South African trader is persuaded of central bank intervention against gold

Submitted by cpowell on 03:29AM ET Tuesday, October 11, 2011. Section: Daily Dispatches
11:25a BST Tuesday, October 11, 2011

Dear Friend of GATA and Gold:

Writing for MineWeb, David Levenstein of Lakeshore Trading in Rivonia, South Africa, has been persuaded by the attack on gold amid the Swiss franc's devaluation that central banks are intervening surreptitiously to push the metal's price down. Levenstein writes:

"With regard to the recent selloff in gold, I am absolutely certain that there is a great deal of truth to the commentaries that suggest that this selloff was engineered by central banks and their agents the bullion banks in an attempt to thwart the upward momentum in gold and thus take the spotlight away from the yellow metal.

"In a blatant attempt to drive the price of gold down, some large sell orders came onto the futures market during the time when the market was least liquid. You have to ask the question: Why would anyone sell at the most illiquid times? The seller was obviously determined to move the market in the direction he wanted and was not interested in the least in attempting to liquidate at the best possible price. Then, as the prices of equities, commodities, and most currencies plunged, it appears that certain hedge funds that were taking a beating in their stock positions used the profits made in gold and silver to cover those losses.

------This added to the downward momentum. The cherry on the top of the cake was the action taken by the CME. They hiked the margin for gold by 21 percent and in a falling market. Yet while the S&P plummeted, the CME reduced margins for this contract by 33 percent."-------

Levenstein's commentary is headlined "Politicians, Financial Regulators, Banking Officials, and Gold" and you can find it at MineWeb here:

http://www.mineweb.com/mineweb/view/mineweb/en/page103855?oid=137241&sn=Detail&pid=92730