Gold Manipulation

[AxelP]

This two hour chart of Gold shows an unfathomable movement which took place last night (Wednesday morning 13/8). Gold was breaking new highs at $1535 when suddenly a seller, or a number of sellers arrived to sell there holdings. This they did with vigour resulting in a drop of $56 to $1479. Clearly not a small retracement that you might expect to take place with a strongly trending commodity. No this was a big move that clearly removed everyone who had a position and a stop loss in place. No-one has a stop more than $56 from the current price. Neither is this standard profit taking that one might expect: are we to believe that the profit takers were so in earnest that they continued taking profit right down to a level $56 below the price. I don't believe so.

This looks to me much more like a manipulation of the commodity by a large player, who probably shorted Gold and then started selling short stock that they didn't have and continued to do so to take out any position with a reasonable stop in place. Many people probably had their position sold by the Brokers.

So if anyone has any suggestions as to why a whole heap of investors suddenly start selling their holdings, which are providing a better return than the S&P YTD, I would like your views. The only comment made is the one that Tramp has pushed out the 10% tariffs from Sept 1 to Dec 15. This "providing relief to the Stock Market". This is unconnected to Gold in any way, and are we to believe that these sellers were selling to invest in the Stock Market: I don't think so as many buyers in Gold are there specifically as a flight to safety. Our broker, IG Markets has an obligation to revue this activity as it is not normal, and bring it to the attention of the DOJ. I believe that the exchange for Gold is the NYME (New York Mercantile Exchange). Now it is very much in their interests to 'remove' profitable trades on their platform. 

[Caseynotes]

19 minutes ago, AxelP said:

This "providing relief to the Stock Market". This is unconnected to Gold in any way, and are we to believe that these sellers were selling to invest in the Stock Market: I don't think so as many buyers in Gold are there specifically as a flight to safety

Yesterday's move in gold is clearly correlated to the move in stocks.

[dmedin]

44 minutes ago, AxelP said:

So if anyone has any suggestions as to why a whole heap of investors suddenly start selling their holdings, which are providing a better return than the S&P YTD, I would like your views

You called it - it was a shakedown by the big sharks to take out all the 'little fishes'.  Why invest when you can manipulate?

[Caseynotes]

5 minutes ago, dmedin said:

You called it - it was a shakedown by the big sharks to take out all the 'little fishes'.  Why invest when you can manipulate?

The fly in the ointment of your hackneyed view is that the sharks actually feed off each other, retail traders are not even a snack and only get eaten when they get in the way.

[dmedin]

2 minutes ago, Caseynotes said:

The fly in the ointment of your hackneyed view is that the sharks actually feed off each other, retail traders are not even a snack and only get eaten when they get in the way.

 

Retail investors are the bottom feeders who feed off the dregs... 😆

[Mercury]

@AxelP, 2 thoughts to offer:

1. First I believe, from the tenor of your post, that you had Longs that were stopped out (either for a loss or you are feeling the loss of all that lovely upside potential).  I am guessing you bought into the idea that Gold was going up, up, up.  But markets don't move in straight lines.  I do think the long term trend is up but these markets are overdue a retrace bearish move, a zag to the zig if you will.  See my Gold/Silver thread for more details on this idea if interested, I will not attempts to repeat it here.  So basically that is a reason for the current move, which I believe is the beginning of a period of retrace bearish price action until the next zig kicks off and it is this one that will be the one that runs and runs, timing is all.  This may or may not be related to what is going on in stocks but more likely there are underlying drivers effecting sentiment and Gold was already hot so traders are minded to worry about such reversals and act accordingly.  Up/down, down/up, this is how the markets operate.  When something goes against us and apparently against logic (even though the logic may be fuzzy) we tend to seek nefarious reasons, which by and large do not exist.  When too many are heading in one direction the market is too lob-sided and we get a zag.  Nothing nefarious about it, been going on since the dawn of time in every market, not just financial ones.
2. Second, even if someone or someones are trying to drop the market so they can buy back in, which would be your thesis I guess, they are doing this by selling their holdings.  There is nothing illegal about that.  Collusion is illegal but the reported cases of this are few and far between, it is not the mainstream and should not be fixated upon, it is unhealthy for your trading psychology.  The key point here is you have to trade the market, the price action, and not worry too much about the whys and wherefores.  There were signals enough of an potential reversal, which I posted on and also some serious professionals opined on.  If you were taken out at break even no problem reassess and carry on.  If you got hit for a loss, why were you not at break even stops?  These are rhetorical questions for you to ask yourself and learn from it.

My suggestion to you is to reassess your views on where Gold is going next and long term and set up a trading plan accordingly.  If you lost some money on the current move, learn from that and move on, do not fixate on it and above all don't try for a revenge trade.  This is all about psychology for you now.

 

 

[Caseynotes]

2 minutes ago, dmedin said:

 

Retail investors are the bottom feeders who feed off the dregs... 😆

no, instead think Remora, attached to the shark so follows closely and is lead to food.

[phillo]

seems like normal price behaviour to me

[AxelP]

13 hours ago, Caseynotes said:

Yesterday's move in gold is clearly correlated to the move in stocks.

So where is the correlation to yesterdays 800 pt drop? The biggest drop this year and the only thing that is clear is that buyers are returning to buy gold. It moved from $1500 to $1523. There is not correlation between stocks and gold: stocks provide returns based on the economy and gold is a commodity that is no more than a store of wealth and speculative.

[AxelP]

13 hours ago, Mercury said:

@AxelP, 2 thoughts to offer:

1. First I believe, from the tenor of your post, that you had Longs that were stopped out (either for a loss or you are feeling the loss of all that lovely upside potential).  I am guessing you bought into the idea that Gold was going up, up, up.  But markets don't move in straight lines.  I do think the long term trend is up but these markets are overdue a retrace bearish move, a zag to the zig if you will.  See my Gold/Silver thread for more details on this idea if interested, I will not attempts to repeat it here.  So basically that is a reason for the current move, which I believe is the beginning of a period of retrace bearish price action until the next zig kicks off and it is this one that will be the one that runs and runs, timing is all.  This may or may not be related to what is going on in stocks but more likely there are underlying drivers effecting sentiment and Gold was already hot so traders are minded to worry about such reversals and act accordingly.  Up/down, down/up, this is how the markets operate.  When something goes against us and apparently against logic (even though the logic may be fuzzy) we tend to seek nefarious reasons, which by and large do not exist.  When too many are heading in one direction the market is too lob-sided and we get a zag.  Nothing nefarious about it, been going on since the dawn of time in every market, not just financial ones.
2. Second, even if someone or someones are trying to drop the market so they can buy back in, which would be your thesis I guess, they are doing this by selling their holdings.  There is nothing illegal about that.  Collusion is illegal but the reported cases of this are few and far between, it is not the mainstream and should not be fixated upon, it is unhealthy for your trading psychology.  The key point here is you have to trade the market, the price action, and not worry too much about the whys and wherefores.  There were signals enough of an potential reversal, which I posted on and also some serious professionals opined on.  If you were taken out at break even no problem reassess and carry on.  If you got hit for a loss, why were you not at break even stops?  These are rhetorical questions for you to ask yourself and learn from it.

My suggestion to you is to reassess your views on where Gold is going next and long term and set up a trading plan accordingly.  If you lost some money on the current move, learn from that and move on, do not fixate on it and above all don't try for a revenge trade.  This is all about psychology for you now.

Thank you for your response. I am familiar with the efforts of the Market Markers and so therefore do not use stops very often. Of the five trades that I had on Gold one had a stop but the other four were back in profit as the buyers returned today. No the markets do not move in straight lines but a retracement is definable and often clearly shown by way of Fibonacci retracement levels. This is clearly not a retracement as I have mentioned. The bearish attitude that you suggest is beginning now is not taking place is it. Within 24 hours of this move the price has already reached $1524. Buyers are back. You must be a severe chartist if you are unaware of the fundamentals that are at play in the markets and the planet. Whatever takes place on the chart has an explanation. You cannot just put it down to “underling drivers effecting sentiment”. Who were the players that caused this move? Nothing fuzzy about this logic mate and it might be a good idea to keep your opinions to yourself. Nothing is to be gained by making personal remarks.

You point 2 is naïve. Are you familiar with the reasons for the GFC? Big banks were responsible and have shown they have no scruples or ethics. And if you think that they only sell what they have to sell you are mistaken. When I sell short I do not have to own the stock or commodity. A large player is perfectly able to sell into a market continuously and force the price down. Once again even if one accepts your point that these are genuine sellers have you any idea how many would be needed to drive the price down by $56? What were they doing? Taking profits? Why? Most in this position will sell a portion. I am only guessing but would assume that at least 20% of the investors would have to start selling to achieve this kind of move. With no reason. While stocks are falling, there is even more reason to stay in Gold.

Collusion is illegal but it is rampant and believing that non goes on, is as I say naïve. Refer: https://www.marketwatch.com/story/merrill-lynch-fined-by-doj-cftc-for-spoofing-in-precious-metals-futures-2019-06-25

Clearly, even 24 hours after this move there is no reversal taking place and there will not be one. So I don’t know what signals you refer to but they were clearly wrong (at this point anyway).

 

 

 

[dmedin]

Most of us have missed the boat as far as gold is concerned.  It's too obvious of a buy right now, there's too much interest in it, and the big players have the threat of shaking down new longs to keep anyone sensible from getting in long at this point.

[Caseynotes]

5 hours ago, AxelP said:

So where is the correlation to yesterdays 800 pt drop? The biggest drop this year and the only thing that is clear is that buyers are returning to buy gold. It moved from $1500 to $1523. There is not correlation between stocks and gold: stocks provide returns based on the economy and gold is a commodity that is no more than a store of wealth and speculative.

The correlation is that Gold is risk off while Indices are risk on, money routinely flows backward and forward between the two on change of sentiment. This week has seen big sentiment swings, trade war dragging on, Trump announcing a de-escalation, a period of reflection, and the realisation not much had changed and then new news the 2s and 10s bond yield curve had inverted for the first time since 2007. 

All played out in real time on the charts;

[dmedin]

2 hours ago, Caseynotes said:

2s and 10s bond yield curve had inverted for the first time since 2007

I read an article on this from Reuters yesterday, stating that the S&P 500 historically rallied for a few more months before dropping.  Seems like the best thing is to step aside and find something safer to trade on?

[Caseynotes]

5 minutes ago, dmedin said:

I read an article on this from Reuters yesterday, stating that the S&P 500 historically rallied for a few more months before dropping.  Seems like the best thing is to step aside and find something safer to trade on?

yes, historically it can be many months before indices show any sign of a down turn as a follow on from a yield curve inversion. Also bond markets have changed a lot over recent years with negative interest rates and negative bond yields throughout western Europe and Japan.

[Mercury]

First let me apologise @AxelP, on rereading my post I can see that it may have come across as condescending and targeted on your example, which was not my intention.  I was talking ingeneralisatins and in fac personal experience (i.e. I was talking about myself and not you).  In fact I thought it reminiscent of another poster, which made me shudder, I will have to watch how I phrase things better, or maybe simply not post...

Regarding your comments:

On 15/08/2019 at 01:12, AxelP said:

No the markets do not move in straight lines but a retracement is definable and often clearly shown by way of Fibonacci retracement levels. This is clearly not a retracement as I have mentioned. The bearish attitude that you suggest is beginning now is not taking place is it.

I think you misunderstood my point, perhaps if you had read my Gold thread you would have seen where I was coming from.  The sudden move down was not the retracement, just the beginning salvo, maybe.  The retracement will go down much further and I do use Fibs to assess likely end points but thanks for assuming I don't pointing that out.

On 15/08/2019 at 01:12, AxelP said:

You must be a severe chartist if you are unaware of the fundamentals that are at play in the markets and the planet. Whatever takes place on the chart has an explanation. You cannot just put it down to “underling drivers effecting sentiment”.

Again if you had read my thread you would see that I deploy an overarching fundamentals premise to my technical analysis.  The two have to be in sync for me to take action.  Sentiment reading are used by professional traders.  Sentiment drives the markets.  The explanation you are seeking is what drives sentiment.  I have a view on that, which I shared.  You think it is manipulation and I think it is a natural sentiment shift, albeit temporary.  I thought you wanted other opinions, guess not.

On 15/08/2019 at 01:12, AxelP said:

You point 2 is naïve.

My contention is that manipulation doesn't matter to me so I don't obsess about it.  This has been going on since the dawn of time and not just in financial markets either, ever heard of a cartel?  It is human nature.  As such many technical analytical methods seek to map the natural rhythms of the market driven by human nature on a long period of time.  Manipulation is contained within the historic price action, whether this is through legitimate means or illegal collusion or indeed through government (via central bank) policy.  The only manipulation I fret about is a flash crash but that is where guaranteed stops come in.  If I cannot decipher whether a move is manipulation, and anyway what would I do differently, then I just ignore it and spend my mental energies elsewhere.

On 15/08/2019 at 01:12, AxelP said:

Once again even if one accepts your point that these are genuine sellers

What is a non genuine seller?  A seller is a seller.

On 15/08/2019 at 01:12, AxelP said:

I am only guessing but would assume that at least 20% of the investors would have to start selling to achieve this kind of move. With no reason.

That is right.   You are guessing.  Why bother is my point.

On 15/08/2019 at 01:12, AxelP said:

While stocks are falling, there is even more reason to stay in Gold.

Write down the time and place you said that...

On 15/08/2019 at 01:12, AxelP said:

Nothing fuzzy about this logic mate and it might be a good idea to keep your opinions to yourself. Nothing is to be gained by making personal remarks.

As I said I apologise if my comments came across so, it was not intended.  I was actually talking about myself regarding fuzzy logic not you.  Ironic that you chose not to follow your own advice though.

My response was originally a response to your post, which asked for opinions.  I see now that I misunderstood.  It was a rhetorical post., you didn't want opinions.

I will take you advice and keep any further opinions to myself.  Thanks for yet another lesson in why posting on the forum is not more active.  I imagine most users do not want to expose themselves to such diatribes.

On 15/08/2019 at 01:12, AxelP said:

I am familiar with the efforts of the Market Markers

As you say you are familiar with what Market Makers do, you have a firm grip on things and will be a very successful trader, or are one already.  Good luck with that.