goldspiralptnetGold loses 3% in six hours – and no rally

I’ve been posting quite a bit of late about gold, based on my continuing conviction that its price is being systematically destroyed….prior to a buying swoop by Central Banks…and then a revaluation upwards in bank balance sheets – for which allowance is made in Basel IV. (This may or may not involve a blanket ban on all citizen gold trading while that fiddled revaluation is being enacted).

Recently, I suggested that the pace of destruction may well quicken given the growing pressure on bank viability. Today, I believe it highly likely that we have seen the first major evidence of acceleration towards the central banker goal.

Let’s start with a simple chart:

gold6315In just five hours of trading yesterday afternoon CET, gold fell 2.6%. At the the close of play, it stood at $1168.2. There was no discernible rally: it just went ‘wump’ – right off the cliff, the minute the NYSE opened.

The lack of any bulls perhaps reflected the fact that traders who might have wanted to try a rally had already left for the countryside to beat the Friday rush.

goldhistory6315ptnetThe chart above will make your head hurt rather more, but the signals it gives for gold are not good:

Here we see that after late 2008, gold begins to zoom upwards to its 2010 peak of $1923. Look down to the centre right and see where we are now, and then further down to see what – on this basis – would be the likely low gold would reach IF the following happened:

* gold goes down through $1130 quite rapidly

* if gold tests $1030, and drops further still.

At that point, the “no such thing as a gradual panic” principle comes into play.

Most observers would say that the technical low would be $678. Yes, an amazing number. But they’d also tell you that pretty much any time after $1000 would be a good time to start buying: and, as it falls further, keep buying. Because when the CBs’ buying swoop starts, the price will – after they’ve drunk their fill – go through the roof.

I’m not qualified to give technical advice, but at the rate things went yesterday – and allowing for 2-4 strong rallies along the way – gold would be at $500 by the 10th April. I’d imagine there’ll be a rally Monday when the goldbugs return from their Gatsby mansions, but the point here is this: the window is limited. For example, a ten times upward value multiple on Gold would deliver a minimum price of $6780 per ounce. But I suspect that there won’t be much time between CB revaluation of gold and a potential ban on private purchases. Furthermore, a skyrocketing gold price would almost certainly produce a stampede out of the stock market – the last thing anyone in the West wants. So the two acts of grabbing the gold and then closing the door behind them may be almost simultaneous.

If all this sounds too conspiratorial, I suggest you ask what kind of mess some of banks would be in if the asset requirements codicil in the Basel IV document were to be enacted. Basel IV (which is just a nickname given to it by the media – it’ll be called something else) is potentially toxic for the banking industry because it demands much higher standards of asset risk, liquidity, and above all asset calculation. This from KPMG:

‘…..restricting the advantages to banks of using internal models to calculate their capital requirements could take the form of limits on the extent to which risk weights based on internal models could diverge from risk weights under the standardised approach…’
In other words, there’ll be no more of, when asked, why is this throbbing turd here down as worth $2.3bn, “Because we say so”. The best answer to this conundrum for a banker is thus to have something where the valuation is apparently genuine. Gold.
If that valuation is to appear genuine, the US Treasury can give Wall Street all it needs to effect a surge for gold and it would be entirely legal. The US Gold Reserve Act of 1934 specifically authorises the U.S. Treasury Department — through the Exchange Stabilization Fund — to intervene secretly in and rig not only the gold market, which was the original authorisation – but as amended in the 1970s by Tricky Dicky, the ESF is authorised to rig any market — in fact, any and all financial instruments.
What the stock market does next – and how many sour derivative bets it triggers – will of course be crucial. Based on what’s been happening to gold in recent weeks, the pace of value destruction has clearly accelerated. Somebody in there is in a hurry. He (or she, I’m not fussy) sees a giant pantechnicon careering down the road.
We would all do well to keep an eye on stuff.


  1. This may be true but the gold price had suffered three previous days of losses resulting from India’s surprise decision to maintain an import duty on the metal.
    Broker Marex Spectron noted then, ‘The markets are in the doldrums, interest is low and real business is scarce’. They doubted there would be a lot of excitement until Friday when US Non Farm Payrolls data might provide some impetus one way or the other. These exceeded expectations and the US dollar powered ahead. Gold, oil the GBP all fell.


  2. Gold is priced in King Dollars….
    King Dollars are strengthening….Euro is weakening….
    Best to just check the sterling price…..gone up 10% in last 6 months…..


  3. General trivia bit may have a impact in revealing the market.

    Enter Apple to the buyers market to make watches (can’t find link)’
    The special edition one uses gold, estimated 2 oz a watch, anticipated sales a million at $4000 dollars a pop.,news-19966.html – a bit more of a background.

    So we havew a buyer of 2 million ounces. Prices will rise? Or maybe we are moving to market discovery of the true value of gold because an inflated gold value under a “still” operating fiat monetary system does hold a value.

    This gold once in a watch owned by a private citizen can the derivative of it stil exist?


  4. “If that valuation is to appear genuine, the US Treasury can give Wall Street all it needs to effect a surge for gold and it would be entirely legal. The US Gold Reserve Act of 1934 specifically authorises the U.S. Treasury Department — through the Exchange Stabilization Fund — to intervene secretly in and rig not only the gold market, which was the original authorisation – but as amended in the 1970s by Tricky Dicky, the ESF is authorised to rig any market — in fact, any and all financial instruments.”

    If what you have said, above, is true. Then that is why no banker as faced any legal judgement. That as made me feel much better.


  5. Trying to put a reliable interpretation on movements in the gold price is, like so much else these days, like trying to lasso a phantom microbe in an ocean of ether on a dark night. Historical market mechanisms which have dictated the value of just about anything you care to mention have been kicked into a coma using electronic engineering, where the forces applied are all but untraceable. Logic dictates that gold is a store of value, however, it doesn’t fit with the digital demands of the electronic age. Until we realise that digital wealth creation can only ever be illusory, i.e. that in this context electronics can usefully do no more than record real events, we will remain adrift in a sea of unachievable ambition where the pirates hold the upper hand.


  6. All v interesting but I’d be uncertain of trying to use technical analysis in a vastly manipulated market, which is “gold” in name only. Confiscation and bans didn’t work properly the last time they tried it, and in a world where international transactions are easy, China has over 10,000 tonnes of the real stuff, silver is an essential industrial metal and the world outside of the west actually understands the value of these metals…well good luck to anyone trying that kind of tyrannical crap. All it would do is awaken more people to the concept of monetary metals.

    Predicting price direction is almost impossible in those circumstances. I simply continue to say thankyou for keeping the stuff on sale for me! Canadian Maples are so pretty!!!

    And as the Prof said above, unless you bought in dollars, don’t check in dollars. I’m doing pretty well in Euros thanks to Draghi and his moronic/satanic friends.


  7. Hopefully they are just trying to kill the paper market. I can’t believe they reckon they can just confiscate gold in these modern times. People just don’t have that much fear or respect of ‘the law’ anymore.

    Besides, gold isn’t the problem, it is paper that’s the problem, Eccles. (Here’s a photo of a £5 note in payment for my bill, a photo of 50p will do for my change). All these promises not backed by anything.

    I think that once they get the price down low enough (and have bought as much actual gold as they can -a bit late cos the Asians have a couple of years head start) they will change the rules and declare all paper gold and silver has to be cashed in, and a new fresh start made where all new-paper gold has the right to convert to physical on demand.
    Then it doesn’t matter what the price is, the banks will have most of the gold and we will have our little share.


  8. ^^
    This. Private hands hold so little physical in terms of percentage, its not worth the adverse publicity for them to pass any confiscation laws. Paper gold owners deserve everything that’s coming to them.


  9. What is a poor widow or orphan to do when Mario Draghi’s ECB corners the market of “safe” sovereign bonds? Buy some gold coins perhaps?

    IMF in its Report on the Global Financial Stability 2012 listed as safe assets: “potentially marketable assets inventory Insurance” the following:
    A total of 74.4 trillion U.S. dollars: 33.2 (45%) in sovereign bonds AAA / AA 5 (7%) in sovereign bonds A / BBB, 16.2 (21%) in securities with special guarantees; 8.2 (11%) in corporate bonds rated investment grade, 3.4 (5%) in other governmental or supranational debt….. and 8.4 (11%) in gold.


  10. I remain open minded about where gold will go, BUT JW’s central theme I think still holds true, they will do ANYTHING to preserve their precious fiat paradigm, absolutely ANYTHING, because when that crumbles, the power of the elites crumbles with it.
    More and more people are gradually waking up to the fiat/ FRB lunacy and they will stop at nothing to corral the poor sheep into their pen.


  11. Interesting that HSBC (don’t you just love them) are closing their seven London bullion vaults. They are custodians for GLD! Just wondering where they are going to store all that physical bullion for GLD.


  12. Reblogged this on Ordoliberalism and commented:
    I thought this post by John Ward raises the intriguing possibility that the US and the EU are working hand in glove to save the Euro by manipulating the gold market.

    This is the era of gargantuan states in which every conceivable market is manipulated. There are no free markets any more. I wonder what Polanyi would have said about this? See


  13. Pingback: John Ward – The Friday Gold Massacre : Will Gold Be Worth $500 An Oz By APRIL 10th? – 7 March 2015 | Lucas 2012 Infos

  14. John, you think like a private individual – with limited funds!

    All traders think only about getting the most BANG for their bucks, in the short-term – often TODAY.

    If they invest their £50 million slush fund in gold today, they will loose.

    If they invest their £50 Million slush fund in stocks, derivatives, bonds, (ie. Funds with a chance of moving up!!! Then selling again at a higher price minus costs, chances are, they’ll keep their job and bonuses!!!

    You too can play their game – buy/hold 20% physical, invest the rest in a market that has a chance of moving up.

    If physical AU moves stratospheric, you’ll cover all your other loses, but on day to day moves, every move you make will be rigged.

    The algorithms have been in place a long time now… Over time, the House always wins.

    Doesn’t stop you buying physical when we believe that whilst maybe not today, or tomorrow or anytime soon, your theorem will come true… and you’ll be minted because as soon as any government makes anything illegal, it’s black market price quadrupales!


  15. All of this has to be understood in terms of The Transatlantic Trade and Investment Partnership. No wonder Obama did not want to make the details known! The EU will become all but a state of the USA. Actually it will be worse. I’ve written about this in “Against the TTIP” in my ordoliberalism blog. So I looked closer at how the US Federal Bank works (in Wikipedia). There are several branches each covering a group of states. Presumably, in what is in effect the creation of an EU-US loose federation Europe will divide its ECB into divisions, probably one for Club Med. But now I am guessing wildly.


  16. The recent PM value pattern may just simply reflect a new mode of operation in a new operating environment.
    That is, has anyone noticed the European, anti-US warmongering rhetoric that has sprung up this weekend?
    Mutti / Hollande = EU = Putti.
    Seriously, does it really take 3 weeks for the penny to drop out in MSM land, or is the media being controlled and reigned in continually? Ummm, derr.
    There are serious behind the scenes actions taking place and settings devised for the next major distraction / action.


  17. Pingback: John Ward – Stranger Than Satire : The Job Of A Piss-Taker Gets Harder By The Month – 8 March 2015 | Lucas 2012 Infos

  18. Pingback: John Ward – Crash2: The Risk List In Full, And Why The Collapse Is An Eventuality We Cannot Resist – 12 March 2015 | Lucas 2012 Infos

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