I have never witnessed a market so blatantly manipulated as gold on the Comex

jsmineset.com

Hi Dan,

I hope you are well. I am simply writing you today to vent. I own gold. It is insurance. It affords me peace of mind. But I’m also a speculator. I own futures options and mining shares. As of today, I quit.

I’ve been a licensed rep for my entire adult life, almost 20 years. I have never, ever witnessed, on a daily basis, a market that is so blatantly manipulated as gold on the Comex. Furthermore, the manipulation takes place so publicly in the clear light of day, agents of the Fed and the Treasury act to systematically blunt all natural market forces. This happens in America, for the love of Pete!! Additionally, willing accomplices in the financial media carry the water for the criminal manipulators with their daily cause-and-effect market musings to the uninformed masses who fail to recognize the obvious verbal contradictions from one report to the next.

- 5/11-14: Euro collapse. Buy Gold. (while Goldman and JPM sell theirs to dupe algos and hedgies).

- 5/17-18: Euro collapse. Sell Gold. (while Goldman and JPM sell more to paint the tape and create "resistance").

Yes, I suppose it is time to quit trying to profit from gold. As Jim consistently maintains, gold is insurance, period. It is not a trading vehicle.

For the sake of my sanity, I’m taking his advice.

CIGA Craig

Hello Craig,

Trading any rigged market is almost impossible unless you become a one minute bar chart oriented trader and go with the flow on any given day. The problem becomes that you are then trading purely as a technician and attempting to compete with the algorithm and high frequency trading crowd which own the playing field. You can take a few points out of the market doing that but you are then basically a scalper.

I personally do not trade any market based solely on technical indicators because I never made any money doing that my entire career and figure there is no point in trying to start now!

The only way to trade gold in my opinion is to buy it on weakness and sell it on strength. You can make money if you do that. You understand the reason why gold will move higher have not changed and that the selling by the banks is merely a gimmick that is used to flush out the spec longs who buy the market while it is making all time highs.

Wait for the specs to get flushed, watch for signs of a bottom and then buy it with a definite risk level that you are comfortable with.

Again, this is HUGELY different than holding gold as insurance against the depredations of the banking scum and their pals in the monetary sector. That is your insurance and you do not trade it – you accumulate it on bouts of weakness and can then thank the damn fools who are throwing theirs away at the bottom of a price reaction.

Gold is becoming the currency of last resort and that it not going to change because a Central Bank floods a system with liquidity and makes money available. The effects of this compounded increase in the amount of money in the system are going to be felt in an inflationary outbreak down the road. You will be glad you own the metal then.

I personally think that the more the price riggers jack with the system and play games in the paper market, the higher the price is eventually going to go. The harder you press down on a spring to compress it, the more fiercely it uncoils.

Nearly any astute investor OUTSIDE this country now knows that the paper Gold market is being rigged by the US government and its pals at the bullion banks. They are using that to their advantage as the short sighted fools of the West cede any economic advantage to the rising powerhouses of the East. Whoever owns the gold will rule the world. It really is that simple.

There really is something about gold that people can understand who are watching their currencies implode. No amount of bullion bank chicanery and official sector theft is going to change that. Gold is real money and always will be in the minds of the public, even though a war against it has been waged for three decades in the West.

Best to you,
Trader Dan


Jim Sinclair’s Commentary

I would like to add my voice to this quote from Trader Dan.

It will be the various Goldmans that will make the most money in gold after picking the trader’s/scalper’s pockets dry.

"I personally think that the more the price riggers jack with the system and play games in the paper market, the higher the price is eventually going to go. The harder you press down on a spring to compress it, the more fiercely it uncoils."

Will gold ETFs shut you out?

Wade Hansen
Gold prices have been rocketing higher the past two days. Since the start of the trading day on Wednesday, September 2, gold prices have climbed from just above $950 per ounce to just below $1,000 per ounce.

To put things in perspective, gold prices have only been above $1,000 per ounce on two other occasions---March 2008 and February 2009. Gold prices reached their highest levels on March 17, 2008 (it's quite fitting that the market found the pot of gold at the end of the rainbow on St. Patrick's day, if you ask me) at $1,033.18 per ounce.

Needless to say, this is an extremely important time for gold prices. If they can break up and through resistance at $1,000, we could see an exponential rise in the value of gold. The question is, will you be able to take advantage of rising gold prices?

You see, for the past few years, individual investors have been taking advantage of rising commodity prices---like gold---by buying commodity-based exchange-traded funds (ETFs) and exchange-traded notes (ETNs) [ETFs vs. ETNs]. Commodity ETFs and ETNs track the performance of various commodity prices. So when you buy a commodity ETF or ETN, you make money when commodity prices go up, and you lose money when commodity prices go down.

The SPDR Gold Trust (NYSE: GLD)---an ETF that actually buys gold and holds it on reserve---has been a favorite of gold investors. It has been so popular, in fact, that the trust now holds more than $32 billion of gold on reserve.

But herein lies the problem. Commodity ETFs are getting so big that they are directly affecting the commodity markets---both the futures markets and the markets for hard commodities. For instance, when investors buy shares of United States Oil Fund LP (NYSE: USO), the fund managers have to go out into the futures market and buy more crude oil contracts, which pushes the price of those contracts higher.

The impact these commodity ETFs have on the futures market has caught the attention of the Commodity Futures Trading Commission (CFTC), and the CFTC is now investigating whether or not it will curb the amount of futures contracts any ETF can hold. Regulators are also looking at potential limits on the amount of gold and other commodities ETFs can hold.

So what does this mean for you?

ETFs may be forced to limit the number of shares they have available. They may even be forced to redeem shares and cut availability even further. Hopefully everyone involved will be able to figure our a solution that will allow us individual investors to maintain access to the commodities market via ETFs, but we'll have to wait and see.

Wade Hansen in an analyst for Learning Markets