I put up with a certain amount of flak for my opinion that the markets are fixed, completely manipulated from top to bottom, and the gold and silver futures market is the worst example of that. People role their eyes at me all the time when I make this statement. Fine. If I am so far out to lunch, then obviously the trading activity during the last few days must be completely random and normal behaviour in a functioning market. So I would like to hear from some of the people that believe that.

Please, explain to me how we see a drop of $1 per ounce in silver today, and more than $40 in gold. I am not an idiot, I see that all the markets are also down sharply, but the selloff in the metals began first, and since when should gold and silver trade in lock-step with the overall markets, when historically the relationship has been inverse?

Is it the market pricing in an expectation of deflation? That would be supported by the low yields on the treasury notes and long bond. But historically low bond yields are gold bullish, since the competition towards higher returns is reduced in such an environment. And gold has been hitting new highs in most world currencies, so it is hardly symptomatic of a market that is fleeing deflation risk.

Is it due to deleveraging from hedge funds and banks? The COT data does not support this conclusion at all. Commercial shorts and large spec traders have been unwinding short positions in the metals for weeks, even as the price of gold and silver were rising. In fact, one may argue that the metals were rising BECAUSE of shorts closing positions. The COT data now shows near recrod lows for open positions. Whom may we say is closing out positions? If anyone wants to advance that suggestion, kindly do more than just repeat the party line, since it does not add up.

Is it simply due to a rising US dollar? The dollar is well off its recent highs, and we have seen numerous other occasions recently when gold was rising in tandem with the dollar. So to see an increase of half a cent in the dollar today should not provoke a massive drop in gold and silver, unless there is some other malign interest acting behind the scenes to exagerate that move - hence, manipulation...

Help me out here folks. Lets ignore the macro-relationships for gold, and just think about the real picture. We have a financial crisis underway that is more severe than any other time in the history of civilisation. Gold completed a technical breakout last week. And then immediately it is crushed lower to start off a new week/month, despite overall bearish data around the planet, and massively gold bullish fundamentals. How can anyone not conclude this market is completely rigged?

cheers!

mike