War In The Gold & Silver Markets Continues To Rage After Takedown
War In The Gold & Silver Markets Continues To Rage After Takedown from King World News
The war in the gold and silver markets continues to rage after the recent takedown.
January 12 (King World News) – James Turk: It’s good to see gold and silver stabilising after the drubbing given to them on Friday, Eric. It’s worth reviewing that event because we’ve seen it happen the same way many times before.
The first wave started Friday morning at exactly 8.00am London time. Traders barely had an opportunity to turn on their screens. There was a barrage of paper selling. Nobody sells in size at that time of the day unless your goal is to paint the tape. Any profit maximizing trader looking to exit a long position would not be so careless…
At that time Asia is closed, London is just opening, and it’s the middle of the night in the United States. So it is one of the most illiquid times of the day, and being Friday when people are thinking about the weekend, it is also one of the most illiquid times of the week. Clearly the seller Friday morning had a different objective than trying to get the best possible price.
Obviously the barrage of selling drove the price of precious metals prices lower. So it was mission accomplished by the seller. The tape was painted, and it got the ball rolling downhill.
Painting the tape like this reminds me of the infamous “Brown bottom” when the gold price reached a new low price after the British Chancellor, Gordon Brown, announced in May of 1999 that Britain was selling half its gold reserves. He painted the tape by announcing the sale in advance, rather than the logical practice of announcing it after the trade is completed.