Chapter 621: Dumping at Rock-Bottom Prices!
New York Gold Futures Market. VIP Room!
“A straight $1 price cut?”
Billy looked at Li Yi with an expression of disbelief, trying to make sure he hadn’t misheard.
At the same time, George and the others standing nearby looked just as stunned.
Only Lan Xinyi, Cai Bingyan, and the others remained completely unfazed; they were already used to this sort of thing.
Just moments ago, Li Yi had issued his first order to Billy’s team: “Have them sell their futures contracts on the open market at a price reduced by $1 per ounce from the current international gold price!”
Upon hearing this order, everyone was completely baffled.
“Boss, I think you might not be familiar with the trading rules of the New York gold futures market. Here, one contract is 100 ounces. The minimum price fluctuation is $0.10, meaning the price of one contract fluctuates by $10…”
Before Billy could finish, Li Yi cut him off and said in a deep voice, “You don’t need to explain the trading rules in detail—I understand them all!”
“Then why are you doing this?” Billy asked curiously.
Hearing this, everyone else’s gaze fixed on Li Yi.
In fact, it wasn’t just Billy who was curious about Li Yi’s reasoning. After all, they held a total of 166,944 contracts of gold futures. Given a price fluctuation of 0.1 USD per ounce, every 0.1 USD rise or fall in the gold price would result in a profit or loss of approximately 1.7 million USD for Li Yi.
But now, Li Yi was directly lowering the price by $1 per ounce. Once all these gold futures contracts were sold, at the current gold price, Li Yi would incur a direct loss of $17 million.
Li Yi glanced at the group and said, “I understand your thinking. Normally, we should indeed place orders at market prices and gradually offload the futures contracts we hold.”
“But we currently hold futures contracts worth $10 billion. If we sell them at normal prices, the process will be too slow, and it will be difficult to drive the price down. So we have no choice but to use this saturation-style low-price strategy to dump a massive volume of contracts and force the international gold price to drop!”
After hearing Li Yi’s explanation, both Billy and George’s teams looked at him as if he were a fool.
Isn’t this just nonsense!
International gold prices have never been driven solely by supply and demand; rather, they are influenced by factors such as the global political landscape and Federal Reserve policy.
Although they hold futures contracts worth tens of billions, if these were to be dumped into the market on a large scale, it would inevitably cause sharp price fluctuations.
However, if there are no major shifts in the international landscape or Federal Reserve policies that undermine investor confidence in gold, international gold prices might dip temporarily but would likely rebound before long.
At that point, Li Yi might suffer unprecedented, massive losses.
With this in mind, as a professional manager, George felt it was necessary to advise the young man before him.
“Boss, I believe there are significant risks inherent in your strategy…”
But before Billy could finish his sentence, Li Yi’s voice rang out again: “Sir, I don’t care what you think—I care about what I think!”
Just as Billy and the others were left dumbfounded, Li Yi spoke again: “It is your duty to warn investors about risks, and you’ve done a good job of that. But let me make this clear: with me, you don’t need to say any of that. You must strictly follow my instructions without the slightest hesitation. Can you do that?”
Billy furrowed his brow; he had never encountered such a domineering investor before.
After a moment’s hesitation, he finally replied, “Yes!”
Li Yi then turned his gaze to George and the others standing nearby—the implication was clear.
George didn’t hesitate and gave an immediate affirmative response.
“All right, ladies and gentlemen, now begin the operation according to my orders!” Li Yi issued his final command.
“Yes!”
Immediately, Billy relayed Li Yi’s instructions to the team members, ordering them to head to the trading floor and begin selling their gold futures contracts at $598 per ounce.
Watching Billy skillfully assign tasks, Li Yi couldn’t help but let the corners of his mouth turn up slightly.
His earlier explanation to Billy and the others had been just one of the reasons; the sole purpose of slashing the price by one dollar was to offload the contracts quickly!
If he’d had enough time, Li Yi wouldn’t have done this. He would have followed Billy and the others’ advice and sold off his positions slowly, bit by bit, ensuring that all his futures contracts were sold at the peak of the market.
But he didn’t have that kind of time now!
Barring any surprises, international gold prices would drop tomorrow. He had only today left, so his only option was to offer a low price to entice investors to buy the futures contracts they held.
Of course, he wouldn’t tell Billy and the others any of this.
As it turned out, Li Yi’s strategy worked like a charm.
When the price of $598 per ounce appeared on the market, it immediately sparked a frenzy among investors.
It’s important to note that international gold prices had remained quite firm during this period, more than doubling in less than three months.
In fact, just as the market opened today, the price had even risen slightly by $0.10.
Therefore, no one expected the price to fall, let alone crash.
Upon seeing such a low price, investors didn’t hesitate and immediately bought in large quantities.
In less than two hours, one-third of the 166,900 gold futures contracts in Li Yi’s portfolio had been sold.
However, due to Li Yi’s massive sell-off, the supply of gold futures contracts on the market surged, causing a significant impact on contract prices; the price dropped directly from $599 to $598.
Seeing that the previously listed price no longer held an advantage, Li Yi once again ordered Billy and the others to lower the price, and this time the reduction was even greater—a direct drop of $3 per ounce.
Although Li Yi’s order seemed outrageous, having learned from previous experience, Billy and the others carried out his instructions without hesitation.
When the price of $595 per ounce appeared on the market, investors were thrilled.
As gold investors, most of them had their own sources of information.
The moment low-priced gold appeared on the market, the vast majority of investors began to suspect that the gold price might be falling, so they called the Chicago Gold Futures Market—the second-largest in the U.S.—to inquire about the situation.
However, the answer they received was that the Chicago gold market remained as firm as ever.
Not only had the price there not dropped, but it had actually risen by $0.30 per ounce, reaching a staggering $599.90—just a little more and it would break through the $600 mark.
At the same time, some well-connected investors sent telegrams to friends in London, asking them to investigate the gold prices there.
After all, the London market deals in physical gold, which reflects the true price of gold in real time.
The investors received word that gold prices in London remained strong, showing no signs of a decline whatsoever.
Upon receiving this news, the investors hesitated no longer. They once again waved their cash and bought up large quantities of the futures contracts that Billy and his group were dumping.
After all, with a price difference of nearly $5 per ounce—and a contract size of 100 ounces—that amounted to $500. If executed well, it was enough to make a killing for the vast majority.
Most importantly, the risk was minimal—wasn’t this a windfall?
Consequently, a frenzy of buying gold futures contracts quickly swept through the New York market…
……….