QUESTION: Marty, do you think it is even possible for gold to close at $2,000 by year-end? This just seems to be the same story over and over again. Thanks SK ANSWER: Sorry, no. Here is a chart of gold back to 1264. There is not even a pattern like that, which has EVER taken place. I am really at a loss why gold analysts keep proclaiming the same thing costing people their life savings. Pretending to be a forecaster to just talk people into doing something you would like to see is called manipulation. To keep a client base you have to have correct forecasts. Is this just a process of churning out novices and causing them countless losses to line the pockets of the pros? Technically, this is the primary support channel in gold. It has not changed. These forecasts for gold are entirely out of context and ignore the entire world economic trends. You cannot even argue gold rises with war for that is not even true. Gold did not rally during World War II because it was fixed. Commodities did not rise because the government put in wage and price controls. This is not a simply if then do this formula. It takes a bit more – if then do this else do that.
Mainstream press pundits are themselves surprised at the bull market the world has seen in stocks, and many are beginning to note that, soon enough, investors themselves will grow wary about investing in the stock market. The price of gold bullion since March has come down approximately $100 per ounce, and since 2011 the price has fallen from nearly $2,000 an ounce to its current price of approximately $1,300. The story is similar for silver, which fell from its high of $49 in April 2011 to today’s price of $19.50. Many analysts on mainstream press have indicated that the gold bull market is through, but the evidence points towards the contrary. Behind the headlines of a record breaking stock market, news about suspected gold price manipulation has caught the attention of many. As the New York Times writes of an ongoing hearing regarding the claims: At a 40-minute hearing, lawyers for more than 20 plaintiffs gathered in Federal District Court in Manhattan to coordinate their linked lawsuits against the five banks that make up what is known as the London gold fix. The suits, filed by hedge funds, private citizens and public investors like the Alaska Electrical Pension Fund, contend that the banks have used their privileged positions as market makers to rig the price of gold to their benefit.
With the launch in mid-August of a new system to arrive at the price for silver, precious metals investors are dealing with the first in a series of changes in how the market prices of silver, gold, platinum and palladium are reached. More change is coming, since the other three metals have yet to go through the process, but what’s happened so far is this: Concerns about price fixing after everything from LIBOR to currency were found to have been manipulated led to accusations about the gold and silver markets, and in January of this year Germany’s financial regulator Bafin said that the manipulation of precious metals prices was worse than that occurring with LIBOR. Deutsche Bank was interviewed by Bafin on the matter before the end of 2013, and in January the bank announced that it would exit the commodities business and abandon its positions in the processes of fixing gold and silver prices. Since Deutsche Bank was one of only three involved in the 117-year-old process of setting the price of silver – the other two were HSBC and Bank of Nova Scotia – that meant a new method had to be found before Deutsche Bank departed the scene. In August, that new method launched. An electronic, auction-based mechanism has taken the place of the traditional conference call among the three banks that had determined how silver would be priced since the time of Queen Victoria. Run by CME Group Inc. and Thomson Reuters Corp., the new system uses electronically entered orders proposing a starting price; if buy and sell orders don’t match up, an algorithm will determine the price to be used for the next bidding round. CME had said in a report when the system went live that each round should take 30 seconds or less, and that participants will be able to view bid and offer volumes, as well as total volumes traded once the price is set.
This post was published at TruthinGold on August 28, 2014.
The new silver fix is a fact since 17th August 2014. The silver fix has been a driver in setting the silver price in the last 117 years, but now a revised ‘fixing mechanism’ with other ‘fixing members’ is in place. Up until August 14th2014, three institutions have been participating to the daily silver fix, i.e. Deutsche Bank AG, HSBC Bank USA N. A. and The Bank of Nova Scotia. In the new silver fix, the participating members are HSBC, ScotiaMocatta and Mitsui. Before looking into the question what to expect from the ‘new’ silver fix, it is important to understand what the ‘old’ silver fix has done to the price of silver. Commodity analyst Dimitri Speck has focused his research on discovering silver price manipulation related to the silver fix, more so than the Gold Fix. Based on his extended statistical analysis around intraday average price patterns, he was able to pinpoint when exactly the manipulation (or, intervention) took place, and he provided the world unbiased charts. The next paragraphs focus on his findings; they are based on Dimitri Speck his book ‘The Gold Cartel.’ The book ‘The Gold Cartel; Government Intervention in Gold, the Mega-Bubble in Paper and What this Means for your Future’ is written by commodity analyst and precious metals expert Dimitri Speck. The book is available at Amazon. It is one of the few ‘must read’ books on precious metals with important investment insights for serious investors. The key in uncovering the silver price manipulation is to analyze price patterns in three distinct time frames: Before 2010 Between 2010 and April 2011 After May 2011 In the period before 2010, the intraday average silver price chart clearly shows statistically significant anomalies. The first chart shows the intraday average price between August 1998 and 2011. The obvious observation is that a significant price break down has been appearing right at the silver fix, which is at 7AM EST (New York time). A second sharp decline is visible at 10AM EST, which is probably linked to the gold fixing, see below. The chart takes into account almost 13 years of data, it excludes every form of coincidence or randomness.
If one looks at a longer term chart of the last two years it’s very clear that gold is being capped at certain levels, and those levels are slowly forcing gold lower and lower. Each one of these manipulation zones are being defended successfully and that has some serious connotations going forward. This all started right after the announcement of QE3. Gold was driven below $1700 and held below that level for 2 months. This got the ball rolling so to speak, it broke an intermediate cycle and started the bear market. Of course we all remember the call by GS to sell gold short followed by the premarket attack on April 12 that took out the stops below $1520 leading to a waterfall decline. That had to be one of the most blatant cases of manipulation in market history. Without a doubt gold completed a final ICL on Apr. 16. The May retest was the beginning of what should have been a recovery from the manipulation and a resumption of the secular trend.
But then something happened. As gold tried to rise above $1400 we saw repeated attacks to keep gold below that level eventually leading to another waterfall decline in June down to $1179. In the process this created a 33 week intermediate cycle – a full 10 weeks longer than normal.
This post was published at Gold-Eagle on August 24, 2014
By Doug Short, Advisor Perspectives: Earlier this week I updated my commentary on Five Decades of Middle Class Wages, an analysis of Real Average Hourly Earnings of Production and Nonsupervisory Employees. During the 21st century and especially since the end of the Great Recession, wages have clearly been stagnant. But, as Mark Twain famously remarked, ‘there are three kinds of lies: lies, damned lies, and statistics.’ I was, therefore, not surprised when a reader sent me a link to a blog article entitled ‘Real Wage Stagnation Is a Bit of a Myth.’ Seriously! The article featured a chart that included the very same earnings data series that I had used, but it came to quite the opposite conclusion: ‘Contrary to popular belief, wages have been rising a bit faster than prices. In other words, real wages haven’t stagnated as widely believed, but have been moving higher, albeit at a slow pace.’ All it takes is a simple statistical manipulation to paint a smiley face on the real wage data. And what is that? Choose a tame deflator for your inflation adjustment. Below are two charts of the Average Hourly Earnings of Production and Nonsupervisory Employees stretching back to 1964, the year the Bureau of Labor Statistics (BLS) initiated the series. The top chart is my analysis. The one below it is the optimistic variant that claims stagnation is a ‘myth’ (click them for larger versions).
This post was published at Wolf Street on August 24, 2014
Every day, more investors are becoming aware of the suppression of precious metals prices in the futures and options markets. It’s a serious issue and needs careful consideration. The following updates to this issue are posted in an effort to keep a historical record and to allow the reader an intial place to start in his/her own research.
September 24, 2014
Jim Rickards, author of the book, The Death of Money, gives a terrific overview of all the tools available to those who manipulate the gold market. He also reviews the strategy of the central banks and why the Fed ultimately wants a weaker dollar and why China would prefer, at least for the time being, lower gold prices. This is a MUST LISTEN interview with Anglo Far-East and the audio file can be found here.
More evidence from the past that those in high places wish to control the price of gold comes from a staff meeting of the former Secretary of State, Henry Kissinger in 1974. The discussion centers on how to go about the demonetization of gold in order to prevent Europeans, especially Western Europe, which has a higher concentration of gold holdings than the US, from using their gold to settle accounts and generate reserves, thereby undermining the dominant position of the US dollar. Read more at LibertyBlitzkrieg.com.
A careful and thorough reading of the CFTC’s announcement will reveal that nowhere is it stated that they did not find evidence of manipulation. The announcement only describes their exhaustive investigation, with over 7,000 staff hours spent on the case. The fact that their conclusion doesn’t state any specific finding, but rather only declares that no “enforcement action” will be executed “based upon the law and evidence as they exist at this time” is very revealing. As Chris Powell of GATA explains in this KWN interview, the US government under the Exchange Stabilization Fund Statute, the Gold Reserve Act of 1934, has legal authority to interfere in the precious metals or any other markets. So if manipulation was found to be occurring because of government intervention, the CFTC would be unable to bring any charges against the US government or any of the parties the government was using to carry out such activities.
September 24, 2013
Max Keiser interviews Andrew Maguire, who has gone public with information indicating that the CFTC was given more evidence of gold and silver market manipulation in June of 2012 from two more whistle blowers. And allegedly, these whistle blowers were blowing from the depths of the beast – they were both JP Morgan employees. (Maguire’s interview starts at the 12:30 mark.)
March 14, 2013
Chris Powell of GATA on CNBC Asia continues to explain GATA’s allegations of western central bank suppression of gold prices via leasing and swap arrangments.
December 18, 2012
Serving as a brief review of many of the issues already documented on this page, Lauren Lyster interviews GATA’s Bill Murphy & Chris Powell.
November 14, 2012
Bart Chilton is interviewed on RT, where he admits to seeing one participant in the silver market hold a 30% concentrated position. Of course, although he doesn’t explicitly state the nature of this position, it should be noted that it is a short position that trader held. When the Hunt Brothers were charged with a manipulative position of the silver market in 1980, it was only a 20% position, but it was on the long side.
The fact that not only precious metals markets, but most all markets are potentially rigged – and legally, due to the Gold Reserve Act providing the Exchange Stabilization Fund, managed by the US Treasury, with the ability to secretly intervene in any financial market, while being exempt from congressional oversight and questioning.
The debasement of US coinage in 1965 and President Johnson’s warning to potential hoarders of silver.
The selling and leasing practices of western central banks.
German government concern regarding its own central bank’s gold transactions as well as its practice of storing the national gold reserves abroad at the Bank of England, Bank of New York and Bank of France, where its likely that the gold has been used in swap and/or leasing schemes to help keep the price controlled.
GATA’s never-ending battle to obtain information (using FOIA) regarding gold transactions by the Fed and US Treasury.
The article has many valuable and interesting links, supporting central banking intervention in the precious metals markets.
October 13, 2012
In the following video, Lars Schall interviews Dimitri Speck, author of the German-language book “Geheime Goldpolitik” (“Secret Gold Policy”). Dimitri summarizes the history of the price capping schemes the central banks have undertaken in the gold and silver markets since 1993.
September 24, 2012
Here’s an article over at the International Man site by Jeff Thomas. The article gives a somewhat simplified overview of how banks control the price of gold as well as a likely scenario of what will happen when more people start seeking physical bullion and avoid its paper derivatives (i.e. ETFs & pooled accounts) as they realize there isn’t enough physical to go around. This, combined with the comments section, provides for an interesting read.
September 6, 2012
Bill Murphy (GATA) and Lauren Lyster (RT) review recent developments in the ongoing precious metals price suppression activities and the investigation by the CFTC. See this page for more information.
Dimitri Speck has done some investigative research into the $22 gold price plunge on June 7, 2012 using the COMEX’s own trading records. He published his findings over at Safehaven.com, which reveal that the price was smashed in less than a second at 9:21 PM at the 20-second mark. Only High Frequency Trading (HFT) algorithms could accomplish such a feat. The price was thereafter suppressed for a couple hours, allowing the financial institution(s)’ employing the HFT technology to reap quick profits. “This was a well-defined incident in thin trading, limited to a short time period and to a single market. These conditions make it ideal for a successful investigation by the regulatory authorities.“
August 7, 2012
Lauren Lyster of RT interviews Chris Powell of GATA regarding the Fed’s surreptitious suppression of the gold (and silver) price. The discussion yields a good understanding of the situation. Powell reminds the audience that in 1965, President Johnson, as he signed the Coinage Act of 1965, warned silver investors not to invest in silver – not to drive the price up – because the US government would dis-hoard from its strategic silver stockpile to rig the silver price. (See actual remarks of silver hoarding by President Johnson here.) So, since 1965, the US government has pledged to rig the silver market. Another astonishing fact conveyed during the interview is the establishment and use of the ESF (Exchange Stabilization Fund) in order to trade (intervene) in any market the Treasury chooses. Only the President and the Treasury Secretary have the legal authority to control and have knowledge of the activities of the ESF and it is exempt from any inquiries including immunity from any efforts based on the Freedom of Information Act.
July 30, 2012
Back in September of 2009, Zero Hedge claimed that this conspiracy revolving around gold price suppression was “no longer a theory, … merely sad.“ The evidence Zero Hedge uncovered, the smoking gun, was a memo written in 1975 by then Chairman of the Fed, Arthur Burns. The memo was addressed to President Ford and outlined a disagreement between Fed policy and U.S. Treasury Policy on the issue of whether or not central banks of the world should be free to buy gold from one another at market prices. Even back then, in 1975, the official price of gold was $42.22/ounce, but market prices had been trading between $160 and $175. The Treasury was apparently open to such free market activity, but the Fed was opposed. The Fed’s position was further clarified: Every country should have limits (ceilings) on their individual gold holdings. The reasoning the Fed gave for their position was four-fold:
There was no urgency to allow free market activity on the gold price to support central bank balance sheets because countries had relatively easy access to “borrowing facilities” or could even sell their gold or use it as collateral for loans.
The gold issue should not be discussed separately. The “desired shape of the future world monetary system” may be “prejudged” if the policy on gold were decided in the absence of a consensus of that system.
It was believed that France and other countries were striving for a higher gold price in order to increase the “relative importance of gold in the monetary system.”
Higher gold prices would allow countries to revalue their gold holdings, as France had already done at the time. This would result in massive “liquidity creation” and frustrate efforts to keep inflation under control.
Posted over at GATA.org, the latest edition of Things that make you go Hmmm… by Grant Williams explains how gold and silver market manipulation is no longer the realm of conspiracy theorists. The LIBOR manipulation scandal has proven that the financial elite are capable of exercising long-lasting, inconspicuous maneuvers to prolong the illusion of fiscal integrity. Even the main-stream media is picking up on this as seen in this CNBC interview with Cheviot Asset Management Investment Director Ned Naylor-Leyland:
CNBC Asia interviewed GATA’s Chris Powell regarding central bank intervention in the gold markets and their motives behind their actions. They’re able to suppress the price using paper instruments that are supposed to have physical gold backing, but do not. He estimates that 70-80% of all the gold people think they own doesn’t really exist! See the CNBC interview here.
June 13, 2012
In his letter to subscribers today, Ted Butler has finally come to the conclusion that the U.S. government is not only aware of JP Morgan’s manipulative short positions in the silver commodity futures market, but also intent on allowing them to continue to suppress the price of silver using those paper derivative positions. Read more about it here.
April 30, 2012
Today, when the gold and silver prices were slammed at the New York NYMEX open, the gold price was instantly down about $15/ounce (1%). For those precious metals investors who see this occur so frequently, they’re used to seeing the prices manipulated in such a manner. But the main-stream media outlets still refuse to report the issue objectively. The Wall Street Journal reports the incident as the result of a “fat finger” trading entry – a simple human error of sorts.
On the other hand, Russia Today’s Lauren Lyster interviews Bill Murphy of GATA on gold price manipulation and specifically mention JP Morgan as the institution behind the futures market rigging.
April 21, 2012
In this interview, Jim Rickards, author of Currency Wars, gives some insight on the intentions behind central banks’ desire to see gold’s price rise, but in an “orderly way.” That is, the central banks manage the price so it doesn’t explode to the upside violently. Overall, however, a slow and steady rise in the gold price achieves their objective of debasing the paper currency, thus enabling debt to be paid off easier and also allowing exports to increase GDP.
In the April issue of The Casey Report (subscriber protected), Casey wrote an article comparing the current gold bull market with that of the 1970’s. He also took up the issue of precious metals market manipulation. While he doesn’t dismiss the idea outright, he does ask some important questions, which he believes need answering.
In response, here is an article from James Turk entitled, Some Answers to Doug Casey’s Questions, which discusses in some detail, the motives and methods behind the precious metals manipulation scheme.
And, weighing in with their grand arsenal of proof, GATA responds too.
April 7, 2012
Here’s Mike Maloney interviewed on Russia Today where the gold and silver price suppression schemes are discussed. Gold leasing by central banks and Futures paper contract selling are among the concepts reviewed.
April 6, 2012
CNBC has interviewed Blythe Masters, Head of Global Commodities at JP Morgan, and discusses the speculation of precious metals manipulation.
Masters indicated that JP Morgan doesn’t hold the positions for itself, rather they are client positions. In this GATA dispatch, Chris Powell takes up the charge that this is indeed the truth and that the client JP Morgan is working for is actually the Federal Reserve.
The beneficiary of such manipulation is any entity which owns assets based on fiat currencies. It should be understood that a rising price of gold in terms of US dollars is indicative of a weakening dollar. So, that’s one of the primary motives for these institutions to suppress precious metal prices – to keep up the appearance of a strong dollar, which maintains their dollar-based wealth.
In addition to the video and audio links below, there have been some excellent articles written and for those that prefer to read about the manipulation, here are a couple suggestions: