Dave in Denver writes:
"I preface this remark by saying that it is just a theory, but could Wednesday's Comex paper raid possibly be a signal of desperation by the cartel? We have been hearing countless reports out of London - the nexus of the world's physical bar market - that delivery supplies of gold and silver are getting tight. Was Wednesday's raid an attempt by a desperate bullion bank to trigger open interest selling by longs in order to reduce the number of potential accounts that hold for delivery in the face of a tight physical bar market?
"Wednesday right after the Comex opened, a total of 35,000 gold contracts were sold almost at once, with one order reported to be nearly 8100 contracts. This is roughly 104 tonnes and 24 tonnes respectively. It caused a "cliff-dive" in the price of gold/silver that was not cross-correlated with any other commodity market or equity/fixed income index. Why would someone, using paper, sell so recklessly and abruptly like this, flooding the market with an inordinately heavy supply of paper "gold." Any veteran trader knows that if you are trying to unload a disproportionately large long position - that is, large relative to the price and volume context of a given market - you have to bleed your offers into the market and not give away your size in order to try and maximize your sell proceeds. If you are not operating in this manner, you are either irrational or illegally attempting to influence the price lower. In the absence of any other credible explanation or theory being offered - and an open admission that a "computer mistake" was not the catalyst, this was clearly an attempt to exert manipulative - illegal downward influence on the price of gold. There is no other ..." click through for the rest.