Or Market Manipulation?
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May 2017, Volume 23 Issue 5 Liberty Coin Service’s Monthly Review of Precious Metals and Numismatics May 3, 2017 Gold & Silver Prices Drop Over Past 2 Weeks: Market Trend— Or Market Manipulation? After the April 6 US military mis- 2017 Year To Date Results Russia Ruble -6.9% sile attack on an airport in Syria and Through May 2, 2017 Taiwan Dollar -7.4% the April 13 detonation of the Mexico Peso -9.6% Precious Metals “mother of all bombs” on a Taliban U.S. Dollar Index 98.99 -3.2% Palladium +19.9% target in Afghanistan, people held Gold +9.1% US And World Stock Market Indices their breaths to see if American forces Silver +5.7% NASDAQ +13.2% Platinum +2.8% Sao Paulo Bovespa +10.8% would also become engaged against the government of North Korea. Numismatics Dow Jones World (excluding US) +10.3% US MS-63 $20 St Gaudens +6.0% Frankfurt Xetra DAX +8.9% When political and economic uncer- S&P 500 +6.8% tainty is heightened, investors tend to US MS-63 $20 Liberty +1.1% US MS-65 Morgan Dollar, Pre-1921 -2.8% Dow Jones Industrial Average +6.0% reallocate their assets toward those Australia S&P/ASX 200 +5.0% that are considered “safe havens.” US Dollar vs Foreign Currencies Nikkei 225 +4.4% Gold and silver have thousands of Canada Dollar +2.0% Russell 2000 +3.1% Philippines Peso +1.0% London FT 100 +1.5% years of track records serving as pop- Hong Kong Dollar +0.3% Shanghai Composite +1.3% ular safe haven assets. New Zealand Dollar -0.2% When you own and have direct cus- Chile Peso -0.3% 10 Year US Treasury Note interest rate 2.296% -6.1% tody of physical precious metals you China Yuan -0.8% are not dependent on any laws, Indonesia Rupiah -1.7% Energy and Other Metals Colombia Peso -2.1% Cobalt +66.7% changes in laws, or the full faith and South Africa Rand -2.5% Lead +13.4% credit of any government or third par- Switzerland Franc -2.7% Aluminum +11.3% ty. The precious metals are valuable Brazil Real -3.2% Copper +4.5% assets in and of themselves. They are Peru New Sol -3.2% Zinc +3.0% not claims against the liabilities of an- Sweden Krona -3.4% Molybdenum +0.0% Malaysia Ringgit -3.7% Tin -4.7% other party who may default. Denmark Krone -3.7% Nickel -5.3% As you can see on page four in the Argentina Peso -3.7% Crude Oil, Brent -9.4% daily COMEX closes over the past Singapore Dollar -3.7% Natural gas, Henry Hub -15.5% four weeks, on April 13 gold and sil- Euro -3.8% ver prices reached their highest levels Thailand Baht -3.8% Metal Content Value Of U.S. Coins Japan Yen -4.3% Lincoln cent, 1959-1982 1.74¢ since early November 2016. Australia Dollar -4.4% Lincoln cent, 1982-date 0.68¢ The prices of gold and silver were Great Britain Pound -4.6% Jefferson nickel, non-silver 3.34¢ on the verge of topping their 200-day India Rupee -5.7% Roosevelt dime, 1965-date 1.52¢ moving averages, which would have Israel Shekel -6.2% Washington quarter, 1965-date 3.79¢ sent a signal to technical traders that South Korea Won -6.5% Kennedy half dollar, 1971-date 7.58¢ it was time to start buying this metals. All that would be needed to spark this hours. tively sudden price declines over the past higher demand would be for gold to Both prices have fallen further since. two weeks reflect actual free market breech the $1,291 and silver the From their mid-April peaks, the closing trends or are evidence of deliberate price $18.50 level for three consecutive COMEX prices today were 3.5% lower suppression. From watching these mar- trading days. for gold and down 11.1% for silver. This kets for several decades, I think it is al- Had these price levels been topped, kind of price volatility can intimidate po- most certain that there has been massive the prospects for much higher prices tential investors from choosing to own price manipulation and suppression activ- in rapid succession were a possibility. such assets. ities conducted by the primary benefi- This never happened. Silver topped The question now is whether the rela- $18.50 at the COMEX close on April 14, stalled, then fell sharply two trad- Inside this issue: California State Govt Owes $1Trillion page 2 ing days later on April 18. Gold did What Are The Feds Up To? page 3 close above $1,291.75 on April 18, US Mint 2017 Bullion Sales Plummet page 4 then dropped about $10 within 24 (Continued from page 1) In contrast, if you are trying to sell a large Patrick A. Heller’s Upcoming Speeches ciary of lower precious metals pric- position for the lowest possible price, which and Appearances es—the US government. no profit-seeking investor or company would In addition to serving as money, want to do, you would dump large quantities August 3 or 4, 2017, Denver Colorado (tentative) “Create Fun-Filled Numis- gold and silver are also effectively of contracts in a single market in a very short matic Presentations For The General report cards on the strength and sta- time period, usually from a few minutes to Public” American Numismatic Associa- bility of the US economy, US gov- no longer than one hour. They are even tion World’s Fair of Money, Money ernment, and US dollar. If people more effective if the selling can be done dur- Talks Program at the Colorado Conven- lose faith in the American govern- ing thin trading times, such as just before or tion Center, 700 14th Street. Date, time, ment, the dollar tends to lose value, during holiday weekends. and location to be determined. For more resulting in higher gold and silver That is exactly the selling pattern that oc- information go to https:// prices. curred in mid-April. Several markets were www.money.org/worldsfairofmoney. How could such price suppression closed on April 14 for Good Friday, then For more information on any event or to be accomplished? By a variety of most European markets were closed on April arrange for a presentation at schools, activities conducted either by use of 17 for Easter Monday. senior citizen groups, Scout organiza- assets in the US Exchange Stabiliza- Another tell-tale sign of market manipula- tions, fraternal or business organiza- tions Fund (which is explicitly au- tion is that the price of silver is clobbered tions, call 800-933-4720 or email thorized for use to secretly manipu- first. As this pattern has regularly occurred [email protected]. late gold prices), through the US over the past couple of decades, other traders government’s primary trading part- realize than once silver’s price drops signifi- date. However, the day or reckoning ners, or with the cooperation of al- cantly, gold will soon follow. They then ad- may be coming sometime around the lied central banks—and probably all just their trading postures, which magnifies beginning of August at the latest. three. the size of the price declines. Since commodity contracts on the From the quantities of contracts traded in State And Local Govern- New York COMEX and in the Lon- the London and New York markets, it looks ment Balance Sheets To Im- don Bullion Market Association like about one billion dollars of paper gold plode Starting About The rarely involve delivery of physical was sold short for each dollar decline in the Beginning Of August metal, it is not that difficult to sell price of gold. From April 18 to today, that Unless something else comes up short in those markets a large quan- would indicate the utilization of about $45 sooner to push up precious metals pric- tity of paper contracts in a brief time billion to suppress gold’s price. es, I expect it has a high possibility of to force down prices. This has hap- As for silver, price suppression efforts happening when state and local gov- pened repeatedly over the decades were well underway weeks before April ernments across America that have fis- since the US government closed the started. For the past couple of months the cal years ending June 30 start disclos- gold exchange window in August size of the open interest on the COMEX has ing that they are insolvent and possibly 1971. been larger than at any time before 2016. bankrupt. That is about when they will Normally when a party has a large More than 250 million ounces of silver be releasing their June 30, 2017 bal- position to sell, they want to realize were sold short in an effort to hold down sil- ance sheets where, for the first time ev- the maximum possible selling price. ver from rising further. New records for to- er, they will be required to post the net To accomplish this, such sales are tal open interest were being set almost daily. present value of unfunded liabilities for normally divided secretly among By April 13, the COMEX silver market has employee pensions and retiree health multiple brokers trading in different almost 1.19 billion ounces of open positions, care benefits. markets around the globe and even whereas before 2016 the open position never Why do I think this could alter the fi- spread over multiple days. The exceeded 900 million ounces. nancial landscape so dramatically? It Swiss National Bank used this tactic Even today, with the massive closing of is because the amounts are huge.