Another Mysterious IMF Gold Sale

From the Far East open... and up until an hour after London opened yesterday... about eleven hours in all, the gold price was down less than five bucks. This was against the backdrop of a relentlessly rising dollar. But around 9:30 a.m. in London, gold caught a bid, which continued into New York trading until shortly before 9:00 a.m. Eastern time when the price went vertical to its high of the day at $1,193.30 spot. Then the U.S. bullion banks pulled their bids.

There was a brief moment of stability at the London p.m. gold fix... but then the tech funds once again found themselves selling into a vacuum.. and the price fell like a stone. By the time the smoke cleared... and despite a dollar that was up well over 100 basis points at one time... gold was only down a bit over ten bucks. The low of the day [$1,166.20 spot] was at the close of Comex trading.

And now for silver. As Ted Butler keeps harping on... and he's absolutely right... silver is at ground zero of the precious metals universe for the bullion banks... especially for the 'four or less' traders, whom I believe to be JPMorgan, Bank of Nova Scotia, HSBC USA... and Deutsche Bank. But JPMorgan's short position dwarfs the other three. As of the April 27th Commitment of Traders report, the four largest traders held almost 52,000 contracts net short. This is equivalent to 260 million ounces of the stuff. And, according to Ted... "the portion of the Comex silver short position held by JPMorgan, is indicated at roughly 150 million ounces of that 260 million ounces."

This is why the attack on silver was so vicious. These bullion banks are making every attempt to cover their short positions... and attacks like these are all they can do... as they have no metal to deliver. They are naked short. I noted yesterday that SLV couldn't even come up with 15 million ounces that they were owned... where in the world do you think that 260 million ounces is going to come from that these '4 or less' traders are short? You will note, that despite a dollar that was up over 100 basis points yesterday, that silver opened in New York only a dime below it's Monday afternoon close. The attack on silver came at the same time as the attack on gold, platinum, palladium, oil... the works. By the time New York trading was over, silver was down almost a dollar... and was down $1.01 from it's opening high of $18.80 spot, to it's New York low of $17.79 spot.

Here's the dollar graph for Tuesday... up about 130 basis points from the beginning of Tuesday's trading day in the Far East until the close of trading in New York at 5:15 p.m. Eastern time yesterday afternoon. It was up over 60 of those basis points at 9:00 a.m. in New York when the bullion banks pulled the pin... and gold was already up over $10 from Monday's close... but silver was down about a dime. All of this despite a rapidly appreciating greenback. It should be obvious, dear reader, that both gold and silver are now currencies in their own right... and you should own lots of them... plus the shares of companies that mine them.