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Andrew Maguire explores the marketwide implications of China buying gold and silver in vast quantities. https://www.youtube.com/embed/B2SKLq3WG10 ‘Talking Gold’ - a fortnightly update from Kinesis Director and precious metals expert, Andrew Maguire, providing a detailed round-up of the recent action in the gold and silver markets - a regular feature from the Kinesis Youtube show ‘Live from the Vault’. In this week’s deep dive into the gold and silver markets, Andrew Maguire reveals China’s unprecedented move into physical silver. The precious metals expert also shares word of the People’s Bank of China (PBOC) securing huge quantities of gold doré bars from the African region. Andrew Maguire breaks down the combined impact of these developments on the paper markets and physical supply. China sources African doré bar supply Andrew Maguire reveals China is buying gold doré bars in huge quantities, circumventing the LBMA bullion banks and refineries. According to industry sources, the People’s Bank of China is nowstrategically frontrunning every available ounce of the raw material. What's more, Andrew Maguire reports the PBOC has secured thousands of tonnes of raw supply at close to all-in global mine costs. As a result, the LBMA is losing out on the cheap mine supply they have relied on to suppress the gold price in the markets. However, according to Andrew Maguire, the structural change in bullion flows has gone unreported by mainstream media sources. With most coverage misreading a reduction of flows from the West to China, as a lack of demand for gold. China’s move into the physical silver market Andrew Maguire has it on reliable information that China has aggressively moved into the physical silver market. According to Andrew Maguire’s sources, the nation is buying physical silver mine supply in very large size. The precious metal expert believes the unprecedented move is already tightening up wholesale supply. Andrew Maguire reports that wholesale dealers are already experiencing the effects. Such as dealers having their silver allocations cut, even more so, in a period of already very tight supply. Watch Andrew Maguire reveal the algorithms behind the recent downwards price movement in gold and silver, in last week’s Talking Gold from fortnightly Kinesis show ‘Live from the Vault’. Impact on the paper markets As Andrew Maguire sees it, this shift in bullion flows explains the disconnected margin increase in the paper markets last week. Andrew Maguire reports never seeing “such a large percentage increase on an overnight increase in borrowing costs” for Silver and Gold Futures. For example, Andrew Maguire cites a 14 per cent, or $2000, per lot increase in SI Futures margins. In general, there are only two reasons for a significant margin increase: Very large price riseVery disruptive volatility However, the Futures markets have remained in the same flat range through the last 4 COT weekly. Following four weeks of flat prices, Andrew Maguire believes the hikes in margins are otherwise unexplainable. There is absolutely no credible reason for those margins to be increased. Andrew Maguire What does this mean for the gold and silver markets? In conclusion, as Andrew Maguire sees it, a tiny percentage of supply disruption can alter the paper game. The aggressive move of China buying gold and silver in huge quantities is tightening supply, and leading to tighter restrictions. Andrew Maguire believes tighter supply and tighter restrictions exhibit a firmly bullish setup. Andrew Maguire’s parting thought: Given what’s coming down the pike here I would not be sitting down waiting for a possible price dip, because you could be left on the sidelines here. Don’t miss out: Subscribe to the Kinesis YouTube channel Next Episode: Andrew Maguire carries out another detailed round-up of the gold and silver markets. The opinions expressed in this publication are those of Andrew Maguire and do not purport to reflect the official policy or position of Kinesis. This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis.
Andrew Maguire exposes the algorithms behind recent gold and silver market volatility. ‘Talking Gold’ - a fortnightly update from Kinesis Director and precious metals expert, Andrew Maguire, providing a detailed round-up of the recent action in the gold and silver markets - a regular feature from the Kinesis Youtube show ‘Live from the Vault’. In this week’s exploration of the markets, Andrew Maguire exposes the algorithms behind the recent downward price movement in gold and silver. The precious metals expert breaks down why the bearish correlations of these algos are unwinding - and where this leaves gold and silver. How are algorithms influencing the price of gold and silver? With the COMEX a 99% algo-driven market, Andrew Maguire sees orchestrated algo as the driving force behind the recent market volatility in gold and silver. The agnostic algos are programmed to search out and latch onto any possible correlation, completely disconnected from supply-demand fundamentals. For this reason, high-frequency trading bots are able to influence these largely neutral algorithms. According to Andrew Maguire, a tide of algorithms chase to source a tick either side of any generated price movements, which causes volatility in the gold or silver markets. Over the last week or so, Andrew Maguire reports these algorithms have been programmed to automatically sell rallies into the downsloping 10-day moving average. The footprints are clear, officials have stepped in to directionally chart paint correlations and incentivise neutral algos to stampede in the direction of whatever is currently working.Andrew Maguire Is the current algorithm game up? Stepping through the footprints, Andrew Maguire noted the first bullish signs that these directionally orchestrated algo correlations were becoming bullishly disconnected. In Andrew Maguire’s opinion, the disconnect was due to 2 major factors: The impact of the 100-day moving average, a level deliberately front run by insiders.The political uncertainty leading up to the US election, intensified by US President Donald Trump testing positive for COVID-19. Andrew Maguire reports a contraction of the window between the aforementioned downsloping 10-day moving average and the rising 100-day moving average. As the window tightens, it becomes increasingly difficult for officials to maintain a cap on the 10-day moving average. Secondly, in Andrew Maguire’s opinion, uncertainty surrounding the upcoming US elections is driving safe-haven demand. A factor that was exacerbated last Friday morning, when Trump tested positive for COVID-19. The black swan event triggered an unfactored simultaneous tail risk drive into both gold and the US dollar, serving to further disconnect unnatural algo correlations. Watch Andrew Maguire explain the paper market footprints that signalled an imminent raid on deliverable physical COMEX gold. When algorithms cease to serve their purpose, new correlations are simply hunted out. If insiders are caught offside into a technical and fundamental oversold condition, in a physically delivered contract, they will always defend their positions. Andrew Maguire predicts that the bearish for gold correlations will continue to unwind. Where the dollar index is concerned, the precious metals expert expects gold to rise alongside the US dollar, with algos eventually latching on to that trend. Andrew Maguire’s parting thought: These largely unfactored tail risks will be very assisted for all safe havens, we expect gold to do what it said on the tin - in such uncertainty, as it’s done for thousands of years. Don’t miss out: Subscribe to the Kinesis YouTube channel Next Episode: Andrew Maguire carries out another detailed round-up of the gold and silver markets. The opinions expressed in this publication are those of Andrew Maguire and do not purport to reflect the official policy or position of Kinesis. This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis.