Kitco analyst begins to wonder about gold market manipulation


2:50p ET Tuesday, December 18, 2012

Dear Friend of GATA and Gold:

The afternoon metals market roundup by Jim Wyckoff at Kitco News takes note of growing suspicion of manipulation in the gold market. Wyckoff writes:

"Tuesday's major selloff in the gold market, amid no major, fresh fundamental news to move prices so sharply, once again has many market watchers scratching their heads. The past few weeks have seen similar unexpected, and seemingly inexplicable quick downside price moves in gold and silver. Many traders and investors are wondering (and many are frustrated) regarding the role of 'manipulators' in the gold and silver markets.

"Watching, trading, and analyzing the markets on a full-time basis for more than a quarter century, there is no doubt in my mind that bigger players in the market place can and do manipulate markets -- on a short-term basis. The big boys like to catch the market in thin, low-volume conditions so they can have as big of a desired price impact as possible when they execute their bigger trades. Such activity is not exclusive to the gold and silver markets. It happens in nearly all traded markets -- and it is nothing new.

... Dispatch continues below ...


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"What is important to remember is that no individual trader or individual firm can control (manipulate) a market's price for very long. Even the major central banks of the world have tried manipulation in the currency markets (central bank intervention to the tune of billions in currency) with only marginal initial success and not a lasting impact.

"Regarding any longer-term conspiracy to manipulate the price of gold or silver (lower), I cannot say for sure if that is the case or not because I have never had the time to completely research the matter. However, I do know that by looking at the longer-term monthly chart for gold I see that prices are in a solid 11-year-old uptrend and that gold has been one of the best upside market performers of any asset class for the past 11 years. If some big outfit has been trying to manipulate gold to the downside, it has not worked very well for them the past 11 years."

Of course GATA long has addressed the "controlled retreat" of central banks in the gold market and we're not going to belabor it today, but the documentation of central bank intervention in the market remains available to Wyckoff and anyone else who wants to make the time to visit our documentation archive here:

Of special interest recently are two confidential reports by the International Monetary Fund dated 1999 and disclosed by GATA this month.

The first is a survey by the IMF about central bank gold leasing, which concluded that about 15 percent of official gold reserves were on loan in 1999. The amount now is almost certainly much higher. That report is here:

The second is a report to the IMF's Executive Board about transparency in central bank accounting, which discloses that Western central banks objected to reporting their gold loans and swaps because doing so would impair their secret intervention in the currency markets:

Imagine if a Kitco News reporter ever tried to interview central banks about these reports and to interrogate them about their activities in the gold market.

But for the time being we'll have to settle for Wyckoff's musing, headlined "P.M. Kitco Metals Roundup: Gold Down Sharply, at 3.5-Month Low, on Technical Selling, Stops Hit; Manipulation Discussed" and posted at Kitco here:

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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