Gold & Silver Smash & What Soros & Major Players Are Doing

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kingworldnews.com

Today one of the savviest and well connected hedge fund managers in the world spoke with King World News about the high volume takedown in the gold and silver markets and what major players such as Soros and other are doing right now.  Outspoken Hong Kong hedge fund manager William Kaye also discussed who is on the buy side of all of this selling.  Kaye, who 25 years ago worked for Goldman Sachs in mergers and acquisitions, had this to say in this tremendous interview.

Kaye:  “This is unusually high volume of trading in gold and silver in Asia.  We have already traded about 45,000 contracts and it’s still very early in the trading day.  But as I said, that’s unusually high volume. 

The suppression of the metals, which became pretty intense during US trading on Friday, has continued in the very thin Asian trading.  So this is a pretty interesting setup.  It’s clear that wherever they want to push the price of gold and silver they are not done yet....

“I’m not sure what their target is, but we are starting to see a bit of a fight break out now between the bulls and teh bears.  The battle is getting joined by major players.  There was evidence of a very large sovereign buyer at the fix in London on Friday.  So there was major interest for physical gold at levels roughly $40 higher than where we are at the moment.

At the same time we have publicly bearish elite such as George Soros, who is still telling everybody to sell their gold, who has personally turned extremely bullish.  He is adding to his positions, including the most leveraged way you could play a recovery in the gold price.  He is buying call options on the listed index for the junior gold miners.

Now, there is no more leveraged way that you could play a recovery in gold price than taking that position.  So what he is saying is he is willing to risk $25 million by leveraging long in the gold market because this is a position that could easily go to zero.

So he’s risking his money in a relatively short period of time.  The disclosure in the filing does not give you the duration of the call option, but it should logically be listed as a warrant if it was more than a year.  And having structured these kinds of products back in my days on Wall Street, and sold them to clients, typically options of this type have anywhere from a 30 day to a six month duration. 

So what Soros is really saying is, ‘Personally I’m bullish, but I would like to buy gold even cheaper than it is today, so please sell it to me.  Meanwhile I’m positioning myself in the very near-term to see a major rally in the price of gold.’  That’s what he is really betting on.”

Kaye also added:  “What’s interesting is that they don’t expend very much ammunition doing these types of raids during thin Asian trading in the gold and silver markets.  Yes, the price action is down and the volume is relatively high, but key players haven’t backed off from the buy side here.

Even in thin Asian trading there are market participants who are willing to buy these contracts, even though they are well aware that the people manipulating these markets can still take the price lower.  Even in those conditions, the bottom line is there are players that are still on the buy side here in both gold and silver.”