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Monday, September 26, 2011

Why did gold get whacked recently?

There are many reasons why gold got hit hard recently, but I think the main reason was a coordinated attack by the central bank on the metals.

Last Friday, they raised the margin requirements on gold, copper and silver. I believe the exchange came out and hiked margins requirements on gold by 21%, on silver by 16% and on copper by 18%.

Do you think the big guys at JPM knew of this? I'd have to bet they did and since they had such a gigantic short position in the metal, they used that foreknowledge to nod to the syndicate that they'd work their high frequency trading platforms and drop silver/gold like a rock.

It looks like that worked and they made a lot of money! Sounds criminal to me, but I'm just a little guy, how would I know?

What's your opinion about what happened to gold? Do you think the smaller investor will use this opportunity to buy gold in smaller quanities now?

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