View Full Version : The Manipulation of Gold Prices

6th December 2008, 20:58
The Manipulation of Gold Prices ...


December 05, 2008 – Comments (11)

... is so very obvious. Anyone who follows the daily charts as I do will see that like clockwork gold and silver are hammered southward minutes after the 8am NY open day after day after day after day ... only to be bought back on the overseas markets so they can do it all over again on the COMEX. Those who follow my work also know that I track the long and short gold positions of the major investment banks on the TOCOM, the Tokyo exchange, where parties in transactions are actually listed by name (I know, a novel concept). The article linked here does a great job of explaining / positing what is going on behind the scenes that no one seems willing to talk about.



Rarely was there ever a serious short-squeeze. Rarely, that is, until Friday of last week when the deliveries demanded by non-leveraged long buyers reached record levels. In spite of an avalanche of complaints from gold and silver investors, the CFTC (Commodity Futures Trading Commission) has never bothered to audit even one vault to see if the short sellers really have the alleged gold and silver they claim to have. There is a legal requirement that, in every futures contract that promises to deliver a physical commodity, the short seller must be 90% covered by either a stockpile of the commodity or appropriate forward contracts with primary producers (such as miners). Inaction by CFTC, in the face of obvious market manipulation, implies a historical government endorsed price management.

Things, however, are changing fast. As previously stated, the first major mini-panic among COMEX gold short sellers happened last Friday. As of Wednesday morning, about 11,500 delivery demands for 100 ounce ingots were made at COMEX, which represents about 5% of the previous open interest. Another 2,000 contracts are still open, and a large percentage of those will probably demand delivery. These demands compare to the usual ½ to 1% of all contracts.


The fact that this backwardation is hidden from the public eye is not surprising. In spite of the ostensible existence of a so-called “London fix”, 96% of all OTC transactions are secret and unreported. The transactions happen solely between two parties, and are done opaquely, in complete darkness. The current London fix may well be just as fake as the bank interest rate reports that comprised LIBOR proved to be, just a few months ago.

It won’t matter much if you purchase gold at $750, $800, $850, $900 per ounce, or even much higher. All of these prices will be looking extraordinarily cheap in a few months. The price of our pretty yellow metal is about to explode, and it is probably going to soar, eventually, to levels that not even most gold bugs imagine. COMEX gold shorts will be playing the price a bit longer, in an attempt to shake out some remaining independent leveraged longs. Once that is finished, however, and it will be finished soon, the price will start to rise very quickly.

7th December 2008, 07:32
Speaking of "will see that like clockwork gold and silver are hammered southward minutes after the 8am NY open day after day after day after day ...", you might find some answers in the following article, although a lot of it went over my head..

Here is a taste of it..


Table 1. Statistics for the three sessions and the StreetTracks Gold Trust

Most of the returns reported in Table 1 above are in units of percentage that most of you should be familiar with. To be specific; subtract one from the raw return, and then multiply that result by 100 to get percentages.

Session one

Session one is the beginning of my trading day and starts when the New York Stock Exchange closes for business (4:00 PM New York time), and ends when the next London AM Gold fix is reported. The return for this session, denoted by r_1(i) is the ratio of the London AM fix, divided by 10 times the closing price of the GLD ETF observed at the start of the session. I also refer to this as the "Asian" session.

Session Two
This session begins when the London AM Gold fix is reported and ends with the reporting of the London PM Gold fix. The return for this session, denoted by r_2(i) is the ratio of the London PM Gold fix divided by the London AM fix. I also refer to this as the "London" session.

Session Three
This session winds up my trading day and starts with the London PM Gold fix and ends when the New York Stock exchange closes (4:00 PM New York time). The return for this session, denoted by r_3(i) is given by the ratio of 10 times the closing price of the GLD ETF divided by the London PM fix from earlier the same day. Note that this session ends exactly one day after the first session begins. I also refer to this as the "New York" session.

The original article is located here ... http://www.gold-eagle.com/editorials_08/peterson102908.html

7th December 2008, 16:13
thanks for the article, but my brain refuses to work that hard...it likes easy info. ...like.."silver just jumped to $400.00 an oz" it can understand that.

7th December 2008, 16:51
Totally agree.. :lol:
I read the article to "try" to get the gist of it but just couldn't cope with the maths .. My brain went on "freeze" reading that section..

9th December 2008, 10:08
Makes sense what Conrad is saying...

yesterday the USD was down over a penny. Gold up, silver up, oil up, all major indexes up. Opening the spigot.

Today the USD is up, and now gold is down, silver down, oil down, all major indexes down. Closing the spigot.

I think Conrad hit this nail right on the head.

This is the only way to explain why markets/gold/silver will skyrocket one day and completely crumble the next day.