The sudden drop in price also provides an opportunity for the shorts to cover their positions, profiting via paying back their creditors with lower priced gold or equities.

Investment banks and savvy traders riding their coattails have used this pattern to profit at the expense of honest traders that aren’t in the loop, as was detailed in the precious metals market by whistle-blower Andrew Maguire in March of this year. And despite the manipulation being meticulously explained to the Commodities Futures Trading Commission (CFTC) and released to the press by the Gold Anti-Trust Action Committee (GATA), nothing has been done to stop the manipulation or address the massive concentration of paper short positions by a few of the largest investment banks. But schemes of this nature tend to eventually fall apart one way or another, even if market regulators are bought off and completely lacking in the moral integrity necessary to do the right thing. Market forces have a way of re-asserting themselves, particularly when the scam is brought into the light.

In order to fact check some of Andrew Maguire’s claims and try to identify new trading opportunities, I decided to take a look at gold’s price action just prior to futures and options expiration since the start of the year to see if the charts (courtesy of Kitco) support the claims of manipulation.

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