3 Minute Gold News
A Quick Read for Busy People
A quick synopsis of the June 2, 2014 interview with Ed Steer, director of the Gold Anti-Trust Action Committee (GATA) and author of Casey Research’s Gold & Silver Daily, speaking at the Cambridge House Canadian Investor Conference with Vanessa Collette.
Gold Price Manipulation
Gold Price Without Manipulation
Barclay’s Fine for Gold Price Fixing
How the Gold Fix Works
Where Gold Buying is Coming From
Could China or Russia Influence End to Manipulation
What’s been happening for the past several years, and particularly since the last downturn in February 2014, is that a small group of U.S. bullion banks, led by J.P. Morgan Chase, alone with a handful of other traders on the COMEX, are shorting the metals and using high frequency trading (HTF) techniques.
Their intent is to drive the price of gold and all of the other precious metals down to low levels, so they can buy all the long contracts they can, and get everyone else to go short.
They’ve succeeded in doing that.
That’s why the price is as low as it is today — it’s nothing to do with supply and demand at all.
GOLD PRICE WITHOUT MANIPULATION
The price without manipulation would be a number that would make your eyes glaze over.
No one knows what the true free market price of gold, silver, or any of the commodities is, because they’ve been distorted out of all recognition from what they should be.
If the powers that be, led by J.P. Morgan Chase, decided that they were going to let the prices run by just standing back and doing nothing, then we would see a complete repricing.
Not only gold and silver, but all commodities — wheat, oats — all the commodity producing nations that get most of their currency from commodities, would have a resource boom of Biblical proportions.
That is what the banks are trying to prevent, so the banks don’t abandon the U.S. dollar or other paper currencies.
There’s no way of knowing an unmanipulated price, but Ed would say somewhere north of $5,000 per ounce.
Somewhere between $5,000 – $15,000 per ounce, but Ed says he doesn’t know if they’ll allow it to go that high or not.
There could also be an overnight repricing.
There’s a lot of talk that we’re going to wake up some morning and the gold price is going to be some other bid price.
So to pick a number out of thin air is a Mug’s Game, but it’s going to be very large.
If the Federal Reserve (Fed) wanted to revalue gold then they could just pick a number. They could make it anything they want it to be.
If that happens then every commodity will rise.
BARCLAY’S GOLD PRICE FIXING
Barclay’s recently paid a $43 million for gold price fixing.
Ed said he had to laugh when he read about the Barclay’s trader who actually fixed the London PM Gold Fix, because he got caught with his hand in the cookie jar.
It really is a ‘fix’. They can jockey those numbers any way they want.
The problem doesn’t just lie with the AM fix or the PM fix. The entire commodity exchange itself, which is run by the CME Group (Chicago Merchantile Exchange Group), lets the traders run rampant over the price of commodities.
The gentleman at Barclay’s who got caught is just symptomatic of a much, much larger problem.
You don’t see a fix for rubber, or tin, or wheat, or cocoa — it’s only gold and silver. Why do you need a fix for them and not a fix for everything else?
HOW THE GOLD FIX WORKS
It’s a very small group of banks – Ed believes there’s five in gold and three in silver — and Deutche Bank is gone now in the silver fix, because their government basically said, “You’re out of it”. So now there’s only two in silver.
They meet secretly to set the price based on the sell orders and the buyers they have that day. They can game the system any way they want.
The guy at Barclay’s got caught, and it’s obvious that’s just one of many times that’s happened.
Ed says he was gratified to see someone get caught.
Because it’s such an opaque market — the gold and silver pricing mechanism, the LBMA (London Bullion Market Association) and everything associated with the precious metals — is so secret that nobody really knows if the fine Barclay’s paid is having an impact.
Duetche Bank having pulled out of the gold and silver fix is a huge thing.
Ed says there are obviously things going on under the surface that the general public, including himself, have no knowledge of.
We may see a big change some day, but right now the market is so opaque you just never know.
TRIGGER TO CAUSE THE GOLD PRICE TO RISE
Right now J.P. Morgan just has to let the market do what it likes to do and we’d have a market clearing event that would make your eyes glaze over.
The sky’s the limit. Are they going to do it? Ed doesn’t know.
WHERE GOLD BUYING IS COMING FROM
China is buying huge amounts. They’ve only been in the market for a couple of years and they’re average 80 – 100 tonnes a month.
They’re buying through Hong Kong where we can see it, and they’re buying it other place, like Shanghai where we can’t see it.
Some of the central banks of the world are buying as well.
They’re buying it hand over fist.
In India, all indications are that the import tax will be removed. The jewelry manufacturer and importers are jumping up and down for joy. Something will come of it, but Ed isn’t sure what yet.
China and Russia, and anyone who matters, knows about the price manipulation.
It’s a big secret underground.
They all know what’s going on and this Barclay’s incident was just the tip of the iceberg.
Ed believes the covert will become overt — like the Gold Pool of the 1960s.
The manipulation is so obvious. Ed says that Jim Rickards says it’s so obvious that the manipulators should be embarrassed by what they are doing.
COULD CHINA OR RUSSIA INFLUENCE END TO MANIPULATION
Vladamir Putin could end it tomorrow.
All he would have to do is get on television and say that Russia is not going to export any more gold, silver, platinum or paladium until J.P. Morgan Chase, HSBC, CitiGroup, Deutche Bank and Barclays end this price management scheme, so that all the precious metals producers in Russia, and every other country in the world, is treated fairly.
Ed guarantees it would be over in 5 minutes.
He believes the first country to issue a gold backed currency will have to be a major country, like Russia or China, because they’re the only ones to have the banking clout to back it up, they’re gold producers, and they’ve got the gold to boot.
The U.S. could do it themselves because they can see the writing on the wall — and it’ll be one hell of an event if it happens.
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