Examination of the facts show that last Friday’s action in gold, silver, and platinum was designed to flush out weak holders of paper contracts. This was for the benefit of establishment players in Comex’s swaps category, who being desperately short are losing huge sums on mark-to-market valuations. This is illustrated in the following chart for gold:
Gold and silver’s flash crash
The expiry of February Comex futures was the opportunity for beleaguered shorts to square their books. Almost certainly, it was a one-off scare, because nothing else has changed.
