Gold & Silver Market Manipulation

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.

January 19, 2014

Paul Craig Roberts and Dave Kranzler give an excellent review of “The Hows and Whys of Gold Price Manipulation.”

December 1, 2013

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.

September 25, 2013

The CFTC announced today that they are closing their 5-year investigation of alleged silver market manipulation. Their basic conclusion is summarized by the following quote: “Based upon the law and evidence as they exist at this time, there is not a viable basis to bring an enforcement action with respect to any firm or its employees related to our investigation of silver markets.

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.

October 25, 2012

If you’re going to get into or stay into gold and silver you have to know what you’re up against — which is to say you’re up against all the money and power in the world.” That is a paragraph taken from this most excellent article posted over at GATA by Chris Powell. The article discusses:

  • 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.

August 20, 2012

The makers of the animated movie, Silver Circle, have provided a comprehensive summary of the silver price suppression in pdf format.

August 11, 2012

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:

  1. 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.
  2. 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.
  3. 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.”
  4. 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.

Arthur Burns’ memo provided below from Scribd for further review.  It’s also available at GATA.

Fed Arthur Burns on Gold 6 3 1975

July 10, 2012

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:

July 3, 2012

Now, after Barclays has admitted to their involvement in manipulating the LIBOR benchmark rate, CNBC brings up the manipulation of the silver market (around the 9:27 mark) saying “And they are!

June 27, 2012

Here’s a comprehensive article from GATA’s Chris Powell giving an historical account of the gold price manipulation: The why and how of gold price suppression.

June 22, 2012

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.

Part two of this interview can be found here.

April 13, 2012

James Turk - GoldMoney, Free Gold Money ReportDoug Casey - Casey Research

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.

March 30, 2012

The state of South Carolina has recently published a report on gold and silver investing that admits, “The Federal Reserve, The London Bullion Market Association, JP Morgan Chase, and HSBC Holdings have practiced fractional-reserve banking and engaged in naked short selling causing artificial price supression.” (See the bottom of page 1 within the pdf report, Proviso 89.145 Gold/Silver Investment report to the General Assembly located on the Office of the State Treasurer’s Transparency Center web page.)

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:

March 17, 2012

Here’s Ted Butler talking with James Puplava on the Financial Sense Newshour explaining how the manipulation of the precious metals are accomplished, with primary emphasis in the silver market.

Listen to the interview.

Read more on Mr. Butler’s investigation in this interview.

February 27, 2012

Here’s Chris Powell of GATA expanding the discussion of gold manipulation:

February 18, 2012

Here’s Bill Murphy of GATA explaining, in brief, the gold cartel and its ongoing efforts to suppress the price of gold.

January 24, 2012

See this page for a video series going deep into the details regarding precious metals market rigging.