainable path into severe currency distress. Since most of the central bank's actions are in fact bullish for gold, my own contempt for prevailing monetary policy clearly applies in both a rising and a falling price environment for gold.

P.S. if you really think this entire notion of the role of gold and silver in currency intervention is born out of some childish grudge over unrealized expectations for equities, then you truly have an unrealistic set of assumptions about the people with whom you are engaged in this debate. By the way, I have no problem being wrong. I routinely admit my errors. I happen not to have agreed with the method by which you sought to call me out on my equity calls a couple of years back by oversimplifying my views and attempting to state them for me in a way that was not an accurate reflection thereof.

P.S.S. I am not in this for pats on the back. I'm in this to help people understand gold and silver. This goes for you, too! I call a strawman a strawman when responses stray drastically from the topic at hand. I'll relax the moment serious topics like the one discussed above to not predictably draw kneejerk responses that use labels, careless generalizations, and presumptuous ascriptions of other peoples' views rather than debating the merits of the topic.

In truth, though, I am quite relaxed. And you are among my favorites here, to be perfectly honest. Just because I may challenge certain statements vociferously, does not mean it's personal in any way.

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#8) On March 24, 2012 at 11:42 PM, dragonLZ (99.49) wrote:

I have no idea why I would be "one of your favorites here", based on our not-so-nice discussions in the past, but I'm glad you steered this one into a civil one.

(Believe it or not, I also thought: "No matter what your reply is, I'm going to answer in a nice way".)

Now onto some explanations: I call goldbugs people I think are so much in love with gold they are too blind to see the other side. That's most likely not a correct interpretation of the meaning of the word "goldbugs", but that's how I look at it.

(I admit I never tried to learn a real definition of the word goldbug, but it's very strange everybody says he/she is not one. I hope it doesn't mean anything bad).

Basically, I got an impression that you and some other folks here on CAPS are goldbugs and can't see other side's point of view.

Again, I don't mean anything offensive by that. I, for example, think I'm very close to being an equity ultrabull and wouldn't be offended if people called me that.

Based on what my definition of what a goldbug is, I think your post was just another one of "conspiracy theories" when things are not going goldbugs' way. I've seen many.

Whether there is any merit to these "conspiracy theories", I really don't know. I just wanted to express my opinion on how they start.

Maybe I didn't express it in the nicest way possible, but I still don't think it's far from the truth. I honestly do not recall ever seeing somebody who's green-thumbing in CAPS anything and everything gold and silver related (another of my definitions of a goldbug) complaining that somebody is manipulating gold's price to the upside (and I can come up with at least two pro-gold conspiracy theories right this second).

Also, I don't think I was wrong saying "goldbugs" always complain about the FED when the stock market goes up. Take a look at people who green-thumb everything PM related, and you will also see that 98% of them also red-thumb all bullish ETF's. Then when they lose money/points on red-thumbed bullish ETFs, they post stuff like "this market is manipulated".

That's all. I didn't really had anything constructive to say, just wanted to express my opinion that PM-lovers might be bad losers.

p.s.

I'm honestly glad you are relaxed. I also was very relaxed prior to making my comments, and wasn't very happy with myself for engaging into "snarky comments" (not so much for my first comment, but for adding at the end of the second one: Relax a little bit.There was no reason for that. I'm guessing "I wasn't able to get over our past".)

Good Luck!

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#9) On March 25, 2012 at 8:30 AM, XMFSinchiruna (28.57) wrote:

DragonLZ, 

That was the nicest way I've ever seen someone question the intellectual integrity of the information I've presented. :) 

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#10) On March 25, 2012 at 9:15 AM, ETFsRule (99.89) wrote:

"Once dismissed as a crackpot theory, the existence of coordinated gold and silver price suppression by western central banks has become the shared conclusion of most serious observers of these markets. "

You haven't submitted anything to support this statement.

Your article includes quotes from 3 people. That hardly constitutes "the shared conclusion of most serious observers".

Based on their comments, they seem to suggest that manipulation had occured, but they haven't specified if the price was manipulated higher or lower. None of these people used the term "price suppression", so your article is quite misleading, with regards to what these people have actually said.

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#11) On March 25, 2012 at 10:02 AM, XMFSinchiruna (28.57) wrote:

ETFsrule,

Your comment is nonsensical. All serious observers referenced understand that central banks have a unidirectional interest with respect to manipulation of old and silver.

Incidentally, that's also why Dragon's complaint that gold observers only focus on manipulation when prices fall is illogical. 

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#12) On March 25, 2012 at 10:08 AM, ETFsRule (99.89) wrote:

"All serious observers referenced understand that central banks have a unidirectional interest with respect to manipulation of old and silver. "

Can you support this idea with some quotes from those observers?

Also: your comment is nonsensical, considering the fact that central banks are some of the largest holders of PM's in the world, and they remain net buyers of gold and silver.

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#13) On March 25, 2012 at 10:16 AM, ETFsRule (99.89) wrote:

Gold, anyway. Not sure if they are net buyers of silver.

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#14) On March 25, 2012 at 11:07 AM, XMFSinchiruna (28.57) wrote:

ETFs, your lack of knowledge of the topic is as glaring today as it was years ago when you began commenting. 

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#15) On March 25, 2012 at 1:21 PM, ETFsRule (99.89) wrote:

.

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#16) On March 25, 2012 at 1:23 PM, ETFsRule (99.89) wrote:

"ETFs, your lack of knowledge of the topic is as glaring today as it was years ago when you began commenting. "

It's pretty sad that you can't address the topic at hand, and instead resort to ad hominem attacks.

I asked you to support your theory with facts, rather than make assumptions about what other people believe. That's not an unreasonable request.

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#17) On March 26, 2012 at 7:41 AM, johnybottom (< 20) wrote:

News on azx? Gotta be soon...

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#18) On March 26, 2012 at 10:35 AM, reinman60 (< 20) wrote:

Chris,

Would love to know you take on FSM earnings. Seems like things are progressing well, but the market obviously disappointed, with the stock off 6.5%.

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#19) On March 26, 2012 at 11:28 AM, ubernut (24.02) wrote:

reinman60

Yeah I am puzzled buy Fortuna's price drop as well.  I've been looking for any news other then the year end results to explain it.

Johnybottom

I feel like I am checking azx website every hour lol but they never said they were anouncing in March just in the coming weeks so who knows when that is.

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#20) On March 26, 2012 at 1:06 PM, johnybottom (< 20) wrote:

For all interested parties, just received email from Mary Vorvis at AZX.

"We expect to release the resulted by Tuesday March 27, 2012."

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#21) On March 26, 2012 at 1:12 PM, johnybottom (< 20) wrote:

Maybe I should clarify - that's for the resource estimate results at Akasaba...

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