How the COMEX Gold Price is Rigged

Posted by Schwabe on November 23, 2008

Bob Champan, a former military analyst who went on to establish one of the largest gold & silver brokerage firms in the world, is an inside source on hard hitting gold information.

A summary of Chapman's latest gold bullion analysis is featured in the discussion above. It was during his appearance on the Friday, November 21 edition of the Alex Jones Radio Show. This video, which I prepared for Gold Bullion Insider readers, cuts right to the chase on the topic of gold, and gold only. In addition, I've summarized for you the key points below.

Alex Jones kicks off the discussion by summarizing the week's market activity in gold: that the spot price of gold has shot up over $100 in the last week as much as $56 in one day.

Chapman says, "Gold & silver have bottomed out." And that this deleveraging and liquidation phase has helped everything, including the US dollar - but it has hurt gold & silver. Yet it will not continue for much longer.

Platinum & palladium he says, will stay down until the car manufacturing industry picks back up. And looking at the big picture, he says "That won't happen for a long time."

Chapman believes that the gold & silver prices will continue to idle at these low prices and probably won't shoot up until after another two or three weeks. Yet he does acknowledge the significance of a one day $56 dollar spike and points out that perhaps the breakout of gold is starting right now. For the most part however, he concludes that the latest move in the gold price is a pre-emptive shake.

Finally gold has broken out over $750. And according to Chapman, "the US government has been pounding it and trying to keep it down.  They have lost this particular battle. " He goes on to predict that after a few weeks of head fakes,"Next stop is probably around $850... and then to  $950. And then a shot at the former high."

Chapman points out the huge difference in gold bullion and gold paper prices. "There is a tremendous dichotomy between the physical market and the futures market.  The physical market is red hot." Apparently, even the mints cannot keep up with production.

COMEX becomes CRIMEX

"Now the problem over on the COMEX is that the prices are not representative of what's going on in the markets." Chapman attributes this to the fact that the United States is trying to rig the gold market. He continues, "They are rigging not only the gold & silver market but the commodity market and every other market in the world they think they need to rig.  We have seen an exodus of speculators, traders, and even professional commercialists leaving the COMEX because the open inventory of orders has dropped from about 620,000 contracts down to around 285,000.  That's a tremendous drop."

The COMEX is approaching a November 28 deadline for investors to declare if they are going to take physical delivery of the gold they are trading. Chapman says that normally less than 1% of the COMEX players take delivery.  Yet this time there is is a great possibility there will be more than that. And according to some other gold bullion insiders there may be a run on the COMEX this December from a number of investors who will try to take physical delivery of a huge precious metals position. To effectively force the price of the physical and paper market to match up.

Chapman says that if 16% or more of COMEX gold investors demand to take delivery of the outstanding contracts, the COMEX will not have enough gold. Likewise, if 8% or more of the silver investors demand delivery then the COMEX will not have enough silver.

The show's host, Alex Jones, goes on to point out, "Meanwhile we have this huge gold rush on real precious metals.  And mints cannot even get enough to coin it.  There are runs on shops.  It's hard to get it anywhere.  Huge premiums. "

"They tried to hold paper gold down, now it shot up to $800."

Jones asks Chapman if the globalists would allow the COMEX to default on gold delivery or if they might bring gold 'in the back door' .

Chapman says that they probably would find a way to get it to them. "I don't know if the US Gov't has any left - maybe they would do it - or maybe they would ask the Germans, the Italians, or the French.   The Italians came out today and said they want to be sellers.   But they are part of the selling group in Europe - and they only have a so much of an allocation to sell during the coming fiscal year."

Jones: "Well aren't they just running it up on the COMEX so that they can make price delivery at the higher price so that they can actually buy the gold?"

Bob replies, " No, I think they want to depress it more than anything else." He continues, "Who cares whether they sell?  There are so many buyers out there it's all going to get absorbed."

"The game is over for these people. It's just a question of how long will it take for them to realize that they should stop selling because it's not going to do any good anymore ."

Chapman then discusses how the COMEX is manipulated. "In the COMEX you can sell gold that you don't have (by shorting).   Or you can also buy derivatives - betting that gold will go down,"  Bob explains, "that forces the derivative writer to go into the market and sell.  As long as they don't go naked.   Now some of them go naked - what percentage?  It's hard to say.  Because there is no regulation, it's an opaque market, and nobody knows what is going on behind the scenes. "

Jones: "Naked means that they don't even put up the few percentage points to leverage the buy - there is no money?"

Bob confirms, "Right.  Exactly.  And that's what they've been doing and getting away with and the professionals can't make any money because every time they make a trade they lose!" Chapman estimates that two thirds of the volume of physical gold traded on the COMEX is now gone.  And on top this factor - there is speculation about a raid on the COMEX with a lot of people demanding delivery. "How much?" Chapman asks. "We don't know yet but we will know by the 29th of December because that is the last day that the December contracts trade."   

On the COMEX if you want physical delivery of your contracts you have to declare by November 28th. If more than 16% of gold contracts are declared for physical delivery - then they'll have to borrow gold.

Jones: "Your saying there is 2/3 less volume in the COMEX because they have rigged it to make it unprofitable, so everybody's leaving it - which then kills the game for those rigging it! "

Bob: "Absolutely.  And it also means the cash market will get stronger and stronger because they'll go to London, Dubai, they'll go to ETFs all over the world (there is one trade in the NYSE  symboled "GLD" and that's where they are going to go because they are tired of losing money."

Buy gold & silver bullion

Chapman concludes, "If you've got money - you've got to be a buyer.  I've been doing this for 50 years.   This is my specialty.  You've got to do it.  You've got to be a buyer of gold & silver coins. "