Recently, Turd Ferguson noticed a pattern where gold would get smacked down in each delivery month. Today, he expounded on what he thinks is happening - since it seems to be happening again, right on schedule. As has been pointed out recently, GOFO rates are negative and inventories at the Comex are low, all as we hear about ravenous demand for the physical stuff.
So, the theory goes like this...
The takedowns around this time are intentional. The bullion banks put on big naked shorts to drive the price down. Simultaneously, as Authorized Participants, the bullion banks are able to make withdrawals of actual metal from GLD (the gold ETF) timed to coincide with the heavy selling, thereby enabling them to make good on delivery to contract holders who want to take possession.
I don't know if that's true, and there are plenty of guys who I respect who say that it isn't. Still, even if it is, this too shall pass. The fundamental story to drive gold higher is very compelling. What's working against it is just the chart and crowd psychology.
