This past week, we saw that the Bank of Nova Scotia was charged by the Commodity Futures Trading Commission with multiple acts of spoofing in gold and silver futures between June 2013 and June 2016. Traders placed orders to buy or sell precious metals futures contracts with the intent to cancel the orders before execution, the CFTC said.

So, the tin-foil hat wearers are back out in full force screaming about how this market rigging has caused gold to collapse over the last seven years. Unfortunately, anyone who believes this is simply not dealing with the facts of any of the supposed “manipulation” cases. You see, believing that these manipulation cases caused the gold market to drop from is 2011 high is no different from believing that a paper cut can cause someone to bleed to death.

I have discussed my thinking on this matter before, and I think it is necessary to reiterate my perspective. Last year, Gold-Eagle reached out to me to write a section on market manipulation for their e-book on gold. Within that section, I addressed this “paper cut” argument:

The second method through which they attempt to prove wholesale manipulation is to point to evidence of small price manipulations and suggest that these "paper cuts" have caused the market to bleed to death. None of their supposed "proof" provides even a shred of clear evidence that the gold market was manipulated to drop over 40% and that the silver market was manipulated to drop over 70%.

The latest supporting "evidence" to which the manipulation theorists proudly hang their hat is the recent news about Deutsche Bank's admission of "manipulation." Everyone now assumes they have found the smoking gun which "caused" silver to drop by over 70%, which proves they were not wrong to be bullish all the way down. Of course, they can now "prove" that everyone was cheated out of their money due to this "manipulated" decline of 70%. Right?

Wrong. This was not the first case regarding market manipulation, nor will it likely be the last. But, what many do not point out is that the manipulation dealt with in these cases is not the "manipulation" to which all the analysts have been pointing to explain why silver lost 70% of its value when they did not see it coming.