Non-farm payrolls data sets up gold and silver sell-off
Washington (Sept 11) Agent banks capitalised on last Friday’s release of the non-farm payroll report to carry out a “rigged sell-off” in the Gold and Silver Futures markets, according to Andrew Maguire.
Andrew Maguire reports that the US Federal Reserve receives the economically significant data a few days ahead of the wider release. A few day’s notice that allowed informed agent banks to commence driving gold and silver prices lower as soon as the market opened last Tuesday.
Early Tuesday, the moment the silver price rose slightly to December options sweet spot of $29.245, it was smacked down. As Andrew Maguire reads it, the organised selling event targeted Silver Futures in a bid to drag down the Gold Futures price, while flushing as many specs as possible in the process.
Andrew Maguire, a wholesaler himself, reports that wholesale premiums officially rose going into the release of non-farm payroll data, demonstrating exactly how counterintuitive last Tuesday’s sell-off was.
A carefully calculated sell-off
As Andrew Maguire sees it, these raids were carefully weighed up with a tried and tested formula. Insiders calculated how much short cover could be rinsed from non-delivery specs in the GC and SI, versus the exposure to t+2 deliverable bullion demand in the FX Gold and Silver markets.
If prices drop in the deliverable FX markets, competitive market forces lock in the deeply undervalued physical bullion for physical delivery. As witnessed on the release of non-farm payroll, when wholesale market forces secured tonnes of deliverable bullion at heavily unsustainable FX gold prices.
However, according to Andrew Maguire, if prices are rigged below equitable supply-demand fundamentals it increasingly tightens up the real bullion available at that price.
What does this mean for gold and silver?
In Andrew Maguire’s opinion, the amount of fiat currency chasing physical gold and silver bullion is tightening up physical bullion supply. In response, the precious metals expert believes the price of gold and silver must rise purely to meet the demand.
As the precious metals expert sees it, while the massive paper market leverage always has a lagging effect, fundamentals will ultimately drive the chart painted technicals higher.
Andrew Maguire’s parting thought.
“The consensus sees a minimum price of $32 for silver, up to $35. That’s the minimum level.”
FXstreet
