Bill-

Do you think there is any chance that in a worst case scenario that the US Govt will not allow us to hold physical gold?

To Michael,

My question to the authorities would be why was it that only the mini (YGJ07) traded at a low of 625.10, whereas the major (ZGJ07) traded at a low of 663.50.

That’s a 6.14% difference.

Good Luck.

Bill, thank you for notifying your readers...

Michael,

I'm very interested and eager to know what response you receive from the CBOT for Telestar3d excellent observation.

Something similar happened to me last year. I was long Yen when North Korea fired missles out over the Yellow Sea. I got stopped out on a spike that immediately reversed itself.

I could not file a complaint because it was a 'material event' and no way were they going to bust the trade. Correct me if I'm wrong but there was no material event in the gold market. Michael, I think you were cheated.

Best of luck,
Joel.

First off. Thank you Bill for posting my email along with the great looking charts. And thank you readers for your comments.

onlineaces- The response that I received from the CBOT technical services representative was "We have reviewed trades that took place earlier and we did not find anything out of the ordinary" It seemed to me that they do not want to reverse the trades and deal with the people who bought at those prices.

My broker told me that mini gold is a thinly traded market and it does not have to trade in parity with the full size gold futures. I think that it was a lame excuse.

The CFTC regulates futures trades and regulates the markets. The man on the phone there told me that "we are aware of gold movements". He really did not seem to care about the situation, and acted like I was bothering him by calling him.

Thanks again for your concern and comments.

Mike

ALOHA !!

I believe Michael was cheated also, but I suspect he will have to stand in line and pray that perhaps either George Soros or Warren Buffet got axed also.

I believe this sort of manipulation will turn the US markets into a Third World Egyptian CCSI style stock market ... NO CREDIBILITY is the bottom line. As more and more traders get fed up with this con game they will start to turn to other markets or "god forbid" actually buying the physical bullion instead of the paper!

The lesson here is do not trade the mini’s, with the possible exception of the S&P.

I'm afraid that resting stops are just an excuse to rip you off.

Manage trades by hand, or accept the abuse.

I just looked at the chart, hadnt seen it before.
lol, not even funny. But this happens in stocks all the time, you just don't hear about it.

If you leave mechanical orders in the system, then there is no legal protection against this kind of event.

procol wrote "...Manage trades by hand, or accept the abuse..."

Feasible with equities, but in futures market where so much can occur geopolitically while we are asleep, it would be extremely risky to trade without the protection of mechanical stops.

I think the lesson here is:
Do not trust the stop limit orders.
For thinly traded items Use alerts and execute your stops manually.

Kaushik, theres no free lunch.

suggest you buy options to hedge extreme risk , cause stops are a fools paradise in this market.

Even if they are not deliberately gunning you, the chance of a fast move and faster reversal , taking your stop out are just as likely as some even costing you money.

Check out oil last night, stops at 66,67,68 were hit.

line should read 'some event costing you money'

Sorry to hear about that, something similar had happened in the past… (I posted about that at my blog… :

http://globalgold.blogspot.com

Anyway, Gold Is poised to accelerate upward in my opinion.

see http://globalgold.blogspot.com/2007/02/tricky-gold-market-part-ii.html

Here is some recent correspondence between myself and the CFTC (Commodity Futures Trading Commision)

Hello,

I have just recently started investing in YG (mini gold futures) on the ECBOT. On 3/28/2007 at 9:40 AM ET, the CBOT gold contract spiked down over 30 dollars per contract. I had a stop set 20 dollars below the bid. The spike down lasted for less than one minute and was over a 6% drop in the contract price. Seconds later, the price was exactly right back at the pre down spike levels. Also, there was no price parity between the spike down in the April and May mini gold contract and the regular ZG (100 OZ) contract. Shouldn't there be price parity between the two contracts? Also, how was a price move of this magnitude allowed to occur at the exchange? It looks to me like someone deliberately took advantage of CBOT's system. Please make sure that something like this does not occur again. I would like to have the exchange reverse the trades that occurred from this anomaly, but I feel that it is unlikely.

Charts of the spike are posted at this link:

http://www.billcara.com/archives/2007/03/we_the_enemy_wed_mar_28_2007_1.html

Thank you for your serious concern regarding this matter,

Michael

Here is there reply: Notice that the word "problem" is used in their response.

Dear Michael

Our Market Compliance section here in Chicago heard about this problem yesterday and they are investigating. Your message was forwarded to them.

Sincerely,

Jay Huhman

CFTC-Market Surveillance-Chicago

Michael, Thanks for update.

This is a very important issue and I have special interest in gold .

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