Hint of Gold Price Manipulation


Those familiar with stories of gold price suppression and manipulation will not be surprised in todays report from GoldCore. There is a hint from the data available from the LBMA that price looks to be fixed. Why would this possibly happen? 😉 This post is an interesting introduction into gold supression by central banks. For futher information on this subject I would recommend looking at GATA who are an action group dedeicated to exposing the manipulation in this market. Another good site, but a little unusual is hosted by USAGold but written by Another (Thoughts).

The London AM and PM Gold Fix (USD) of the last two days in a row have been identical – to the cent – which is highly unusual.  View data from LBMA Website.

On Monday and Tuesday, the 28th and the 29th of November, the gold fix was identical in dollar terms and nearly identical in pound and euro terms.

On Monday, the 28th, gold’s AM and PM fix was at $1,714.00/oz.

On Tuesday, the 29th, gold’s AM and PM fix was at $1,717.00/oz – exactly just $3.00 higher than the day before.

It may be a coincidence but if it is one, it is highly unusual as it happens rarely.

While it has happened twice in 2011 – on January 10th and February 2nd – it has never happened two days in a row. It happened six times in 2010 but again never for two days in a row.

Should it happen a third day in a row today – then questions will be asked as to whether the official sector and or bullion banks are attempting to fix prices at this level.

This was attempted by the London Gold Pool in the 1960’s when the Federal Reserve and seven European central banks capped and artificially suppressed the price of gold for a few years before the controls collapsed in 1968 due to free market realities.

Gold rose 24 times in the next decade from $35/oz in 1971 to $850/oz in 1980.

Obviously, there is a motivation for attempting to cap gold prices due to a real risk of an international monetary crisis due to the growing European and global debt crisis – not to mention an increasingly likely European currency crisis.

It is too soon to jump to conclusions and judgment must be suspended for now.


Germany struggles to sell its bonds

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Today Germany struggled to sell its bonds. The German 10-year bund yield rose sharply from 1.92% to over 2.06% as it failed to get bids on 35% of its bunds. As reported in GoldCore

This is one of Germany’s worst auctions since the launch of the Euro with the Bundesbank having to pick up nearly 40% of the 6 billion euros on offer.

The German auction in turn led to further weakness in European equity markets. Asian equity indices followed US equities lower after news of a new US bank stress test and then the poor Chinese manufacturing data.

The bond auction in Germany is a disaster. If Germany has to buy its own bonds, it is frightening to think how other European nations, including France, will fare at bond auctions in the coming weeks.

Reuters went on to report that German Bunds performed worse than US T-Notes or UK Glits. Now we know things are bad 😉

If the crisis spirals out of control, some fear that it could reach a magnitude that would hit Germany as well by sending it into a deep recession. On the other hand, any solution to the crisis is likely to involve a higher fiscal bill for Germany.

“It is a complete and utter disaster,” said Marc Ostwald, strategist at Monument Securities in London. “If Germany can only manage a 0.65 cover in actual terms for what is going to be their next benchmark then what hope for everybody else?”

“It really tells you that the Bund yields are at the completely wrong level … never mind that they are a safe haven. There’s certainly a partial element of ‘they (investors)would rather not have euros’ in there.”

Bund futures were last down half-a-point on the day at 136.75. Ten-year yields were 5.8 basis points higher at 1.969 percent, yielding more than U.S. T-notes for the first time since early October.

UK Gilts were also outperforming Bunds with yield premium for holding 10-year British bonds narrowing to its tightest since August at 15 bps.

On an earlier post we reported by Asia beginning to sell off German Bunds.

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