Is The Gold Market Really Rigged?

Dedicated to .... ( *whistle2* )

Posted on MoneyWeek.com Is The Gold Market Really Rigged?

• I've been looking at some charts and an astonishing pattern has become apparent. It's a pattern which, if you'd traded it methodically, would have earned you 1% every 20 days over a period of 24 years. That compounds to a staggering 2,050%!

• What is more astonishing is how this pattern has accelerated since 2007. Sell gold in the morning, buy it back in the afternoon, and a cool 1.78% 20-day profit will be yours:

• Finally, before I go, here's an interesting statistic for you: the first fixing was in September 1919 when the gold price was £4 18/9d per ounce. It's now more than £600. My, how well sterling has maintained its purchasing power. Here's a chart that tells you what a rotten investment the British pound has been ever since we came off the gold standard in 1914. It comes from a House of Commons research paper (03/82 11 Nov 2003 [pdf]) – so they know.

Now this very same posting was highlighted by Jesse: Is Gold and the Balance of Power Shifting from the West to the East?

Quote:

• We might agree with the surmise that it involves the steady selling of leased gold from the West into the gold markets, but that could only be confirmed by an audit, and an admission from some large central bank that they have been obligating increasingly large amounts of their inventory into the public markets in a previously undisclosed manner.
  
  The transaction costs are a problem if you are standing at the retail counter, we fear, so don't get any ideas about playing this trade. Its a sinecure for the big boys only, who can take advantage of market inefficiencies by trading in large, ever increasing volumes, like the whiz kids at LTCM did until they blew their trade book up.
  
  Oddly enough, the data from the Office of the Comptroller of the Currency report on Derivates shows that only two banks, JPM and HSBC, are holding almost $124,000,000,000 in gold derivatives between them, approximately 98% of all gold derivatives in the world.
  
  At $850 per ounce, that represents about 145,882,353 ounces of gold.
  
  As the tides of monetary bubbles recede, curiosities are turning up on the beach every day.

The chart and table provided by Jesse speaks volume on the issue! Do give Jesse's blog a read. :)

And do try google the phrase "Is The Gold Market Really Rigged? "

Shocked?

Another worth while reading is from Rob Kirby: Fed Manipulating Market Prices, Gold, Oil and Bonds

• In short, says Fell, "don't measure the Dollar against the Euro, or the Euro against the Yen, but measure all paper currencies against gold, because that's the ultimate test."
  
  Fell's admission coupled with the recently unearthed account of the Fed's game plan shows that gold “is” and always has been feared as competition for the U.S. Dollar and a game plan has long been in place to thwart it. This explains why economic data has been falsified and the price of gold has been surrepticiously managed and interfered with by the United States Treasury and the Federal Reserve.
  
  The mounting evidence is this regard is so compelling that from this point forward any ‘economist' attempting to explain our current situation without prefacing their explanation with an EXPLICIT ACKNOWLEDGEMENT that our capital markets are not free and are in fact RIGGED by officialdom – their analysis is not worth the time to read it. In this regard, perhaps never have more prescient words been uttered than GATA's Chris Powell in Washington in April, 2008 – when he opined, There are no markets anymore, just interventions .
  
  The recent decoupling in price of gold as measured by the spread between the futures price and the cost to obtain physical ounces is a stark reminder that smart money is beginning to repudiate fiat money by seeking tangible ownership of goods perceived to posses value instead of derivative ‘promises' to deliver the same.