Gold had a horrendous year in 2013 disappointing many of its supporters; however, 2014 started brightly bringing with it much hope for an attempt at achieving new record highs. Gold prices moved quickly from the $1200/oz level to flirt with $1400/oz by mid-March. The summer brought some confusion with gold rallying and falling without much in the way of conviction in either direction. As optimists we can argue that the summer doldrums arrived to take the steam out of the market and that better times lie ahead. The pessimists suggest that gold is struggling to gain some traction and will head lower in the near future, so we will take a brief look at some of the factors that affect gold’s movements. Factors for consideration regarding the purchase gold: Back in June 2006 we listed some the reasons for buying gold as follows: No new large discoveries of gold deposits dampening supply Lack of previous investment for gold exploration It takes up to 10 years to bring a new mine to production Falling gold production worldwide adding to its scarcity Gold EFTs take gold off the market thus reducing supply In the last Bull Run 70s to 80s gold prices increased 20 fold Metrics: DJIA vs. Gold, about 19ozs buys the Dow Jones, it has been 1:1 in the past and could be again in the future. Assuming the Dow Jones remains above 10,000 then the gold price could hit $10,000 Gold at its previous high of $850 adjusted for inflation puts the gold price at $2000 plus Geopolitical uncertainty, a nuclear Iran creates world tension which pushes up the price of gold A Dictatorial South America imposing restrictions such as increased taxation and nationalization will deter investment and reduce gold production India is growing and the sleeping dragon of China has awoken, their hunger for gold will drive gold prices higher Internet: information travels around the world in a nano-second, reactions to news, true or false, will add to the volatility of the gold price Web trading: increasing every day, resulting in the trends being more exaggerated than ever before The mania that I traded in during the last Bull market will be nothing compared to the coming Gold price explosion and the maniacal actions of traders and everyday people in the precious metals sector.
This post was published at Gold-Eagle on September 2, 2014.
Gold and silver are at a critical juncture – either they break down to new lows soon or a major new uptrend is about to start. Which is it? – while we cannot be 100% sure either way, we can certainly attempt to figure which way they are likely to break. Many have been tempted to conclude, because of the dismal response to date by the Precious Metals to the growing geopolitical tensions in various regions of the world, that this is an indication of intrinsic weakness, and that they are therefore destined to break down soon, but there is another way of looking at it. The vast majority of investors have no idea just how dangerous the worsening situation with Russia really is. The West is looking for trouble with Russia – and like most people who go looking for trouble, they are going to find it – this is a situation that could quickly lead to a World War. They have made it obvious that they are not interested in compromise – they want to overcome and subdue Russia, and the consequences are likely to be grave – especially for Europe which is on the front line. We have gone into this in detail on the site and will not look at it further here, but it deserves to be mentioned at the outset, because this could drive a meteoric rise in Precious Metal prices – and it could start with a big move that seems to come out of nowhere. With this in mind let’s now move on to look at the latest gold charts. We will start by looking at gold’s long-term chart, as we need an overall perspective from the start. On gold’s 15-year chart we can see that despite the rough time it has had over the past 3 years, it still hasn’t broken down from its long-term uptrend – and if this uptrend is valid, then it is clear that a huge upleg could be in prospect from here. If it were to run to the top of its major uptrend channel again, it would result in a massive increase in the price to the $4000 – $5000 area. Of course, the pattern that has formed over the past year could be a continuation pattern to be followed by a breakdown and another steep drop, but this doesn’t look like it is on the cards as it would require a significant easing of geopolitical tensions, considered highly unlikely, and a deflationary implosion, which the money printers will ‘move heaven and earth’ to avoid. Volume indicators on gold’s long-term chart look positive relative to price, with Accum-Distrib line in particular looking strong. This chart makes plain that we are at a critical juncture here.
This post was published at Clive Maund on September 1st, 2014.
In this Weekend Report I’d like to look at some of the Precious metals stock indexes as there was a fairly strong reversal off of the previous lows made over the last two months. It was one of those inflection points where the PM stock indexes could have gone either way. It just so happened that they all had a decent bounce off the lows with the last two days being up. We’ll examine some of the PM stock indexes in a minute but I would first like to show you the BPGDM as it’s still on a buy signal that was generated three weeks ago. The reading of 46.67 is the highest point the BPGDM has reached in about year so there is some underlying strength. The BPGDM is above the 5 dma and the 5 dma is above the 8 dma so the buy signal is in place. Also the price action is still finding support at the neckline of the potential one plus year inverse H&S bottom.
This post was published at Gold-Eagle on September 2, 2014.
September is the hottest month of the year for gold prices, rising on average 3% over the past 20 years. As the yellow metal tests hovers off 2-month-lows, Bloomberg notes that “Indian jewelers and dealers will be stocking up in the coming weeks,” ahead of the festival period, which runs from late August to October (andis followed by the wedding season) when bullion is bought for part of the bridal trousseau or in jewelry form as gifts from relatives. As GoldCore’s Mark O’Byrne notes, “a lot of traders are aware of this trend towards seasonal strength… They tend to buy and that creates momentum.” Some color on the week’s Precious Metals Trading from Alasdair Macleod of GoldMoney, The pattern of trading in precious metals changed for the better this week. After London’s bank holiday on Monday, for the first time in a long time the market opened in London’s pre-market with higher prices. This indicated Asian or Middle-Eastern physical demand was returning to the market. Predictably, prices drifted lower during London hours as paper trading took over, and all the gains were more or less lost by close of play on Comex in New York. It was a similar story on Wednesday. Yesterday, (Thursday) started the same way, but this time the move gained more traction; but volumes remain pitifully low, in common with open interest. Today this pattern was not repeated with gold kicking off unchanged on overnight levels. However, gold is up $15 on the week and feels more firmly based.
This post was published at Zero Hedge on 08/31/2014.
The ‘New’ Silver Fix and the Powers That Be! With Remarks On Texas Governor Rick Perry & Texas Gold! Accompanied by a Warning to Jewelers! Presented August 2014 by Charles Savoie Effective mid-month August 2014, the old silver ‘fix’ has been replaced by a new silver ‘fix,’ run jointly by the CME Group, owner of the COMEX, and Thomson Reuters. But has anything of real substance changed? It certainly has not. The new ‘fix’ was awarded by the LBMA, London Bullion Market Association, composed of neer-do-well entities including Barclays Bank, HSBC Bank, Goldman Sachs, JP Morgan Chase Bank, and additionally Bank of Nova Scotia, Credit Suisse, Deutsche Bank, Mitsui & Company, and Paris based Societe Generale. For 116 months I’ve routinely made details available about a unique organization known to few as ‘The Pilgrims Society.’ Persons who haven’t become aware of this group can find details on Google search. If you especially want the monetary details relating to this group and precious metals, add my name to theirs in the search box or read ‘The Silver Stealers’ documentary. Therefore, I won’t go into another basic explanation of The Pilgrims Society here. The ringleaders of the megabanks above have all had heavy representation in The Pilgrims Society. The rest have been and remain represented in interlocking groups such as the Trilateral Commission and the Bilderberg conferences – groups founded by Pilgrims Society members. I am not among the commentators you can read the fastest, because of the nature of these presentations, in depth examinations must be made to substantiate my claims. However, just to make reference to this alleged ‘new’ silver fix, and how bogus it is, I offer this brief report. An oft repeated phrase most have heard, and which drives home how dismal this old world often is, has it that ‘the more things change, the more they remain the same.’ We will not get into a long documentary such as ‘Who Controls The Gold Stealing New York Fed Bank,’ released last February, but will let a few points suffice. This is a mere matter of a group of gangsters who tossed the ball to others in their racketeering organization. Mitsui Global Precious Metals, a Silver Users Association member, is a subsidiary of Mitsui & Company – a Trilateral Commission interest. The Mitsuis and the Rockefellers have been associates since before 1907 when the Japan Society was founded by Rockefeller-Vanderbilt liaison Lindsay Russell as another offshoot of The Pilgrims Society. The Japan Society in fact was forerunner to the Trilaterals, founded 66 years later, but represented an expansion into Britain and Europe, in response to Bilderberg not including Japanese industrialists and bankers. Meaning that Bilderberg is over-rated compared to the Trilaterals! However, they both sprang from this older organization which remains in the shadows.
Unlike the normal business cycle that allows for a recession every few years to clear out the mal-investments and keep the system functioning properly, the current cycle has been artificially induced with money that has unseated the foundation of good financial practices and caused a series of bubbles that must pop at some point. When this happens the business cycle will be heavily damaged and will take many years to reestablish some type of normalcy. If you think of a cycle as a pendulum swinging back and forth, you must realize that the further it swings to one side, the further it will swing to the other to balance itself. That is what we must realize with the current bubble boom in the financial sectors. The further out of balance they get, the further they will need to swing back to preserve equilibrium. When these bubbles finally pop, the offsetting swing will be monumental. A normal recession of a few years will be exaggerated to a multi-year disaster. These are the type of conditions that usher in depressions of long duration. This bubble induced mania is far beyond anything experienced in human history and will result in an equally disastrous financial contraction destroying paper assets and making hard assets desirable and difficult to acquire in the aftermath. In this type of situation, hard assets and a wide knowledge base are as good as it gets. The ownership of capital equipment that produces necessary consumer goods and the ability to finance yourself internally combined with sufficient knowledge to use these resources will provide a safe harbor to get through the difficulties that arise. Becoming your own bank requires the ability to store financial assets such as precious metals and diamonds that have universal value. This is one of the few ways to store wealth that can survive such market destruction.
U. S. markets and leading stocks continue to show strong and positive action, mostly early in the week. It really has been a great August, and that is rare, but it just shows that you must always be paying attention to things and can’t rely wholly on historical or past norms. Does this mean the usually strong fall period will be weak, or does it mean it will be extra strong? Only time will tell and I will be keenly watching for the answers. As for the precious metals, gold and silver tried to move higher a couple times this past week only to reverse and resume the dominant trend, which remains lower.
This post was published at Gold-Eagle on August 30, 2014.
In anticipation to the launch of the Shanghai Gold Exchange international board, that presumably will start shifting gold pricing power from West to East, in this post we’ll examine the historical trading volumes of the Shanghai Gold Exchange (SGE), the Shanghai Futures Exchange (SHFE) and the COMEX. By charting the weekly volumes we get a clear view of the size of these exchanges. (In the London Bullion Market most likely the largest volumes are traded, but because this is an OTC market that doesn’t disclose much data we can’t use it in our West – East comparison.) From now on I will publish the trading data of all three exchanges after every trading week to closely monitor if the gold market’s center of gravity is moving to Asia. The largest precious metals futures exchange in the world is the COMEX located in the US. This exchange started trading silver futures in June 1963 and gold futures in December 1974. Futures are a derivative of an underlying asset, in this case precious metals, as they are traded on margin. Through futures traders can take on positions in precious metals but only deposit a fraction, the margin, of the total cash value in advance. This provides leverage; price movement is magnified relative to the margin on deposit. Futures can be used, for example, to hedge or speculate. Historically the COMEX has been the dominant futures exchange in the world and plays a significant role in the pricing of precious metals.
Willing or unwilling; we all now dwell in the fantasy-realm previously dubbed ‘the Wonderland Matrix’. For the small minority who still retain mental awareness; this all-encompassing illusion of propaganda is like a thick fog which blankets reality. However, for the legions of brainwashed drones in our societies, the Wonderland Matrix is reality. Nowhere is this blanket of fog thicker than in the precious metals sector. Here perversity is a way of life, as the genesis of the Wonderland Matrix began with the fantasy-world constructed here by the propaganda of the Corporate media. As must inevitably occur with such serial perversion (i.e. consistently reporting the precise opposite of reality), these perverse lies soon begin to contradict each other. We see a glaring example of this by simply viewing the Corporate media’s ‘perversion (2014 version)’ versus its ‘perversion (2013 version)’. The insanity of last year began shortly after the Cyprus Steal, when a corrupt Western government rubber-stamped the first ‘bail in’. This, in turn, opened the floodgates to the unlimited confiscation (i.e. theft) of paper assets by our corrupt governments, as these puppet-leaders mumbled in unison about how this (act of theft) was now a ‘precedent’.
Diversifying a portfolio is the first thing they teach you about investment, especially for retirement plans. With these funds, security is often prioritized over quick, short term speculation. For that reason, precious metals and other commodities have now become preferred choices for retirement plans for individuals. Traditionally, this is not allowed for qualified plans, but things have change and now investors are looking at innovative retirement plans for individualsto invest in commodities. Why Precious metals work for retirement plans for individuals? Retirement plans for individuals are often all about flexibility and security. Unlike a traditional 401k account with an employer, people look at retirement plans for individuals as it allows them to take better control of their retirement funds. Precious metals or commodities work because trading can be done quicker with less legality involved than other investments, say real estate for example. A person can also choose to play safe with a buy-and-hold strategy, which can guard their nest egg against inflation. He or she can also choose to speculate and trade more often when opportunities arise.
The pattern of trading in precious metals changed for the better this week. After London’s bank holiday on Monday, for the first time in a long time the market opened in London’s pre-market with higher prices. This indicated Asian or Middle-Eastern physical demand was returning to the market. Predictably, prices drifted lower during London hours as paper trading took over, and all the gains were more or less lost by close of play on Comex in New York. It was a similar story on Wednesday. Yesterday, (Thursday) started the same way, but this time the move gained more traction; but volumes remain pitifully low, in common with open interest. Today this pattern was not repeated with gold kicking off unchanged on overnight levels. However, gold is up $15 on the week and feels more firmly based. Measured by deliveries on the Shanghai Gold Exchange, Chinese demand is increasing, with last week’s figure rising to 46 tonnes, having increased every week in August. So far this year over 1,200 tonnes have been delivered, and the extension of trading and therefore potential demand into the Free Trade Zone is due to kick off in September. The chart of the gold price and open interest on Comex is shown below.
This post was published at GoldMoney on 29 August 2014.
Nothing of particular interest was shown in the Comex reports from yesterday. Tomorrow we bid adieu to the August contract. Time to move our eyes to the September month which is active for silver but not gold. The precious metals are unfortunately very politicized in this currency war. That is both a risk, and an opportunity. There was intraday commentary on the metals here. There are obviously two metals markets, one of paper, and one of real metal delivered and taken. One is most expressed in the overnight market with trading in Asia and Europe, and another that starts after the New York opening bell.
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.
You’ve barely heard from me in The Dollar Vigilante (TDV) Blog for the last few years in terms of my picks for gold and silver stocks. If you aren’t a TDV newsletter subscriber, where I comment nearly weekly on the markets and on precious metals stocks you’d think I’d all but disappeared. However, Jeff Berwick and I have been on the same page that the market wasn’t ready for a heavy focus the last few years, and I’ve been helping our subscribers maintain and manage their portfolios and develop their broader macro-economic outlooks (which included a bullish call on stocks up until the end of 2013 that was not popular with most subscribers). Meanwhile, Jeff has done a great job in focusing on other areas that have had massive growth including bitcoin (up from $7 to $500 since he began talking about it in 2011) and now medical marijuana stocks, one of which, Organigram, just delivered a double since it was brought to TDV and TDV Golden Trader subscribers just a few weeks ago and went public yesterday at more than double the price our subscribers got into it at. But, as Jeff has recently stated, we believe now is the time to buy gold and silver shares, if for no other reason because they’ve been abandoned by even the value investor. In the TDV portfolio, we have about 18 companies, and we are working towards rounding it out at 20 names. Two of them have disappeared in takeovers in recent months: Osisko Mining and Papillon Resources. The buyers are companies that are already included in our portfolio (i.e. Agnico Eagle, Yamana, and B2Gold) so we have not lost the assets altogether. But it gave investors a bit of liquidity and nice gains for those who bought along with us, as we suggested, and it left room for us to bring in a couple of new picks. I will be telling you about them soon (of course subscribers will get first access – you can subscribe here). Importantly, the timing is good. What we see now is that most gold/silver shares have been bottoming for over a year. Some have been rallying through the year, like Agnico Eagle.
Does the following contrast sound familiar to you? Mainstream media headlines, mostly based on either mainstream economists or large financial institutions, report continuously how weak the precious metals market is; they hasten to remember readers how the bull market had burst in 2011 and that much lower prices are just around the corner. In their view, after peaking in 2011, gold and silver are in a clear bear market. On the other hand, writers and analysts that are non-mainstream (most of them non-Keynesian) consider today’s gold and silver market as a long correction in a gigantic secular uptrend; they expect (much) higher prices in the years to come. The interesting thing is that everyone is looking at the same data and charts. The key question is whether the gold market is correcting in a secular trend or the bear market is here to stay(till the next cycle starts). In order to answer that question, the team at ShortSideOfLong did an excellent job comparing the ongoing correction in gold and silver with previous corrections. Based on purely chart observations it seems feasible (with a high probability) to come to a reliable answer. One should note that the data in the following two charts come from the period after 1971, as that was the year when gold started to trade in a ‘free market’ (after US President Nixon closed the gold window on August 16th 1971). The first chart shows different gold bear markets since 1971. The conclusions from the chart come from the analysts at ShortSideOfLong:
Over at ZeroHedge, Jim Kunstler’s latest post on his forecast for 2014 is a MUST READ!! Readers should greatly benefit from his astonishingly honest take on everything from the shale oil sham to last year’s gold slam. He even gets into Obamacare, Bitcoin the Euro crisis and the middle east.
Excerpt: Paper and digital markets levitate, central banks pull out all the stops of their magical reality-tweaking machine to manipulate everything, accounting fraud pervades public and private enterprise, everything is mis-priced, all official statistics are lies of one kind or another, the regulating authorities sit on their hands, lost in raptures of online pornography (or dreams of future employment at Goldman Sachs), the news media sprinkles wishful-thinking propaganda about a mythical “recovery” and the “shale gas miracle” on a credulous public desperate to believe, the routine swindles of medicine get more cruel and blatant each month, a tiny cohort of financial vampire squids suck in all the nominal wealth of society, and everybody else is left whirling down the drain of posterity in a vortex of diminishing returns and scuttled expectations.
In a recent interview, Kyle Bass, the well-known founder of Hayman Capital, revealed that “There’s no real way out” of the current economic situation that has resulted from the fiscal profligacy of the central banks. And later in that same interview, when asked his opinion of what the ‘average investor’ should be doing in this environment, Mr. Bass could only make the suggestion that they “should be very careful doing what the central bankers want them do.” With low yielding interest rates, the central banks are pushing average investors into taking on more risk with higher yielding equities.
But it’s even worse than that. Fundamentals don’t seem to matter much in these uncharted economic waters. Why? Because as Barry Ritholtz has so thoroughly outlined in his Big Picture analysis of the markets – they’re all rigged! The average investor is at the mercy of the big banks and crony capitalism.
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: