Why Gold Fell – The Pros Harvesting Cash from the Unsuspecting

Gold Plummets and Investors Suffer

Published below are gold charts reproduced from Kitco (http://www.kitco.com/charts/) on Thursday April 17, 2017.

What they clearly show is someone taking advantage of a market. Probably perfectly legal, but highly offensive to the average investor in the market.

What Really Happened

This is a story about someone watching the market, seeing an opportunity and using their great wealth to make enormous sums of money. If you are a gold bug, or an investor who is seeking some security through the purchase of gold, or someone that has exposure to the junior market, YOU WERE SEVERELY AFFECTED.

We have been cautioning about the price of gold for many months now. We suspected that after gold hit a new high in 2011 of over $1,900, the market was being forced higher by traders rather than normal demand. We warned our readers to be cautious about the gold bugs and PROPHETS OF GOLD. As far back as November 2011, we were suspecting something. The expose we published then, has come true.

When inspecting the charts and the real numbers of supply and demand, it just seemed as if gold was in the hands of a few, who could drive the price as they wished.

The Opportunity That Devastated the Market

The drop in the price of gold was not a market driven event. it was a deliberate action by a few to take gobs of money from the market and enrich themselves.

The first indication was a Wall Street broker publishing a warning to their clients that the price of gold would see weakness and to move their positions away from gold. Of interest, that same firm a few months ago, took the opposite view.  That firm was accused of unfair practices in the 2008 scandal and financial meltdown.

The Second Shoe Falls

When the gold future markets opened on Friday April 12, 2013, an incredibly monstrous amount of June gold future was offered for sale – 3.4 million ozs or about 100 tons. When that enormous selling pressure hit the market, gold weakened.

Two hours later, a more significant cannon blast – an act of war – hit. Another 300 tons of selling hit.

Compare this to actual real production of gold in the entire world in the entire year of 2012 which was about 2,500 metric tons. Remember the Iraq war? “Shock and Awe” which meant destroy the enemy through overwhelming power that was unheard of previously.

That is the exact strategy used to create a selling panic and drive the price of gold instantly lower from $1,550 to $1,350. PANIC EVERYWHERE. PANIC SELLING EVERYWHERE.

How Much Cash Was Needed to Accomplish This Devastation

Gold futures are bought on margin. There is no real gold that changes hands. Just a promise to buy or sell, with a central clearing body to make sure that the proper amount of money changes hands. The average margin rate is about 3%, so it roughly took $1 billion dollars, used for one day, to destroy the savings of untold millions of unsuspecting investors.

When you sit back and think about free markets, you might wish to rethink this false ideal about freedom.

What isn’t Free About the Markets

  • He with lots of money controls the markets
  • The markets are like farming. You plant seeds, you let the crop grow and when the time is right, you harvest the crop.
  • Manipulation is a standard feature

Sign up for CymorFund’s Stock Pick investor newsletter at www.cymorfund.com. Articles on specific stocks as well as commentary and explanation of the stock markets and stock trends.

 

 

We may or may not have positions in the securities we name under ‘Whats-Hot-or-Not’. Whether an investment is made in a particular security depends on many factors, including portfolio balancing, timing, cash and capital reserves, asset allocation and numerous other factors. Readers are advised to do their own research and decide in light of their own circumstances. Matters discussed contain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied.

The views expressed are opinions and are not investment advice. Persons investing should seek the advice of a licensed professional to guide them and should not rely on the opinions expressed herein. This blog is not a solicitation for investment and we do not accept unsolicited investment funds. This report is for information purposes only, and is neither a solicitation nor recommendation to buy or sell, nor an offer to buy or sell securities. We are not a registered investment advisor nor a broker-dealer in any jurisdiction. The information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of the available data.

By Larry Cyna

Mr. Cyna is an accomplished investor in the Canadian public markets for over 20 years, and has managed significant portfolios. He is a financing specialist for private and public companies, and has expertise in real estate and debt obligations. He has assisted private companies accessing the public markets, has been a founding director of public companies and continues as a strategic consultant to selected clientele. He is and has been a director, a senior officer and on the Advisory Board of a number of TSX and TSXV public companies in the mining, resource, technology and telecommunications sectors, and the Founding Director of two CPC’s with qualifying transactions in mining and minerals. He was an honorary director of the Rotman School of Management MBA IMC program, has completed the Canadian Securities Institute Canadian Securities Course & Institute Conduct and Practices Handbook Course, was a former Manager under contract to an Investment Manager at BMO Nesbitt Burns, a roster mediator under the Ontario Mandatory Mediation Program, Toronto, a member of the Institute of Corporate Directors of Ontario, a member of the Upper Canada Dispute Resolution Group, and the Ontario Bar Association, Alternate Dispute Resolution section. He obtained his designation as a Chartered Accountant in Ontario in 1971 and was the recipient of the Founder’s Prize for academic achievement together with a cash reward. He became a CPA in the State of Illinois, USA in 1999 under IQEX with a grade of 92%. He is a Member of the Institute of Chartered Accountants of Ontario and the Canadian Institute of Chartered Accountants. He holds certificates in Advanced ADR & in Civil Justice in Ontario, Faculty of Law, University of Windsor, certificate in Dispute Resolution from the Ontario Institute of Chartered Accountants. Previous accomplishments are Manager of Cymor Risk Consultants LP specializing in Risk Management Assessment; CEO of Cyna & Associates specializing in mediation and ADR; Founder & Senior Partner of Cyna & Co, Chartered Accountants, a fully licensed and accredited public accountancy firm with international affiliations; and was a partner in a large public accountancy firm. Mr. Cyna is well known in the Canadian Investing community. He is invited to, and attends presentations given by public companies usually 3 or 4 times each week. These presentations are intended by the various hosting companies to present their inside story to sophisticated parties and Investment Managers for the purpose of attracting funding, or of making parties more interested in acquiring shares of those companies. Being a part of this keeps Mr. Cyna deeply involved in the current market and leads to numerous investment opportunities.