Ed Steer has often remarked, as he did again today, as well as several days ago, that when the bullion banks pull their bids, the price heads south in a hurry as tech and other funds sell their longs as sell stops are triggered, etc.
For example, he wrote today, "and less than half an hour before the Comex close...a short seller entered the market, or JPMorgan et al pulled their bids...and the price was down over ten dollars in five minutes."
Several days ago he wrote, "Then the U.S. bullion banks pulled their bids…and that, as they say, was that. The gold price 'fell' more the $15 in less than thirty minutes…with the low of the day coming at precisely 11:30 a.m. Eastern."
and then, "By the time that London closed at 11:00 a.m. Eastern, silver was down about seventy cents from its high…and that's when JPMorgan et al pulled their bids…and silver was down another dollar in thirty minutes.
I have often wondered if Mr. Steer means this literally. I wonder why the bullion banks are in there bidding in the first place, in effect keeping a floor under the price. I thought the bullion banks wanted the gold and silver prices down.
If the bullion banks are indeed bidding to such an extent that by pulling them they can cause the gold/silver price to drop substantially, then they indeed are in control of the market big time. Who would want to play that game? It would be like playing craps against some guys who use loaded dice anytime they choose, whether or not you see them using them, since they also happens to be the house.
And aren't there other heavyweight bidders in there supporting the market? No other big funds, no sovereign funds, deep pockets, you, me?
Shouldn't the bullion banks be placing sell orders instead, especially when prices are high? They certainly can't be in there bidding to cover shorts, since if they are, and they pull enough of them, the price drops further in their favor. So why bid in the first place? Wouldn't they simply hit the ask when the price was right?
I emailed Mr. Steer quite some time ago with my questions about this, but it's been more than enough time for a response, if one was coming. Just wondering.
