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The Round Rock Wealthbuilder's Meetup Message Board › Blood In The Streets - Buying Opportunity??

Blood In The Streets - Buying Opportunity??

Dan Caldwell - Wea...
user 3188546
Round Rock, TX
Post #: 217
April 16, 2013

Compiled from multiple sources

 This decline in gold and silver prices is largely due to technical selling in THE GOLD (and SILVER) ETF FUTURES MARKETS WITH NO PHYSICAL GOLD TRADING HANDS . . .  The action in this market has been the product of two firms acting as gold banks selling paper in amounts that exceed any imaginable long position, selling the equivalent of 155 metric tons in one hour. 

Selling of paper Comex contracts on Friday, April 12th, and Monday, April 15th, totaled one million contracts, exceeding global annual gold production by 15%.  The volume is without precedent and has all the characteristics of a panic liquidation driven by naked short selling....The means of the sales have been vicious and clearly intended to depress the price in the paper market, and in that the sellers were successful.

The order was believed to have been placed through Merrill Lynch's brokerage team. Gold futures with a value of over 400 tonnes were sold in hours and this is equal to 15% of annual gold mine production. The scale of the selling was massive and again underlines how one or two large banks or hedge funds can completely distort the market by aggressive, concentrated leveraged short positions. 
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(Kitco News) - Gold and silver prices are under more strong selling pressure Monday morning as fear among gold and silver traders has led to panic selling and a crash in prices. Gold has lost more than $150.00 an ounce and silver has shed more than $4.00 an ounce since last Thursday’s closing levels in New York. Gold is now at its lowest price level in more than two years.

There has been no single fundamental catalyst for the panic selling in the gold and silver markets. But the fear in the commodity trading world is pervasive Monday morning, which has most commodity futures markets and world stock markets under selling pressure. Nymex crude oil has tumbled more than $4.00 a barrel in two days. “When in doubt, get out” is the mantra of raw commodity market bulls Monday.

A money game in markets occurs when there are huge money flows in one direction—in this case out of long gold and silver positions— and that begets even more selling as the pain of being so far “under water” becomes too great and traders have to liquidate their positions. Margin calls occur in the futures markets and traders are forced to abandon their already weak long positions. And then there is blood in the street, such as is the case now. 

THE LIGHT AT THE END OF THE TUNNEL FOR GOLD & SILVER MARKET BULLS, AS FAR AWAY AS IT MAY SEEM, IS THAT, " BLOOD IN THE STREET" IS USUALLY A VALUE - BUYING OPPORTUNITY THAT OCCURS ONLY A FEW TIMES IN A DECADE, IF THAT MUCH.
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