Casey Research's Bud Conrad: Gold crash likely deliberately engineered
Bud Conrad, chief economist for Casey Research, writes today that the recent plunge in gold prices seems to have been engineered by a single large participant in the market.
Conrad writes: "We don't have the name of the entity that did this. However, the way the gold was sold all at once suggests that the goal was not to get the best price. An investor with a position of this size should have been smart enough to use sensible trading tactics, issuing much smaller sell orders over a period of time. This would avoid swamping the market; and some of the orders would be filled at higher prices and thus generate more profit. Placing a sell order big enough to affect the overall market price suggests that someone with powerful backing wanted to drive the price of gold down.
"Such an entity could have been a large speculator who already had a sizable short position and could gain by unloading some of its short position once the market momentum had driven the price even yet lower. Or it could be a central bank -- one that might be happy to have the gold price move lower, as it would provide cover for its printing of more new money.
"Of course, it could be some entity that owned long contracts and wanted to get out of the position all at once.
"We don't know, but this kind of activity, resulting in the biggest drop in 30 years, raises more than just suspicion when we consider how important the price of gold is to many markets around the globe.
"Can markets really be influenced by big players? Well, was the LIBOR rate accurately reported by huge banks? Have players ever tried to corner markets? The answer to all the above, unfortunately, is yes."
Conrad's commentary is headlined "Gold Crash 2013 -- Deliberately Engineered?" and it's posted at Casey Research here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
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