The Manipulation of Gold Prices

The Manipulation of Gold Prices

seekingalpha.com

Many venerable names in banking agree, although none have gone so far as to take their thoughts to the natural conclusion. Both JP Morgan Chase's and Citibank’s analysts, for example, are predicting a huge rise in the price of gold. That is interesting because GATA has come up with fairly compelling evidence that JP Morgan Chase (JPM) and HSBC (HBC) may have been big COMEX naked short sellers in the past.

Goldman Sachs (GS) is also a huge bullion bank, which allegedly is heavily involved in downward gold price manipulation. However, this month, both HSBC and GS took lots of deliveries of gold from COMEX. Given the size and bureaucracy at such firms, it is certainly possible for the majority of traders to be entirely honest, while others, at the same firm, may be totally corrupt.

More important, however, than dwelling on the accuracy of conspiracy theories is the fact that huge international banking firms normally do not take metal deliveries from futures markets. They normally buy on the London spot market. The fact that they are demanding delivery from COMEX means one of two things. Either the London bullion exchanges have run out of gold, or these firms are finding it cheaper to buy gold as a “future” than as a spot exchange.

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I recommend the people of ATS read this article and read it in full. I recommend people buy gold even if its in the 1/10 oz form buy whatever you can. The conspiracy of price manipulation to the downside is no longer just a conspiracy it is real and it is coming to and end. With the big banks taking actual delivery of the gold on the COMEX this is going to be a big shift from before. They used to short the hell out of gold to keep it low. Now these same people who have been making gold cheap as far as the paper price have been buying the physical in mass and holding it. Soon they will quit shorting all together and gold it going to skyrocket. Read this article it could save you alot of money that would be otherwise lost to inflation.

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reply to post by mybigunit


You should take a look at this article:

Red Alert: Gold Backwardation!!! Talk about scary.

Given the whole thing though I continue to be amazed at the price of gold and silver. I track it in real time with ExactPrice and at this moment they're sitting at $755.90 and 9.55 and ounce. It's amazing to me and with the way the deliveries are going at the COMEX this month I can only imagine that it should be rising! Not falling like it did this morning. Weird times.

Reply to anonymous....

That is an interesting article. I wonder if he feels that gold is going up or down because of this deal? Can you give me some insight?

www.safehaven.com...

I have not noticed the price of spot gold go over the price of the next futures delivery yet. (ie, Dec Gold > Feb Gold) But if it does happen ("backwardation" vs "contango") then it the supply of physical gold for delivery will be considered tight....and the price has to rise relative to the back months to stimulate greater supply to be delivered. If this were to happen on a sustained basis then prices would have to rise further to achieve a price equilibrium (supply & demand). So far tho the dollar (and treasury securities) has been the "safe haven" that the world markets have demanded. Deflation (opposite of inflation) is the chief reason that gold has not been able to sustain a rally being the initial panic phase. Deflation of assets ("deleveraging") has trumped the huge increases to the Fed's balance sheet (read, "printing of money"). In fact, a lot of this money simply disappeared into the black hole of debt deleveraging and will never get loaned out (via fiat $ystem); some of the additions can be removed later ("sterilized") but still....a good portion of the recent debt taken on by the Treasury for these "bailouts" will eventually have an inflationary effect (ergo, gold will go up). But dont forget the inflationary impact of money is kinda like the physics formula, F=MxV, whereby Force = Mass x Velocity or acceleration but in this case inFlation = Money (monetary base expansion) x Velocity (of money). And as we all know, with the "credit crunch" banks are reluctant to lend (customers or even each other) and thus the Velocity of Money has shrunk considerably while the Supply of Money has expanded greatly. When the "V" kicks in - watch the "F" Out! The next question is....will there be a recall or new currency?