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Alasdair Macleod highlights that the recent sharp markdowns in paper gold and silver prices are driven by the expiry of futures contracts.
He explains that the establishment, including swaps and bullion banks, is seeking to reduce their short positions and go long between London and Comex. According to Macleod, these institutions can 'print' contracts at will to remove buyers, leading to price movements that are disconnected from the underlying physical metals.
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Macleod previously warned that a sudden downturn in financial markets could cause gold prices to surge, according to his post in "Financial markets may decline sharply and gold could surge". He has also discussed currency moves, including the recent yen recovery ahead of a potential BOJ rate hike outlined in "Yen recovers as markets expect BOJ rate hike on Sept 18th". These views follow ongoing commentary on shifts in precious metals and other asset classes.