It is like Fed's interest policy. It is called intervention but is also a manipulation. However, Fed's movement is public and frequently predictable. If a group does this kind of thing without the knowledge of general investors in the market, it could be called a manipulation.
That’s backwards. When the Fed moves its interest rate, it’s government fiat. It doesn’t matter where rates would be in the free market, their decision overrides the sum of all individual voluntary actions.
Selling gold is selling gold. It’s irrelevant whether you bought gold yesterday, a year ago, or a decade ago, or plan to buy it tomorrow, next year, or ten years from now. The market is what it is...a combination of prices people are willing to buy at and prices they’ll sell for. If you offer something above the market, the transaction won’t happen (just like trying to sell anything for more than people are willing to pay). If you want to sell, you have to offer it for a lower price where people are waiting to buy.
There is no magical “appropriate” amount to sell...you can sell as much as you can afford to. In fact, as you take on a larger and larger position liquidity becomes more of an issue, because you sell whatever people are bidding at a price, and then have to offer the next lowest price to sell any more. In that sense it’s self-regulating...as you sell more and more, it’s at worse and worse prices for you (and better and better deals for the buyers scooping up your sales). It’s the law of diminishing returns on steroids.
It’s actually worse than that. First off, as soon as you quit selling, you’re left holding a bunch of short contracts at below-market prices (you just held a fire sale, after all). Buyers will step in and bid the market back up. Maybe not all the way to where it was before your sale, but certainly enough to make your sale a very bad one. The second part is that traders are a vicious bunch, so in addition to buying a bunch of contracts “on sale”, they recognize as soon as you quit selling that you’ve accumulated a substantial short position. When you put your huge bid in to buy everything back on the cheap, they’re going to laugh at it (and certainly not sell back to you even cheaper).
In fact, they’ll start attacking your position...buying contracts outright, even at higher prices than they were willing to while you were still selling, because they know you’re most likely highly leveraged and every price they push it against you will magnify your paper loss until you exceed your margin and have to “puke” your position for a huge loss (ie buy back all your shorts at the market, making them money on their long positions).
Every single night we watch guys try to bully the market. Every so often they’re able to push things far enough against us to make us puke and take a loss, but that’s the exception. What happens day in and day out is that we scoop up contracts “on sale” (or sell them very preciously, if it’s a huge buyer getting long), wait until the guy runs out of steam, and then ride the market back toward equilibrium. By taking the other side of these big moves, we push the market back towards efficiency, and get rewarded for it.