From Midas (just in case anyone is interested on why Gold dropped recently)

Hard as it is to believe, The Gold Cartel has stooped to a new low in terms of their blatant manipulation of the gold and silver markets.

Gold was trading quietly last evening when the price collapsed, going straight down in a blink. It then flatlined until the Comex opened and then did the exact same thing yet again: straight down for about the same drop amount.

What could account for such consecutive and strikingly similar collapses? NOTHING except the cabal’s price suppression. The DOW was due 100 lower again this morning based on various swine flu/banking concerns. If anything, both should have been gold friendly. The dollar must be soaring? Nope, it was lower. Perhaps it was a planted IMF story again to get the gold price down? Nope, if anything the extremely bullish Chinese gold buying news is still reverberating.

Oh, here is the reason. From a fellow Café member:

CNBC

“An analyst from a major bank said people are selling gold because they want to raise cash”….makes a lotta sense to me!
RL

***

More on the latest shenanigans from Café members this morning…

“And, by the way, another new dirty trick atop the smash at exactly 8:20 am. Never seen this before, but at about 8 pm EST last night, out of nowhere gold fell $10 in seconds. Not minutes, seconds.”
A

So, at 8 o’clock last night many Americans decided to raise cash, and at exactly the same time decided to sell gold … and then repeated their efforts at exactly the same time this morning. You want to talk about laughable!

The way it is…

“Gold bashing is now standard operating procedure and has never been more blatant. The news must be substantially worse for this to be happening now. I guess China may accelerate their buying program further and the swine flu is being used an excuse for the mkt to sell off when realistically, the economy stinks, earnings are falling, banks-Bernanke-Paulson-Geithner are outright liars defending only their own interests.”
T

I have used this analogy before and it has never been more appropriate than today. Over 500 years ago many people in the world believed the earth was flat. All these years later it seems a bit silly with what we know now. Those in the gold/investment industry who don’t deal with the gold price suppression scheme, and what it all means, are no different than the flat-earthers were a long time ago. As years go by, they will be judged as just as silly.

What is so important to keep in mind (the usual) is that the price tanking is a FORCED one that will not stand for too long, just like so many other attacks … which is why the price of gold has gone up 9 years in a row. For those who have cash to put to work, now is the time to step up to the plate, not run for the hills.

You can count on one thing for sure. The Chinese aren’t running for the hills. They have to be saying, “Thank you very much.”

This one is right up our alley and also supports my notion that the Chinese have accumulated more gold than they have let on…

J.S. Kim: Central banks are full of disinformation on gold

Submitted by cpowell on 05:53AM ET Tuesday, April 28, 2009. Section: Daily Dispatches

8:48a ET Tuesday, April 28, 2009

Dear Friend of GATA and Gold:

In commentary posted today at Seeking Alpha, market analyst J.S. Kim, editor of the SmartKnowledgeU investment letter, notes the disinformation distributed about gold by central banks. Kim speculates that China’s announcement last week that it has accumulated 1,054 tonnes of gold reserves is disinformation too — that China actually has accumulated much more gold than that. Kim’s commentary is headlined “World Gold Markets: How Lack of Transparency Translates into Poor Analysis” and you can find it at Seeking Alpha here:

seekingalpha.com/article/133504-worl...
lack-of-transparency-translates-into...

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

For The Gold Cartel to go all out like they did today must mean what is coming down the pike is very negative for US financial markets. This would be Standard Operating Procedure for these low-lifes. Perhaps the Orwellians are petrified of fallout from the “stress tests” results next week. As you know, our sources say once the fine print is gone through, private equity needed to further capitalize “more” than a number of the banks won’t be anywhere to be found.

Perhaps they know the US Treasury market is in the deepest of trouble. The yield on the 10 yr T note, after a brief and sharp dip, rose sharply, back to 3.02% this afternoon and is very close to a breakout level. Simultaneously, the yield on the one month T bill is back down to .02%. The Fed and Treasury have done a lot of huffing and puffing … to achieve what? The smart money knows that cheap US money is leading to inevitable inflation in our country.

Makes sense the Fed and Treasury would order a hit on gold with our Treasury markets in precarious condition. After all, Larry S, the man in charge these days, wrote the definitive paper on the relationship between gold and interest rates in his “Gibson’s Paradox and The Gold Standard.”

Once again we see how the more bullish news is for gold … in this case the China gold buying revelations … the more The Gold Cartel makes their move to counteract its significance. That could be it too … most likely this raid is the result of a combination of all those reasons.

I queried Dave from Denver with…

Can the Gold Cartel be petrified of the bond market? 3% again?

He came back with…

I think fear of the bond market may be one factor in the latest metals smash. But the bond market is getting hammered because of the all the supply - 5 yr. bond auction, 7 yr tomorrow, BUT the Treasury is announcing their May refunding package tomorrow and it will probably be bigger than expected given the precipitous decline in tax revenues (NYC reported April tax revs. down 55% vs. last April).

My bigger bet is that this latest smash is complete fear of the physical market. Silver is still in 5 cent backwardation between spot and May, when they should be trading a parity given 1st notice for May silver is Friday. Also, I mentioned to you that we were contacted by our futures broker, RJ O’Brien, yesterday asking us if we were going to take delivery on our May silver position, which is already funded. That is the first time they’ve ever called us ahead of 1st Notice to see what we were doing. Given the big drawdown in Comex silver, 573k ounces yesterday mostly from the “eligible” category which tells me that people safekeeping their silver at Comex wanted to take custody, I find it a bit suspicious that we were being “felt up” by the Comex to see what our intent with May silver was.

This latest paper attack has Larry Summers’ footprints all over it, especially given that silver had run up over a buck in a week and was very overbought technically AND this is the final week where specs will be unloading May contracts if they don’t intend to take delivery. Perfect set-up for Summers to order a paper attack, which started early Monday with paper smacks at Hong Kong close, a.m. London Fix and Comex open - a hat trick, as I can’t recall them every smashing the paper market at all three favorite attack times in one night. We’ve been adding AGQ all the way down on this pullback in our fund, because that position will be a home run by the end of May or June, given that it’s 2x the return on silver.

***

Bizarro world! Last night, following the gold raid, the market went comatose and barely traded. Same thing happened again this morning. No free market trades like that.

The good news for the day is that gold held PIVOTAL support right above $880 and moved convincingly away from that level, closing well off its lows.