We Are Now Seeing Shocking Behind The Scenes Action In Gold And Silver!

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Today London metals trader Andrew Maguire told King World News that we are now seeing shocking behind the scenes action in gold and silver!  Maguire also discussed what is happening in the physical gold market as well as what the bullion banks are up to.

Andrew Maguire:  "Eric, looking back at this highly orchestrated FOMC week, it's important to note that once again we experienced ‘official’ boilerplate gold selling action into the announcement.  Based upon the footprints into the meeting I had strongly suggested both to my readers that there was going to be an FOMC surprise….

"Aside from the strong dollar, which took place in the face of weak economic data, I knew the pre-FOMC selling was ‘official’ because the cobasis was pointing to ridiculous  extremes.  This validated the tight wholesale markets I have been reporting.

Backwardation Now Exists But Fed Activity Still Predictable

 

This was also evidenced by the permanent backwardations that are confirming the extremely tight immediately deliverable physical supply conditions.  It is no coincidence we see a heavy gold market every time we have FED announcements.  Statistically this should not be possible.  What is even more obvious is that ‘official’ supply only comes in aggressively when there is going to be a miss, or in this case a dovish Fed, and that is exactly what we got.

 

Each day for the last 2 weeks the insider commercials — yes the same bullion banks that have gold accounts at the BOE — took the naked short side of each day's non-leveraged Asian physical buying.  And as soon as the Chinese markets closed, these commercials moved to close each gap in price.  This action, when conducted in oversold Comex-centric conditions, always foreshadows a turn in the paper markets, as the last residues of wrong-footed naked short sellers and early longs, who are encouraged by the physical buying, are extracted.

Where Are We Now?

 

So where are we now? How long can this seemingly eternal manipulative gaming continue?  The answer is not long.  As price discovery migrates to the physical exchanges, it is generally understood that this creates a limit as to how far naked short futures traders can push prices.  However, what is not generally understood is that the percentage of the off-LBMA trades is both increasing and physically settled. 

 

I am also starting to see very large interest for our new membership-based non-LBMA physical exchange.  This exchange employs disruptive technology that levels the playing field by taking away the traditional power and privileges the commercials have traditionally enjoyed.  This membership exchange already employs over 50 brokers, of which I am one.

 

History In The Making

 

I am pleased to confirm I have had it verified that in April we all plug into the soon-to-be-announced international facing exchange, connecting all global hubs.  This is history in the making and it will change the way bullion is traded forever.

Radical Change In Sentiment Toward Gold And Silver

 

From a fundamental perspective, there has been a radical shift in sentiment towards gold and silver.  This is not reflected in the synthetic markets but is increasingly present in the physical markets.  It is becoming widely accepted that with negative real yields on deposits, sovereign bonds & 10-Year Treasuries, the opportunity cost of owning gold and silver are now essentially zero.  Even staying in cash on the sidelines raises the risk of being bailed-in, resulting in your cash disappearing from banks.  

 

In reality, depositing cash in a bank is really making a loan to a bank in which entities become an unsecured creditor.  This is one major reason why we are seeing fresh money enter physical gold and silver, both as a safe haven investment and as a safety hedge.  I am not even accounting for the obvious Chinese, Indian and southeast Asian demand, which, cumulatively, far outstrips all available mine supply.

Shocking Behind The Scenes Action In Gold And Silver

 

I am seeing this physical demand here in the West as well, in all currencies.  These fresh inflows of demand are not from what I would classify as traditional money or indeed in any way related to 'gold bugs,' nor does this fresh money necessarily have a bullish view on gold.  Instead, it is true safe haven buying of physical metal, which is being stored well outside the reaches of the LBMA banking system and government tendrils.  Eric, this is unprecedented behavior. 

 

There is lots of evidence of this physical buying activity.  Obviously, this raises an important question:  Why is the price of gold so low when physical demand significantly exceeds immediately deliverable physical supply?  Gold demand already exceeds mine supply and immediately deliverable available inventories are ‘at the margin’ extremely tight and made even tighter by the FOMC instigated raid this week.

There is a reluctance to bring supply to the market at current levels because outside of the synthetic world of Comex paper trading, there is a growing perception that supply/demand fundamentals will catch up with the highly-leveraged markets.  So the paper Comex casino is now simply viewed as a place where regular cycle swaps of open interest from weak to strong hands determines price.

Breathtaking Upside Moves

 

And despite today's rally, Eric, I cannot emphasize just how bullish this current setup is.  People are in for a major wakeup call as the world edges closer to the launch of the next global financial crisis.  As the crisis unfolds, the upside price moves in gold and silver will be breathtaking."