CNBC prods World Gold Council, CPM Group's Christian about GATA
Are Global Central Banks Manipulating Gold?
By Roshan Vaswani
CNBC Asia Squawk Box
Thursday, March 14, 2013
Gold prices are being kept artificially low by Western central banks and "no one alive" has ever seen the true price of gold, according to Chris Powell, secretary of the Gold Anti-Trust Action Committee.
GATA, an organization co-founded by Powell in 1998, claims that central bankers have been manipulating markets for decades by overstating the amount of gold they hold in reserves to give the impression that there's abundant supply of bullion in order to depress prices. GATA argues that central banks are trying to control the price of gold because of bullion's influence on financial instruments, including currencies, government bonds, and interest rates.
... Dispatch continues below ...
Get the real story about the precious metals
from the Sprott Precious Metals Round Table
Now you don't have to travel to attend a financial conference to hear Sprott Asset Management's precious metals experts -- Eric Sprott, Rick Rule, and John Embry. They held a round-table discussion on February 12 and you can watch it on the Internet. Among their topics:
-- Why are precious metals such a compelling investment opportunity?
-- Why are non-G7 central banks buying gold? Do Western central banks have any left?
-- Why are investors buying as much silver as gold in dollar terms? What does this mean for the price of silver?
-- Is the growing supply deficit of platinum and palladium going to push their prices higher?
To watch the conference, please visit:
According to World Gold Council, an industry body, official reserves of global central banks have grown to more than $12 trillion in 2012 from $2 trillion in 2000. But Powell argues that at least 70 to 75 percent of the gold central banks say they keep in reserves does not exist.
"There's a vast imaginary supply of gold that's been created by Western central banks," Powell told Squawk Box Asia on Thursday. "It is simply just a paper claim on metal that's not there."
In response to a query from CNBC on GATA's views, the WGC said, "GATA has its own views on the factors driving the gold price and the influence of gold market participants. The World Gold Council respects the right of GATA to hold these views but does not share them."
A report released on Wednesday the WGC, which is funded by the gold industry, says the yellow metal continues to be the asset of choice for central banks as they look to diversify away from the U.S. dollar.
"Building gold reserves in tandem with new alternatives is an optimal strategy as central banks remain under-allocated to gold," Ashish Bhatia, manager for government affairs at the WGC, said in a statement.
Jeffery Christian, founder and managing director of commodities research firm CPM Group, was a lot more blunt about GATA, saying, "I think they're outright liars. ... Pretty much what they do is nonsense."
Christian added that he believed there was no conspiracy among global central banks to collude over gold prices and that central banks are "very transparent" about their monetary gold reserves.
CPM Group is a well-known critic of GATA and published a presentation on its website in 2010 called "GATA, You Lie," where they rebut GATA's premise point by point.
Video of Powell's interview is posted here:
Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006:
Or by purchasing a colorful GATA T-shirt:
Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:
Help keep GATA going
GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:
To contribute to GATA, please visit: