This is where the Fiat Paper and the Physical Market clash and the manipulation of Gold stops working...and the price of Gold explodes upward. The biggest fear a shorter has, is that physical demand will cause a mismatch and there won't be enough physical to sell. The COMEX only has $500 mio registered gold available for delivery....impossible to deliver $27 bn!

It all happened right at the opening of Financial Markets in China. About 7,000 gold futures contracts, representing about 21.8 tonnes of paper gold ($ 27 bn), were dumped at market in one minute flash crashing the price down to $1,080. A similar operation happened in Silver. Several thousand contracts were bought back in the following two minutes. This is the 3rd time that the COMEX market is disturbed by furious algorithmic gold selling braking the gold futures market for at least 10 seconds. September 12, 2013: Vicious Gold Slamdown Breaks Gold Market For 20 Seconds,  and October 11, 2013: "Stop Logic" Gold Slam Was So Furious It Shut Down CME Trading Again. And January 6, 2014: Gold Flash Crashes, Halts Trading As "Velocity Logic" Circuit Breakers Triggered. Last time the Trader was fined $200,000. A ridiculous amount compared to the losses such a manipulation causes. To add insult to injury no identities were revealed...

The cause of the action...a dead paper cat bounce.?..we'll probably never know for sure. Could be High Frequency Trading, could be Citi or JPMorgan, could be the Bank for International Settlements, could be the Chinese trying to buy more physical Gold at lower prices...or could simply be DESPERATION of somebody sitting on a large Short position and who is unable to deliver. It surely NOT is a normal operation like some sources like to pretend !

So far for the Fiat Paper side of the happening. On the Physical side however we note a growing number of buyers.

• Gold transfers in Switzerland are 10% higher than last year (center of physical trade)
• COT (commitment of traders) shows open interest for Gold has increased for the seventh week in a row.
• Chinese Gold withdrawals for the week ending July 10^th were the 8^th highest ever (62 tonnes). As a matter of fact Chinese Gold reserves are at a record high and higher than these of the USA.
• Both Silver and Gold are in Backwardation.

Last but not least, note the action happened without important VOLUME and with little follow through...and it surely scared off many Gold investors. Especially those who still don't understand why one must have Physical Gold/Silver and keep using the Barometer of Worthless Fiat Money and the Gold Paper money to value their assets.

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