Sprott portfolio manager is suspicious of last week's flash crash in monetary metals

Section:

12:35a Thursday, April 4, 2019

Dear Friend of GATA and Gold:

In commentary posted at King World News, Sprott USA Senior Portfolio Manager Trey Reik can't help wondering if last week's flash crash in the monetary metals was not the product of ordinary market action but that of one or more big players trying to rig prices down for first-quarter valuation purposes.

Reik writes: "The tenor for precious metals markets heading into March month-end may have been set on Thursday morning, March 27. At 9:37 a.m. 7,000 Comex gold contracts were sold at-the-market in the space of one minute. This means that 700,000 ounces (or 21.77 tonnes) with a notional value of $921 million was dropped into Comex (electronic) pits without price limitation. While spot gold did decline roughly $7 during the 'flash crash,' it finished the day in orderly trading above $1,300 (at $1,309.57).

... Dispatch continues below ...



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"Perhaps in recognition that a far more concerted effort would be required to achieve a month-end mark below $1,300, volume in Comex gold futures on Friday, March 28, exploded to 528,626 contracts, or roughly $69 billion in notional value. For context, the World Gold Council reports that average daily trading volume for Comex gold futures totaled just $28 billion in February 2019 and $36 billion year to date in 2019. Related to the massive March 28 trading volume was an outstanding-interest drop of 48,565 (9.62 percent) for the day, almost all of which was related to a 93.3 percent collapse in remaining April (front month) outstanding interest. That such a large percentage of remaining April open interest was liquidated without traditional roll into June contracts only heightens the pointed nature of trading last week."

Reik's analysis is headlined "Trey Reik Asks WTF Is Going On At the Comex?" and it's posted at KWN here:

https://kingworldnews.com/trey-reik-asks-wtf-is-going-on-at-the-comex/

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

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