Thursday, September 21, 2017

More consensus coming out among gold analysts that central banks are the primary manipulators of gold prices

Over the past two weeks gold prices have seen a decline of just over 4% from a yearly high of over $1352, to its current level of $1293.  And while this move isn't even close to some of the previous beatdowns in the precious metal, one German analyst believes that nearly all severe price movements over the past 24 years have been intrinsically tied to collaborative central bank manipulations.

While major international events, like nuclear tests carried out by North Korea, affect gold prices and result in a situation when investors prefer to invest their money in the noble metal, economic expert Dimitri Speck believes that there are other, more important factors that play a crucial role in influencing the global financial market. 
Gold prices have been subject to constant manipulations since 1993, German expert on the gold market Dimitri Speck told Sputnik Germany
According to him, the manipulation of gold prices has been presented by the media as if it has been initiated by a couple of malicious traders just recently, but this idea is wrong. 
"When the gold price manipulation started on August 5, 1993, these were central banks that initiated the process, and namely the then head of the US Central Bank Alan Greenspan. He did not want to let the gold price rise over $400," Speck said, adding that Greenspan feared that a significant increase in gold prices might affect the "inflation thermometer." 
The expert noted that the US Fed had arranged an agreement among the central banks to keep the gold price below $400 dollars. This was done for several years by means of sales and loans. 
Drivers of Gold Price Manipulation 
Central banks, which often belong to the state, do not act alone, but work closely with private banking and financial institutions, Speck continued. 
"With the help of price shocks, they [the institutions] shortly knock the prices down to drive other buyers out of the market. The state is the first to get benefit from all this, and this primarily concerns the United States. Well, and the dollar. These are the main beneficiaries of the gold price manipulation. Because the US dollar, as the main world currency, looks good in this case," the analyst noted. 
Explaining how the manipulation process actually takes place, Speck noted that this happens "very simply," namely by "damaging other competitors." 
In this case, gold is the main rival to currencies based on loans, such as the US dollar and the euro. 
"The positive development of the price of gold as such exacerbates the debt and other economic deficits of the United States," he stated. - Sputnik News
Earlier this week we published an article based on data that shows even the 'central bank of central banks' (BIS) has been dumping excess amounts of gold onto the markets at higher levels than they did in 2011 when the gold price had reached its all-time high of $1940.

However gold price manipulation by the central banks to protect sovereign currencies and interest rates goes back much further than 1993 and the efforts of Fed Chairman Alan Greenspan.  In face, the idea of gold price manipulation appears to go back at least as far as 1973 when following the Fed's efforts to curb stagflation, the then Chairman of the Fed Paul Volcker admitted that his biggest regret was in not manipulating gold prices during that time.
Over the years Paul Volker has made it no secret that the Federal Reserve has assumed a policy in which it seeks to control the price of gold.  From his memoirs, excerpted by “The Nikkei Weekly” in reference to the dollar revaluation of the dollar by the U.S. Treasury on February 12, 1973 (Volker was the Treasury’s undersecretary for international monetary affairs at the time)  November 2004: 
That day the United States announced that the dollar would be devalued by 10 percent. By switching the yen to a floating exchange rate, the Japanese currency appreciated, and a sufficient realignment in exchange rates was realized. Joint intervention in gold sales to prevent a steep rise in the price of gold, however, was not undertaken. That was a mistake.    source link


This is some really valuable information, especially for someone who's trying to invest some money into the metal. Will definitely share it. Thanks for the information!

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