From Jesse's Café Américain....

Posted by Jesse at 4:09 PM
05 April 2012

"The exact methodology being deployed that enables the dominant commercial traders to pull this scam off repetitively, aside from outright collusion, is High Frequency Trading (HFT). HFT is the collusive bundling of advanced computer hardware and software that is so advanced and powerful that it has achieved the power to move prices sharply with little actual trading required in setting prices. The way HFT works is that the collusive trading programs suddenly flash great numbers of contracts for sale. But before much actual selling occurs, all the other traders in the market see the great volumes of contracts apparently offered for sale and these other traders withdraw buy orders and start entering their own sell orders to get ahead of the great wave of HFT sell orders offered. Then a not so funny thing happens. Most of the time, very few of the HFT orders originally offered for sale get filled or executed. Instead, they are quickly cancelled. There's even an operative term for this practice that's perfect – spoofing.

Most of the HFT orders are never filled, nor are they ever intended to be filled. These spoof orders are intended to scare others into selling so that the dominant commercial traders can buy gold and silver contracts. And make no mistake, this phony HFT activity has been successful, to the great shame of the regulators at the CFTC, who know that this manipulative trading is against commodity law. The proof that it is manipulative trading lies in the data published by the CFTC. That data shows the big dominant commercial traders are always the big net buyers on the big down days. It is not possible for that to be coincidence; it as close to cause and effect as is possible."

-Ted Butler


“The tactic is always the same. The gold banks enter the COMEX and offer more gold for sale at the market than has been mined in the last five years. Immediately, the locals (pit traders) try to run in front and hit any bids they happen to have on their book or are out there in order to get the price down.

Gold tanks down to the $1,640 level and now the brokers for the gold banks begin to enter the market to cover shorts to reduce the short position taken, and most likely to completely flatten it on the day. This has been going on from 1968 to 1980 and it’s also been going on from 2001 to today. The net effect is absolutely nothing."

-Jim Sinclair, ( http://tiny.cc/c17acw )


“Gold has to get through $1,800. $1,600 has to hold in the short-term. $1,550 to $1,600 is okay, but I wouldn’t like to see a move to the lower end of that range because your uptrend and support are coming in right now around $1,600.

Gold has a horizontal consolidation in place. I was disappointed gold couldn’t break $1,800 previously, but again, sideways is okay. This sideways action is healthy, this consolidation, but gold now has to prove itself.”

-Louise Yamada, ( http://tiny.cc/l37acw )

In a somewhat unusual circumstance, the BLS has decided to release the Non-Farm Payrolls number tomorrow even though US markets will be closed.

Since gold, and to a lesser extent silver, typically get hit around NFP days, we might attribute the action that was tied to the FOMC minutes release and the PM fix to that.

Chart-wise I am very comfortable with a short term decline in gold to the 1580 level, although I would be a little concerned if it should break support at 1550 and stick a few daily closes down there.

This all looks like a long sideways consolidation within a broad symmetrical triange. But we have to let the market instruct us, and that will only come over the next few weeks, and maybe months.

http://jessescrossroadscafe.blogspot.com/2012/04/gold-daily-and-silver-weekly-charts_05.html

Dan