London Telegraph picks up RBC gold price suppression report


11:35a ET Sunday, June 30, 2002

Dear Friend of GATA and Gold:

The RBC Global Investment Management report
endorsing GATA's assertions of manipulation
of the gold market has crossed the Atlantic
from Toronto to London, where the Telegraph
newspaper has a story about it in Sunday's

The story's use of the word "retraction" is a
bit misleading, since RBC did not "retract"
the report as much as say it represented the
views of one investment manager -- he just
happens to be the firm's best -- and not the
views of the firm itself. No matter. Only a
central banker could miss the point.

The Telegraph story is appended here.

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

* * *

Bank retracts gold price-fixing report

By Edward Simpkins
London Telegraph
Sunday, June 30, 2002

The Royal Bank of Canada has issued a
retraction after a research report by one of
its most senior asset managers appeared to
support the claims of conspiracy theorists
that central banks have secretly connived to
keep the price of gold low.

The eight-page report published as a research
note by the investment division of the bank
speaks of "increasing evidence of
unsustainable gold price manipulation" and
says the evidence of secret price fixing is

The report refers to the practice in the
past, when the price of gold was pegged to
currencies, of central banks dumping gold to
keep the price down. "Today, instead of the
overt action of yesteryear, it is covert
because the market is allegedly free," the
report says.

It goes on to claim that instead of selling
physical gold the banks have sold
derivatives, called hedging, leaving them
owing far more metal than they control and
giving them an interest in the price of gold
continuing to fall.

"The size of the short position, officially
acknowledged to be more than 5,000 tonnes by
the bullion bank apologists, is thought to be
well over 10,000 tonnes and may exceed 15,000
tonnes," the report adds.

The claims were seized on by fringe groups
such as the Gold Anti-Trust Action Committee
which said it showed that mainstream
investors were coming round to their view
that central banks secretly act to keep a lid
on the price of gold in order to support the

"The establishment in the gold world is
coming around to our central premise," Chris
Powell, secretary of GATA, told his members
last week. "Central banks and particularly
the U.S. Treasury Department have been
colluding surreptitiously and desperately to
suppress the gold price and manipulate the
gold market," he added.

The report has caused embarrassment to Royal
Bank as many of its clients and some of the
biggest companies on the Canadian stock
exchanges are gold miners, including Barrick
Gold Corp., the world's second largest
producer, which is also the world's biggest

Bank of Novia Scotia is one of the largest
bullion banks in the world and the Canadian
central bank has been a consistent seller of
gold over the past decade. Mark Arthur, head
of Royal Bank Investment Management, issued a
statement saying the report was produced for
"internal use" and "in no way reflects the
views of Royal Bank."

However, the report is by John Embry, a
senior figure at RBC who sets strategy for
the bank's $38 billion in funds under management
and chairs its stock selection committee as well
as running its Royal Precious Metals fund. He
was not available for comment.

Embry predicts in the report that the price
of gold is set for further steep rises.
"Those with a vested interest in containing
the price of gold -- central banks, bullion
banks, heavily hedged gold companies -- will
not die easily but the tide is moving
strongly against them and the embedded short
positions could catapult the gold price