The 89% solution

Bill,
The Bernanke call, aka 1% solution was swiftly implemented once more this morning. Gold was "running wild" when all of a sudden it got hit right after the Comex open bringing it back down to a 1% gain. One of the most astounding facts regarding gold manipulation is the near-certain probability of an early Comex open selloff. In the first 53 trading days of 2011 an amazing 47 of those days, or 88.7% have had a sharp, sudden plunge. This is totally insane. Any rum-dum trader can basically sell Comex gold or silver short around 8:00 am, cover later in the morning- and succeed NINETY PERCENT of the time. It's as if they have incentivized (subsidized?) the morning pile-on. "We'll guaran-damn-tee you a profit if you'll just sell gold short on the Comex open!"

There are computer algorithm programs set to run the entire Comex session. They methodically paint the tape, while all along probing and picking off stops. Dampening early morning enthusiasm is crucial in dissuading Red Bull-drinking hedge funds from looking for long side action in the gold arena. Better sending them off to wheat or sugar, where 7% daily moves are possible, and little-noticed by the masses. What the hell's the fun of a 1% daily limit move? Wall Street adrenalin junkies need a bigger fix.

Crimex to rum-dums, can you find the sell zones?

Writing for the Daily Reckoning today, newsletter editor Greg Canavan explains what he calls "Gold Price Management 101." Canavan writes: "If you think the gold price is not 'managed' by central banks, then you're really not looking hard enough. The management scheme has certainly become very sophisticated via the use of massive amounts of derivatives, which is essentially paper gold. If you couldn't be bothered trying to work out what's really going on (and let's face it, not many have the time or inclination), just google the London Gold Pool." Canavan goes on to recount that historic bit of gold price suppression. His essay can be found at the Daily Reckoning here: