Is the gold price fixing a big scam by the banks?

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Marcel

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Are the "officual" gold prices just the result of a big manipulation of certain banks?
CFTC suspects banks to have manipulated the fixing of the gold and silver prices and is looking into that matter. Investigation by the Commodity Futures Trading Commission may be opened as a result.

http://online.wsj.com/article/SB10001424127887324077704578358381575462340.html

My opinion:
We should have the market determine the value of gold. With the current financial crisis, the value of gold might have been much higher than we are told.
If it is true, that Deutsche Bank, Barkley´s and Co. have manipulated the gold price just as they did with the interbanking interest reates (libor), this institution should be closed down and free pricing like in the stock market should replace it.
Uhh, and send the responsible banking managers to jail.
 
generally I have no doubt about the prices are manipulated, because of the artefacts in the chart lines. dont' know who,but it must be a strong force
 
This has been a very long-running "conspiracy" deal. Couple of comments. You can completely forget the CFTC doing anything whatsoever about this, as it has been "proven" for maybe 5 years that this is so, to the extent claimed. But the biggest participants in metals trading are the major banks who are invulnerable to any sort of action other than "slap on the wrist" fines no greater than 5-10% of their profits from violating whatever they wish to violate. In essence, the regulators are completely captured. After all, if they can commit mortgage fraud on a nationwide scale and launder money for drug cartels, exceeding position limits is childs play for these guys.

Secondly, the major banks are the financiers for most of the major gold producers who have to meet payroll and considerable ongoing expenses, including interest paid on loans to said banks. To do this, they (the miners) have to sell forward much of their output, typically using futures contracts. They are selling covered calls on their output to meet current expenses. And they pretty much always will. These sales of futures contracts inevitably impose a monster degree of short interest into the market, inevitably outweighing large and small speculator interest. It has been this way since Y2K, when I started rummaging around this kind of market internal info. It was this way even back in the early 2000's when the prevailing interest rate was more like 5-6-7% and yet bullion could be borrowed for 1.5%. So what did JPM et al do? They borrowed bullion and sold it, placing the proceeds into paper investments expected to yield 8-15%+. So the money JPM et al was able to borrow, they got an immediate 4% bump on, the day they borrowed it. Then they invested the proceeds into other stuff that yielded around 10%. Then they waited until gold took an overnight poop, bought back their gold, paid off the bullion loans, and walked away with minimally 20% on the round trip.

So this, to me, is the explanation as to why there is always a towering degree of short interest in the COT Commitment of Traders reports. It has never been otherwise, for as long as I've been watching it. Now that bullion borrowing and pure money borrowing are roughly at parity, the previous trading advantage has disappeared. but the degree to which the major banks have fully captured the government and regulators itself has very much strengthened. And still, the miners have to sell a great deal of their output forward.

The story of PD Phelps Dodge, and how they sold so much copper forward that they were losing well over a buck a pound when copper spiked over $4 and thus they bankrupted themselves, enabling FCX Freeport McMoran to buy the company just by supplying their own copper output promised by PD, is an absolutely fascinating, somewhat related story.
 
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