Market Commentary March 30, 2019

The Trading Daily Market Commentary features a summary of selected market segments as well as economic matters. Its content of interest is made available to all traders and investors at large

The market ended very strong amid a highly awaited Lyft Initial Public offering (IPO) and ongoing trade negotiations with China, and on the heels of Thursday’s session takedown in the Gold supported by a big rally yesterday.

We have observed a single Gold as well as Silver backwardation (the fee paid by a seller of precious metals to the purchaser for the chance of suspending delivery of purchased precious metals) as we begin a brand-new era where leaders will demand a higher Gold price.

Hereabouts were ordered interventions in the Gold, this being the last week of the month and first quarter. So why this week? Friday was the trading day when the BIS (Bank for International Settlements) Gold derivative trading stakes must be settled marked-to-market,

With Gold bursting out into the middle $1320’s price on the Comex exchange options expiry on Tuesday session and the converging Over-The-Counter Mark-to-Market. The so-called Sweet-Spot for officials price closer to $1303 per oz, the Bank for International Settlements moved in to tackle Yellow metal price lower into Friday’s more significant "Over the Counter Opex" expiry, and the paper trail validates this.

The Bank for International Settlements operates a ledger of accumulated derivative plays which are conservatively estimated to be over one Trillion Dollars - each single Bank for International Settlements, keeps Mark-to-Market and Over-the-Counter options expiry data, whenever the metal spot price is over the option expiry Sweet-Spot. We do see the proof of these visible official footsteps appear in bright daylight.

Friday’s conclusion of the officially sanctioned Bank for International Settlements arranged sell-off helped the Bank for International Settlements extremely well in shaving the price back within its Sweet-Spot, and it has likewise profited the insider major bullion banks who came on for the highly lucrative ride. Nevertheless, this happens at a price, a physical metal price.

Market Makers And Gold Backwardation

Market makers dumped more than 5.5 Million ounces of paper Gold - April Gold contracts dropped disruptively into a rollover month, speculators are currently being conditioned to be bearish on Gold, and adding more paper to short positions. 

As a consequence, June Gold contract has gone into an obscure technical backwardation to cash, providing insider traders and officials a unique risk-free $5 plus per ounce arbitrage trade profit. That represents a lot of ounces they've made a hefty profit on, and silly short speculators are now holding the bag as the market makers go long fronting them and accumulate physical Gold in the process.

In Conclusion

More importantly, let’s not overlook the fact that we are enrolling into a new era where officials will demand a much higher Gold price in the very near future. 

Trade Of The Day

If you studied our Gold chart since the mid of last year and observed Gold trading session on Friday - we will be entering the long trade at $1280, and we will be where we want to be for a ride.


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