Andrew Maguire explores the market forces triggering last Tuesday’s slump in the gold and silver price.

Andrew Maguire explains how last Friday’s release of the non-farm payroll data, allowed insiders to orchestrate yet another “rigged selloff” in the paper markets – and why gold and silver won’t be held down for long. led

The non-farm payroll report

Agent banks capitalised on last Friday’s release of the non-farm payroll report to carry out a “rigged sell-off” in the Gold and Silver Futures markets, according to Andrew Maguire. 

Andrew Maguire reports that the US Federal Reserve receives the economically significant data a few days ahead of the wider release. A few day’s notice that allowed informed agent banks to commence driving gold and silver prices lower as soon as the market opened last Tuesday.

Early Tuesday, the moment the silver price rose slightly to December options sweet spot of $29.245, it was smacked down. As Andrew Maguire reads it, the organised selling event targeted Silver Futures in a bid to drag down the Gold Futures price, while flushing as many specs as possible in the process.

Andrew Maguire, a wholesaler himself, reports that wholesale premiums officially rose going into the release of non-farm payroll data, demonstrating exactly how counterintuitive last Tuesday’s sell-off was.

A carefully calculated sell-off

As Andrew Maguire sees it, these raids were carefully weighed up with a tried and tested formula. Insiders calculated how much short cover could be rinsed from non-delivery specs in the GC and SI, versus the exposure to t+2 deliverable bullion demand in the FX Gold and Silver markets.

If prices drop in the deliverable FX markets, competitive market forces lock in the deeply undervalued physical bullion for physical delivery. As witnessed on the release of non-farm payroll, when wholesale market forces secured tonnes of deliverable bullion at heavily unsustainable FX gold prices. 

However, according to Andrew Maguire, if prices are rigged below equitable supply-demand fundamentals it increasingly tightens up the real bullion available at that price.

What does this mean for gold and silver?

In Andrew Maguire’s opinion, the amount of fiat currency chasing physical gold and silver bullion is tightening up physical bullion supply. In response, the precious metals expert believes the price of gold and silver must rise purely to meet the demand. 

As the precious metals expert sees it, while the massive paper market leverage always has a lagging effect, fundamentals will ultimately drive the chart painted technicals higher.

Andrew Maguire’s parting thought. 

“The consensus sees a minimum price of $32 for silver, up to $35. That’s the minimum level.”

 

This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Analysis


Latest Forex Analysis

Editors’ Picks

EUR/USD holds above 1.17, shrugging off upbeat US consumer confidence

EUR/USD is trading above 1.17, holding its gains despite upbeat US data. The CB Consumer Confidence jumped to 101.8 points, beating estimates. Fed speakers are awaited and the presidential debate is eyed.

EUR/USD News

GBP/USD retreats from highs amid Brexit, coronavirus uncertainty

GBP/USD is retreating from the highs close to 1.29 as concerns about Brexit talks and rising UK coronavirus cases are taking their toll on the pound. 

GBP/USD News

XAU/USD holds steady near multi-day tops, around $1890 region

Gold built on the previous day's goodish bounce from 100-day SMA and edged higher through the first half of the trading action on Tuesday. The overnight sustained move beyond 100-hour SMA was seen as a key trigger for bullish traders and pushed the commodity to multi-day tops.

Gold News

Presidential Debate Preview: Trump may lose due to his own buildup, market implications

The first presidential debate is set to shake up the elections campaign.  President Trump's playing down of challenger Biden's skills may turn into a double-edged sword. Markets will move on implications for a new fiscal relief package. 

Read more

WTI drops to fresh lows near $39.70 ahead of API

Prices of the American benchmark for the sweet light crude oil broke below the $40.00 mark per barrel and slipped back to the $39.70 region on Tuesday.

Oil News

Forex Majors

Cryptocurrencies

Signatures