Monday, July 27, 2015

Andrew Maguire – A Gold And Silver Tsunami Is Forming As The Shorts Are Now Going To Get Destroyed

"Today whistleblower and London metals trader Andrew Maguire warned King World News that a gold and silver tsunami is forming as the shorts are now going to get destroyed.
On the heels of the historic trading action in gold and silver, Andrew Maguire is giving KWN readers around the world access to his Weekly Commentary that has just been released to his subscribers.
July 25 – (King World News) – I will start this week’s commentary with a summary of the week’s extraordinary action and defer catching up on some exceptionally good member questions to early next week. During the week, in our live sessions, we have looked in granular detail at the footprints that lead into and out of the gold raid that commenced in the early hours of Monday morning and how China was going to be falsely blamed for the selloff (which it subsequently was), yet an analysis of the footprints leads directly to the BIS (Bank for International Settlements) desk….

I draw this conclusion because, unusually, the selloff commenced in the OTC (over-the-counter) FX gold market, which concurrently picked up in the Comex tripping off market halts just before China sold. What is missed by all the commentary out there is that while the Comex was halted, the OTC markets continued to operate unencumbered.
BIS / Insider Activity Ramps Up In Gold And Silver Markets
I have provided analysis of this insider favored setup in prior commentaries, illustrating how this puts US-centric traders at a distinct disadvantage to the BB's (Bullion Banks) /BIS and all other global players who can continue to trade/hedge in the spot markets in any size while the futures and options markets are frozen. The concurrent OTC (over-the-counter) FX Gold action around these market halts were not picked up by any commentator/analyst and strongly point to BIS/Insider LBMA Bullion Bank activity.
We are quite used to thin market raids, sometimes suggesting official and other times the usual suspect Eastern European outfit operating in the COMEX market, (which I have reported to the CFTC as likely having an association with at least one market-making LBMA Bullion Bank), but this raid was extraordinary in several respects. Never before have we evidenced a permanently & deeply backwardated futures market print a flash $7.37 PREMIUM to the much larger physically related unallocated spot OTC markets. Also, one only has to look at the tiny GCQ5 (August Gold Futures Contract) volume it required to take gold down a full $50. Only some 7,500 lots traded in the Open Interest exchange BUT 1⁄2 of these flash orders were buys.
Quite clearly, the OTC markets were utilized to bridge through the CME market halts and ensure that the highly visible targeted longstanding multi-year Comex long stops were cleaned out. Immediately after the flash order, the spot markets reverted to trading back at a premium to not just front month August futures but between 50-90c premiums to December. These premiums are now embedded and deepened and UN-ARBITRAGED into Friday. This is a bullish condition not seen since the lows of 2008, in fact, far more so than at any time in memory. Vend in the historic naked short spec position with COT’s (Commercial Traders) 1/1 on the long side of this deeply oversold structural imbalance and all there is left to propel gold lower is the residual chart-painted historic bearish sentiment.
This is not enough in the face of unseasonable physical market bargain hunting ignited in the Middle East, China, and India. This is evident in the UNLEVERAGED physical markets, which have a lagging effect but, as in every synthetically driven market bottom, will backwash against the LEVERAGED paper market. This is imminent and could have occurred on Friday.
Historic Short Squeeze Now At Hand
SI (Silver Futures Contract) had not cooperated with GC (Gold Contract) driven selling and was holding up well throughout the week. In fact, it had closed its small gap within hours on Monday, exceeded it and then refused to stay down. This made it difficult for GC (Gold Contract) shorts to maintain traction and, with such deeply oversold conditions, risked a loss of momentum and the danger of a reversal. Given that momo’s /speculators have used profits to fund fresh short lots, this places heavily margined short stops at very low vulnerable levels, exposing a series of gaps.
On Friday, SI (Silver Futures Contract) was targeted by algorithms forcing a final capitulative flush to clean out residual multiyear long stops below Mondays $1,080 GC (Gold Contract) low and very strong $14.50 SI (Silver Futures Contract) support. It looked to me like the final flush and most certainly a massive bargain picked up in large tonnage size in both silver and gold on our physical wholesale platforms. ABX, (Allocated Bullion Exchange) is not officially launched yet but we are already picking up good size wholesale demand ahead of the official launch, especially in silver 100oz bars.
To sum up, by early Friday afternoon, with GC (Gold Contract) being continually capped at the 1080 level, the following unedited post before the Friday ramp pretty much sums up the week's capitulative action. Note the unprecedented backwardations that clearly evidence the LBMA is on its heels.
My Friday 2.29pm BST Note To Subscribers: 
“Cobasis and backwardations are at extremes. December futures are now oscillating between at an unprecedented UN-ARBITRAGED 55c to 90c. Premium to cash unallocated gold, much higher to allocated, furthermore the December low was $3.17 below the cash market low. There is zero doubt COT’s are covering into all capitulations and taking 100% of the long side of all short sales. Also OI has shrunk by 22,600 lots Friday through Wednesday lots despite large size fresh spec short additions. We have seen nothing like this since 2008 capitulation point.
BB’s will commence the rinse once bubble territory spec shorting wanes. Already seeing large wholesale restocking related to Middle Eastern through India and China demand plus sovereigns soaking up all GLD and ETF redemptions. Unleveraged physical has a lagging effect on leveraged futures selling but in these unprecedented conditions the PM’s are so close to a bottom the risk is to the shorts. VERY close to bubble-like capitulation, if not already achieved. Note COMEX silver and gold additions while ETF’s capitulate into sovereign hands. China is surreptitiously accumulating reserves.”
Options sweet spots are also evidencing COT bullish footprints. As noted this week, the put selling appears to be largely in the hands of spec and Managed Money sellers. This places market making COT’s (Commercial Traders) on the long side of these bets. This is an inverse situation to longs selling calls and protecting these strikes, (from a close above). As of Friday, the GC (Gold Contract) sweet spot was still around $1,150 and SI (Silver Contract at $15.50, so interesting opex structures into Tuesday.
Increased Bullion Bank And MSM Gold Bashing As PM Markets Ready To Turn
The evidence is all there and goes directly against the Bullion Bank and Mainstream Media calls for lower and lower prices, (yes you, Jeff Currie, and the usual crew), just as they did at every capitulative bottom. Painting bearish sentiment is the last phase of a centrally planned rigged selloff. The COT’s are BUYERS. However, by driving sentiment down to the lowest at any point in history, they have managed to trick many dip buyers to stand aside waiting for the all-hallowed $700-$1000 levels. Trying to bottom-fish with risk reward, clearly favoring the upside is, IMO, just how $9 silver and $700 gold was missed in 2008 while the usual sirens called for $250 gold and $5 silver back then, while they were rinsing out clients'/muppets' pockets.
Once price rebounds, these side-line buyers will get on-board fearing missing the rally but it will be some $100-$150 higher and given the Open Interest structure and well-placed commercials, only then will Commercial Traders seek to hedge against them. This wash-and-rinse structure only differs by the scale of the extended short Open Interest in weak hands. The polar opposite of when naked spec longs were pushing $49 silver and $1,900 Gold and discussed two weeks ago, SI (Silver Futures Contract) had reached a point some 50,000 lots of spec Open Interest further extended, (7,700 tonnes!) than it was at the naked long $49 highs..."

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