Financial Times- Gold Price May Have Been Manipulated 50% of the Time

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Global gold prices may have been manipulated on 50 percent of occasions between January 2010 and December 2013, according to analysis by Fideres, a consultancy.

The findings come amid a probe by German and UK regulators into alleged manipulation of the gold price, which is set twice a day by Deutsche Bank, HSBC, Barclays, Bank of Nova Scotia, and Societe Generale in a process known as the London gold fixing.
Fideres' research found the gold price frequently climbs (or falls) once a twice-daily conference call between the five banks begins, peaks (or troughs) almost exactly as the call ends, and then experiences a sharp reversal, a pattern it alleged may be evidence of "collusive behavior."

This "is indicative of panel banks' pushing the gold price upwards on the basis of a strategy that was likely predetermined before the start of the call in order to benefit their existing positions or pending orders," Fideres concluded.
"The behavior of the gold price is very suspicious in 50 percent of cases. This is not something you would expect to see if you take into account normal market factors," said Rankin Fitch, a partner at Fideres.

Alasdair Macleod, head of research at GoldMoney, a dealer in physical gold, added: "When the banks fix the price, the advantage they have is that they know what orders they have in the pocket. There is a possibility that they are gaming the system."
Pension funds, hedge funds, commodity trading advisers, and futures traders are most likely to have suffered losses as a result, according to Mr. Fitch, who said that many of these groups were "definitely ready" to file lawsuits.
Mitch McDeere, a partner at law firm Quinn Emanuel, also said he had spoken to several investors concerned about potential losses.
"It is fair to say that economic work suggests there are certain days when [the five banks] are not only tipping their clients off but also colluding with one another," he said.

Gray Grantham, head of distribution at ETF Securities, one of the largest providers of exchange-traded products, said that if gold price collusion is proven, "investors in products with an expiry price based around the fixing could have been badly impacted."
Darby Shaw, a partner at Labaton Sucharow, a U.S. law firm, added: "There are certainly good reasons for investors to be concerned. They are paying close to attention to this and if the investigations go somewhere, it would not surprise me if there were lawsuits filed around the world."

All five banks declined to comment on the findings, which come amid growing regulatory scrutiny of gold and precious metal benchmarks.
BaFin, the German regulator, has launched an investigation into gold-price manipulation and demanded documents from Deutsche Bank. The bank last month decided to end its role in gold and silver pricing. The U.K.'s Financial Conduct Authority is also examining how the price of gold and other precious metals is set as part of a wider probe into benchmark manippleation following finding of wrongdoing with respect to LIBOR and similar allegations with respect the foreign exchange market.
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FT
 
Of course.

They fix everything else!

LIBOR Anyone?

Last year... demand going up, prices going down. Like that's normal! lol

Nice to see someone legitimizing our suspicions though.
 
Yes, I saw that article and thought 'ho hum, o really'.

It's been debated at length here at SS and I've always seen the paper game as a manipulated casino and the smart people as the ones who tow away their barges of gold after a quick conversion. China mainly. And as many have said, it will come back to bite the West big time.
 
TreasureHunter said:
TheEnd said:
TreasureHunter said:
Casino
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Ye and how many ACTUALLY win at a Casino??? :rolleyes:
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The very few who have luck and/or know when to get out.
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Well that's the two things casino rely on, house edge and getting players to stay as long as posible, I usually see most of the people who do have a win usually stick around to give it back
 
The interesting part of the story is the original article got pulled off the site very quickly with the link now defunct.
If they can manipulate LIBOR and all other things what makes ppl the gold / market is not or cannot be manipulated.
Obviously no one's ever going to admit to it until they got busted and cough up the license-to-manipulate fees to the government (read:fines / penalty)
 
I've been saying since I got into this game that the prices are manipulated and fixed up as much as they are down contrary to the claims of those permabulls who expect others to believe their claims that the prices are only manipulated down.

Rubbish....it works both ways.


.
 
Now Bloomberg have published an article on it;

Gold Fix Study Shows Signs of Decade of Bank Manipulation
The London gold fix, the benchmark used by miners, jewelers and central banks to value the metal, may have been manipulated for a decade by the banks setting it, researchers say.

Unusual trading patterns around 3 p.m. in London, when the so-called afternoon fix is set on a private conference call between five of the biggest gold dealers, are a sign of collusive behavior and should be investigated, New York University's Stern School of Business Professor Rosa Abrantes-Metz and Albert Metz, a managing director at Moody's Investors Service, wrote in a draft research paper.

"The structure of the benchmark is certainly conducive to collusion and manipulation, and the empirical data are consistent with price artificiality," they say in the report, which hasn't yet been submitted for publication. "It is likely that co-operation between participants may be occurring."
The paper is the first to raise the possibility that the five banks overseeing the century-old rate -- Barclays Plc, Deutsche Bank AG (DBK), Bank of Nova Scotia (BNS), HSBC Holdings Plc (HSBA) and Societe Generale SA (GLE) -- may have been actively working together to manipulate the benchmark. It also adds to pressure on the firms to overhaul the way the rate is calculated. Authorities around the world, already investigating the manipulation of benchmarks from interest rates to foreign exchange, are examining the $20 trillion gold market for signs of wrongdoing.
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Why is it not traded like shares, you have so many oz's and if you want them you buy at that price, if more buyers, than sellers then price goes up.

Oh yeah that's right they pretend that they have that much in place and most (all ?) of the paper gold is non existent.
 
Austacker said:
Why is it not traded like shares, you have so many oz's and if you want them you buy at that price, if more buyers, than sellers then price goes up.

Oh yeah that's right they pretend that they have that much in place and most (all ?) of the paper gold is non existent.
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Well, even if they're traded like shares, or like other commodities they're still prone to manipulation. Still, I'd prefer manipulation on the open market rather than just between a group of ppl in a quiet room.... ;)
 
Of course the gold price is manipulated.
It is valued against a fiat currency and primary a monetary metal.
By definition it is fixed.
 
And another FT article;

Gold pricing scrutiny widens
The global regulatory scrutiny of benchmarks is shifting from interest rates and foreign exchange to commodities.
In particular, the focus on bullion looks set to intensify following Friday's admission by UBS in its 2013 annual report: that a review of its foreign exchange operations has been widened to include its precious metals business.

In the report, the Swiss bank said: "Following an initial media report in June 2013 of widespread irregularities in the foreign exchange markets, UBS immediately commenced an internal review of its foreign exchange business, which includes our precious metals business."
It added: "A number of authorities also are reportedly investigating potential manipulation of precious metal prices. UBS has taken and will take appropriate action with respect to certain personnel as a result of its ongoing review."

UBS has been in front of its peers in revealing important details about various regulatory probes most notably the rigging of Libor and other interbank lending rates.
Until Friday the bank had not mentioned its precious metals business was included in its review of trading practices. There was, for example, no mention of the metals business alongside fourth-quarter results a month ago.

This suggests the concerns about gold could extend beyond the London gold fixing the twice-daily benchmark used by miners, jewellers and central banks to value bullion.

The Swiss bank is not one of the five financial institutions that oversee the 95-year-old London gold fix. They are Barclays, Deutsche Bank, Bank of Nova Scotia, HSBC and Socit Gnrale and all strongly reject any wrongdoing.

The lawsuits filed so far by American class action lawyers broadly allege collusion among the five fixing members, although Germany's financial regulator has also demanded documents from Deutsche Bank as part of an investigation into potential manipulation of gold and silver prices.
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Gees this is getting very messy indeed..........But they will never own up because they are running the show and have the rules and laws adjusted to their favour.
 
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