About $GLD sell-off

The headline story Wednesday was the sharp decline in gold (-3.3%) and other precious metals. This was the result of the Shanghai Gold Exchange raising margin’s the second time this month Tuesday late, the impending options expiration on the COMEX Thursday which generally leads to chaos, a much overbought market and, let’s face it, Bernanke doesn’t want continually rising gold prices to embarrass him Friday. (BREAKING NEWS: After the close the CME raised gold margins by 27%! This must have been leaked to other exchange members. Options traders at the COMEX will feast on this and this is another reason markets are broken and corrupt.)

I’m pretty disgusted with the CME and it’s brethren at the COMEX.  This is a criminal bunch. When you decide to raise margins again on gold the day before options expiration you’ll create maximum impact. Those making these decisions also have contacts with the floor traders if not their own accounts. This was a well-placed smackdown of gold and with this increase in margin requirements after the markets closed; you can expect more damage Thursday. What a manipulation spectacle. It’s quite clear Bernanke and the TPTB don’t like gold and the measure these high prices are sending toward official policies. Doing what they can to drive these prices lower is what they want.

The markets are broken. -D. Fray