Again I remind you that the price of gold is actually a report card on the value of the US dollar, and the American government and economy. A rising gold price indicates growing mistrust in the safety and stability of the dollar, falling confidence in the competence of the US government, and heightened fears about the strength of the private financial sector.
Such concerns were certainly not allayed when it was recently widely reported that, for the first time in history, the majority of Americans now depend on payments from government as their “income” rather than obtaining their sustenance from the private sector.
Because of this inverse relationship between the price of gold and public confidence in the value of the dollar, the US government can derive huge benefits if gold’s price is suppressed. Among the benefits are lower interest costs paid on Treasury debt and lower payments on entitlement programs tied to the official inflation rate.
As federal government documents have been declassified and released to the public, it has been confirmed that the US government has intervened to manipulate gold prices starting as early as the end of World War I. In a letter to the Gold Anti-Trust Action Committee, Inc. (GATA) dated September 17, 2009, Federal Reserve Bank governor Kevin M. Warsh confirmed that the Fed has gold swap arrangements in place with other central banks, one of the means by which gold prices can be manipulated.
The tactics used to suppress gold prices have long become so blatant that professionals in the gold commodity trading pits can easily identify the times when prices are being manipulated.
One event where gold prices are regularly suppressed is at the monthly expiration of gold and silver option contracts. There are two different expiration dates each month. Normally, the COMEX options expire on a Tuesday followed the next day by the expiration of Over The Counter (OTC) options contracts. The larger options market is on the COMEX, though there are ten to fifteen banks and brokerages in New York, London, and Zurich that make markets in the OTC contracts.
Up until they expire, call options give the owners the right to demand delivery of the gold or silver at the contract’s strike price. Should the price of gold rise above that level (referred to as being “in the money”), owners of call options can pay the strike price and other expenses and demand delivery of the physical gold from the party who sold them the contracts. Should this occur, that would squeeze gold supplies as the gold inventories on the COMEX are only sufficient to cover a small percentage of outstanding contracts. A supply squeeze likely would have the impact of pushing up prices.
The COMEX options expired this week on Tuesday. As I had predicted last week, the prices of gold and silver were suppressed below the strike prices where there were the largest number of call options—gold at $1,200 and silver at $18.00.
The pattern for the past several months has been for gold and silver prices to be suppressed until after the OTC options expired upon the close of the COMEX the next day. Once the monthly options have expired, the pattern has been for a quick recovery in both gold and silver prices.
That is not what happened this week. The first part of the manipulation to keep gold below $1,200 and silver under $18 through Tuesday’s COMEX close was successful. However, almost as soon as the COMEX closed, gold and silver prices climbed above those levels.
On Wednesday, it looks like the US government, which largely acts through its US and foreign trading partners, was unable to push down gold and silver prices below the critical $1,200 and $18 at the COMEX close! Where this manipulation tactic has worked for many months in a row, this time the surge in demand for physical gold and silver overcame the resistance.
The failure this week of these manipulation efforts is a huge signal that we are closer to the day when the floodgates will give way and we see gold and silver prices surging more quickly and by greater percentages than we have seen in decades. Once again, I recommend that you not wait to protect your assets with some physical gold and silver. Most forms of bullion-priced physical gold and silver are still readily available at attractive premiums. I don’t know how long I will be able to keep saying so.
Patrick A. Heller owns Liberty Coin Service in Lansing, Michigan and writes "Liberty's Outlook," a monthly newsletter covering rare coins and precious metals. Past issues can be found online at http://www.libertycoinservice.com/ Pat Heller is also the gold market commentator for Numismatic News. Past columns online at http://numismaster.com/ under “News & Articles". His periodic radio interviews can be heard on WILS 1320 AM in Lansing, www.talkLansing.net, and on www.yourcontrarian.com.
Related posts:- High Risk of Further Gold and Silver Price Suppression by Early Next Week
- Sudden Temporary Gold And Silver Price Drop; Retail Sales Soar
- US Government Engineers After The Fact Gold Price Suppression
- Is The COMEX Manipulating Gold Margins To Mask Silver Supply Deficits?
- How Gold and Silver Prices Were Suppressed Early This Week
pat…….i tried to save 2 friends in michigan city one owns several retaurants…….lost tons of money…….the other is now retired had a 40 person law firm….lost millions. larry fegaras and i meet regularly in rhodes greece…..i suggested to him to call you…with warning….i told him you are one hour away……nobody listens to me. i went into gold in 2002 150%……..reason i am retired in greece. 8 years in gold market reading 2-4 hours a day and my advise goes nowhere. anyway i read your posts as if you do GODS work.
I am just a little guy (Joe American) I have been converting “Fiat” money into Gold and Silver since they were $290.00 and $2.50 per ounce respectably! I have been trying, with all my heart, to convince friends and relatives to do the same to protect their wealth and it appears to no avail! One would think that the “handwriting is on the wall” and for all to see but too much “wool” apparently is covering their eyes! I am beginning to think that the “Ponzi scheme” of 1913 is just so simple that they “cannot see the forest for the trees!” The “Sheeple” need to wake up and listen to the Shepard or they will ultimately become wolves next meal!
Better listen to this article and the two comments above.
Suggest a room full of freeze dried food. and a coupla big water filters. That is all you need along with the Precious metals as money.
If I am an idiot, and can’t count, then you will have some nice shiny money to spend, and some picnic food for a few weekends.
If I am right as above, then you will be truely, ” a happy camper”. DO IT NOW
Capt Brian
the Lost Navigator
THANK YOU FOR YOUR SUPPORTIVE COMMENTS…..WE MAY NOT BE ABLE HELP OTHERS EVEN FAMILY MEMBERS…BUT…REMEMBER ONE ITEM………”HE WHO HAS THE GOLD RULES”.
They could have papered the price below $1200 this week, but they didn’t because as Pat said in another article, when the price was under $1200 on May 21st (for stock options’ expiry), that was one of his highest retail sales days of the past 30 years. The manipulators don’t want to go there, unless they have to, because physical inventory is tight.
They got away with not risking delivery on the 1200 strike and above for last month’s futures options expiry, but there were a ton of calls running up to that strike that expired in the money. 56,481 calls running up to and including strike 1195, easily more than double what I’ve seen expire in the money since I’ve been keeping track since January. What I see that as is they would rather risk defaults on the COMEX, where they can bribe the option call holders with premiums for not taking delivery or impose fines for taking delivery, than risk more shortages at the retail level.
Amend what I said above:
“56,481 calls running up to and including strike 1195, easily more than double what I’ve seen expire in the money…”
Actually closer to triple.
Remember we need to continue to get the gold and silver off comex and make fractional units,thats were the real shortage is,I know alot of people that would buy fractional gold ,most people cant afford to buy coins in one ounce form and they will buy 1/10 and 1/4 eagles ,plus if you buy online you feel safer taking risks on smaller amounts,I have been jipped on ebay 3 times out of 1000s, first time was on 100 ounce bar of silver, then 1 ounce gold eagle ,then 5 gram bar of gold,the first two were hard to deal with but the 5 gram gold made me mad but it didnt take away any sleep. I will only buy 1 ounce coins from gold companes and they will go straight to the bank as all my gold now goes there.
DiscoveredGold-
i would NOT recommend you or ANYone keeping their precious metals in any bank or “safe” deposit box.
One of the little-known provisions of the USA PATRIOT act(and subsequent treasonous Acts) is that once the president declares an “emergency,” all safety deposit boxes will be locked down, and the ONLY thing you’ll be able to get out of them is certain paperwork, then only after the approval of some gov’t bureaucrat.
“Emergency does not create power. Emergency does not increase granted power or remove or diminish the restrictions imposed upon power granted or reserved. The Constitution was adopted in a period of grave emergency. Its grants of power to the federal government and its limitations of the power of the States were determined in the light of emergency, and they are not altered by emergency.”
– Justice Charles Evans Hughes, (1862-1948) Chief Justice of the U.S. Supreme
Court.
Source: Home Building & Loan Assn v. Blairsdell, 1934
Food for thought.
Warmest regards-
Hatman
WOW>>> I actually predicted to myself 2 weeks prior that there must be a level of price say, anything above 17.80 that if held to June would really deal a punch in the nose the Wallstreet Banksters. I never expected to hear word of it either and here it is! Thanks Pat!
Replying to danny kutscher
Danny i know exactly what you mean. No one listens to me either EVEN WHEN I have shown them the receipt to prove the price I paid and thereby prove my profit. Even when I show them the trend line…Heck even my own family doesn’t view commodities as an investment but guess what? I don’t care! LoL
Know why?
Because I have averaged a profit of anywhere from 100-200% profit so far (depending on the commodity)
So my young friend be happy —
Len