Exclusive post: gold market is changing as bullion banks are losing control

For years, gold traders could short the yellow metal during London and New York trading hours, and then go long the "barbaric relic" during Asian overnight trading hours--and come away with a nice profit for a day's work.  The logic was the anti-gold cartel at the LBMA and COMEX would surreptitiously suppress gold prices, usually using events like unemployment or housing data to time their bear raids.  However, Asians would bid gold prices up when their markets opened, as demand for physical gold was more than happy to buy the shiny metal at discounted prices.  There have been numerous studies to support this theory, some using statistics to prove these average daily pricing movements were anything but arbitrary.

Whether one believes in the anti-gold conspiracy or not, charting the price movements would have at least raised an eyebrow or two even for the most skeptical among us.  Given the lawsuits against JPMorgan Chase and HSBC for manipulating silver prices, the precious metals conspiracy theories are starting to gain traction.

That aside, I've started to notice a shift in the daily price movements in gold.  Sure, the price takedowns in New York trading still occur with far too much regularity, but lately the volatile price movements during COMEX trading are just as likely to be soaring during trading sessions.  This tells me the perma-short anti-gold bullion banks are starting to lose control.  In fact, according to Commitment of Traders (COT) data, these too-big-to-fail bullion banks have lightened up on their naked short positions, possibly due to ongoing investigations into the murky world of futures exchanges.

Between London, New York, and Asian trading of gold, $100 daily price movements are no longer rare.  Buyers of gold and silver in Asia have been bullish on these monetary metals for years.  What will break the grip of the anti-gold central banking and commercial banking cartel will be the flight to safety trade by institutional and sovereign wealth funds.  In fact, after years of central banks dumping gold into markets in order to suppress prices, 2009 was a turning point as central bankers became net buyers of gold, not net sellers.  That flow was reinforced in 2010 and is accelerating this year.

The take away message is even central banks of developed and emerging markets distrust Federal Reserve Notes (i.e. the USDollars) and are fleeing to the safety haven of gold.  Government leaders in Russia, China, Brazil, and other emerging countries are openly declaring their distrust of the Fed and US Treasury's printing press.  What used to be labelled conspiracy theory is now playing out in the trading pits of global exchanges.  Gold prices aren't necessarily rising:  paper currencies are collapsing.