December in North America had already entered the depths of winter, though compared to Beijing, where people were already bundled up in thick cotton coats, the temperatures here were still much milder.
Consequently, on the streets of Wall Street, one could see many people wearing trench coats and leather jackets.
However, everyone was hurrying along, their expressions grave.
The Federal Reserve’s three consecutive rounds of interest rate hikes were nothing short of a disaster for Wall Street, adding insult to injury to an already sluggish economy.
The financial sector is inherently highly sensitive to economic and market conditions, and when such situations arise, those working in the industry are the first to feel the pressure.
At the entrance to the gold futures market, Li Yi, accompanied by his team members and Reggie Green, was ascending the steps, preparing to enter the world’s largest gold futures market.
Although he had been here countless times before, this visit was undoubtedly the most memorable, as today marked the culmination of a massive short-selling strategy he had been orchestrating for two and a half months.
Just an hour earlier, while Li Yi was having a lively discussion with Reggie Green about the company’s future, he suddenly received an urgent call from Billy. Billy reported that gold prices at the futures market had plummeted again and might soon reach the price Li Yi had anticipated, urging him to come immediately.
Upon receiving Billy’s call, Li Yi wasted no time. He immediately explained the situation to Reggie Green and prepared to head to the futures market to take charge.
Upon hearing the news, Reggie Green expressed a desire to come and see the action for himself, which led to the scene unfolding before them!
When Li Yi and his group arrived at the VIP lounge, Billy immediately came out to greet them with his team.
“Boss, you’re finally here! If you hadn’t come, we wouldn’t have known what to do!” Billy said, sounding somewhat excited.
“Billy, what are the current international gold prices and the prices of gold futures contracts?” Li Yi asked straight to the point.
“The international gold price has dropped to $275 per ounce, and gold futures contracts are fluctuating between $27,300 and $27,400 per contract!” Billy replied expertly.
Hearing this, the group that had followed him in immediately wore a variety of expressions.
Zhou Xinghua, Li Yunbao, and the others looked utterly stunned, for they remembered Li Yi had explicitly stated that the international gold price would drop below $300 per ounce—they never expected it to actually fall to this level.
This prediction was incredibly accurate—it was practically a divine prophecy!
Meanwhile, Reggie Green, standing nearby, wore an expression of deep regret. He recalled what Li Yi had told him earlier: his target price range for closing his position was between $270 and $300 per ounce.
At the time, he had thought there was no way the international gold price could possibly drop to $270 per ounce, so he had closed his position early.
But just one day later, the price actually dropped to around $275—a full $30 cheaper than his $306 exit price.
Given their position of 456,000 contracts, every $1 drop in the international gold price would have earned them an additional $45.6 million.
Now that the gold price has plummeted by over $30, it means they’ve suddenly lost $1.368 billion in profits.
Reggie Green was filled with regret. For a pure businessman like him, earning less is the same as losing money.
Losing over a billion dollars in potential profit is equivalent to suffering a loss of over a billion—the joy he felt at yesterday’s settlement vanished in an instant.
He thought back to Li Yi’s advice and reflected on his own stubbornness; a sense of regret and melancholy welled up within him…
Li Yi paid no heed to the crowd’s reactions. After a moment’s thought, he said, “Billy, starting now, slowly start buying back the futures contracts on the market!”
“Remember, don’t move too fast. As soon as prices show any upward trend, stop buying immediately. Wait until prices drop before buying again!”
“Yes!”
Billy then began making arrangements according to Li Yi’s orders.
After Billy and the others left the VIP room, Reggie Green said with a grim expression, “Li, you really were right. The international gold price has actually dropped to a low of over 270 dollars per ounce. You’ve really made a killing this time!”
Li Yi smiled and asked, “Regretting it?”
“Uh… a little!” Reggie Green replied, looking slightly embarrassed.
“Green, you really have no reason to regret it. Investing requires boldness and caution, but you must avoid greed.”
Li Yi continued, “Taking that next step could lead to heaven—or it could lead to hell. If you don’t have absolute certainty, it’s best not to take the risk!”
“Li, how can you be so sure the international gold price will definitely drop?” Reggie Green asked curiously.
“Heh, because I’m Li Yi!”
Hearing Li Yi’s supremely cool remark, Reggie Green was momentarily dumbfounded.
He’d seen people show off before, but this was the first time he’d encountered someone who could do it with such style.
However, just as he was about to ask for clarification, Li Yi uttered a phrase that left him completely baffled: “Unfounded gains bring empty joy; those who haven’t grasped the true teachings are trapped.”
After that, Li Yi didn’t mention the topic again.
What is showing off? It’s when you clearly understand 20% but boast as if you know 100%!
Class, on the other hand, is when you know 100% but choose to say only 20%!
Clearly, Li Yi understood the art of “class”!
While they were talking, the trading floor outside presented a completely different scene.
As Billy and his group began buying up futures contracts on the market, some investors sensed an opportunity and started raising their asking prices.
By the time Billy and his team had acquired over 10,000 futures contracts, some had already priced each contract at $27,800.
As for these people, Billy chose to ignore them entirely; he accepted any contracts priced below $27,500, but once the price crossed that threshold, he refused to touch them.
But that’s just how the futures market works: as soon as one person raises the price, others immediately follow suit.
Anyway, it’s a case of “better safe than sorry”—what if they manage to sell at a high price? Then they’d make a profit, right?
Even if they didn’t sell, there was no real loss—they could always lower the price later!
So, by the time this tug-of-war dragged on until the morning close, there were no longer any futures contracts below $27,500 on the market; instead, contracts at $28,000 and higher were everywhere.
At this point, the futures contracts Billy and his group had acquired totaled less than 25,000 contracts—still a long way from the 169,000 contracts needed for delivery.
Actually, it’s understandable that investors would drive up the price of futures contracts—after all, they aren’t stupid.
Judging by the market’s recent performance, it was clear that large institutions or major clients were bottom-fishing; it made perfect sense for them to push prices higher.
As long as the asking price wasn’t too high, the other party likely wouldn’t have minded.
However, what they didn’t know was that they were up against someone who was on a roll.
Li Yi knew full well that from this point on, for years to come, the international gold price would not rise.
In other words, the price of $270 per ounce would be the norm for a very long time.
Given that, why would he bother paying a premium to acquire them?
After all, he was currently short more than 169,000 futures contracts. For every dollar the purchase price increased, he’d be spending an additional $17 million.
And since his daily capital costs amount to just $1.3 million, the difference is crystal clear.
So, right now, he won’t spend a single penny more than necessary!
Consequently, after receiving Billy’s report, Li Yi promptly ordered the suspension of today’s purchases, postponing the matter until tomorrow.
Consequently, before the New York gold futures market even closed, the group withdrew.
Without a major client like Li Yi, the trading volume of gold futures contracts plummeted instantly that afternoon.
After all, with gold prices plummeting from over $600 per ounce to the current $270-plus—a drop of more than half—no one knew if the downward spiral would continue.
It was just like the property market in Hong Kong—the more prices fell, the fewer buyers there were.
Unless it was a genuine need, absolutely no one would touch it, because no one wanted to be the one left holding the bag at the peak.
After a standoff lasting nearly two hours, seeing that no one was stepping in, some of the more nervous sellers began lowering their prices again.
But while there were still plenty of onlookers, very few dared to make a move!
Left with no choice, these sellers had to keep lowering their prices. By the time the market closed in the afternoon, prices had fallen below $27,500 per lot…
………