Can you see what is happening here? China appears to be forcing a monetary reset.
We know from Jeff Currie that the international bullion banking cartel is using the paper ETFs to control spot price of gold and silver by controlling massive amounts of physical gold and silver and then shorting the ETF.
They assume their enemy is "retail traders" and they assume no squeeze is possible because it would take a monumental coordinated effort to put the bullion banks supply in jeopardy.
Well, China is now using the Shanghai Gold Exchange to drain COMEX and LBMA vaults of gold and silver by offering an arbitrage deal on physical gold and silver.
This is forcing the shorts to get called because physical delivery is being taken by retail traders globally that are looking to make a buck in the arb trade.
The effect? Gold and silver spot ETFs are losing control of the spot price.
A word of warning to bullion banks. China is no retail trader.
Can you now see how this could play out in the COMEX? The bullion banks that sponsor the ETFs and have massive metal in the vaults are already to the point where they cannot control the physical deliveries being requested. They'll be drained soon to the point where they'll be forced into the 589 rule.
What is the 589 rule you may ask? It is a provision within COMEX that accounts for a situation where gold and silver trades cease to happen. When no futures trades in gold and silver occur, trading is briefly halted and the spot price is adjusted upwards to entice trade. This process continues until trades are sufficient, but the important thing to understand is that the rule is meant to move spot price towards natural price discovery. The end result of this rule, if triggered, is massive daily moves in spot price of gold and silver. The rule is in effect until trades resume.
The questions that need to be answered are:
1. How much metal is left in the vaults?
2. How high is China willing to push the arb trade on SGE?
Very exciting times for PM holders
