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Gold Price Rigging Fears Put Investors On Alert - FT

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Today’s AM fix was USD 1,333.00, EUR 968.54 and GBP 800.46 per ounce.
Friday’s AM fix was USD 1,320.75, EUR 963.63 and GBP 792.20 per ounce.           

Gold fell $0.20 or 0.02% Friday to $1,323.50/oz. Silver lost $0.02 or 0.09% at $21.81/oz.
Gold and silver were both up for the week at 0.37% and 1.68%.

Gold has risen 0.8% in London and reached $1,334.60/oz, its highest level since October 31. After last years 28% decline, gold is now 11% higher this year.


Gold in U.S. Dollars, 5 Year - (Bloomberg)

Gold may post its fourth week of gains as concern of prolonged political unrest in Ukraine raises fears of a sovereign default and contagion. This is adding to safe haven demand for gold - particularly in Eastern Europe and Russia.

A breakthrough peace deal for Ukraine has halted days of violence and may bring  sweeping political change, meeting many of the demands of the pro-European opposition. However, there are considerable financial and economic challenges facing Ukrainian banks, the Ukrainian pension system and the wider economy. There remains the risk of a default that could lead to contagion.

Bullion for immediate delivery traded at $1,325.10 an ounce at 2:23 p.m. in Singapore from $1,324.28 on February 21, when prices capped a third weekly gain.

The Financial Times reports this morning that global gold prices may have been manipulated on 50% 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. Prices are 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."

Fideres concluded that 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."

"The behavior of the gold price is very suspicious in 50% of cases. This is not something you would expect to see if you take into account normal market factors," said Alberto Thomas, a partner at Fideres.

Pension funds, hedge funds, commodity trading advisers and futures traders are most likely to have suffered losses as a result, according to Mr Thomas. He said that many of these groups were "definitely ready" to file lawsuits.

Daniel Brockett, a partner at law firm Quinn Emanuel, also said he had spoken to several investors concerned about potential losses.

Matt Johnson, 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."

Gregory Asciolla, 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 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 manipulation following finding of wrongdoing with respect to LIBOR and similar allegations with respect the foreign exchange market.

The Financial Times article, ‘Gold price rigging fears put investors on alert’,can not be accessed this morning, but the Gold Anti Trust Action Committee (GATA) covered the Financial Times story in their dispatches and it can be read here. 

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Mon, 02/24/2014 - 14:44 | Link to Comment mccvilb
mccvilb's picture

The Pirhana smell blood and are moving in. All they're waiting on is for somebody else to take the first bite.

Mon, 02/24/2014 - 14:07 | Link to Comment Kuanyeah
Kuanyeah's picture

What have the banks not manipulated? NOTHING. But soon NOTHING will be manipulated too.

Mon, 02/24/2014 - 13:07 | Link to Comment Joebloinvestor
Joebloinvestor's picture

Pretty FUCKING OBVIOUS.

The involved banks have admitted to manipulating EVERYTHING else.

Mon, 02/24/2014 - 12:37 | Link to Comment RaiZH
RaiZH's picture

The article has been pulled down. 

Mon, 02/24/2014 - 12:21 | Link to Comment e_goldstein
e_goldstein's picture

A hint to the Fideres' investigator. The manipulation has been going on a lot longer than that.

Mon, 02/24/2014 - 12:05 | Link to Comment Puncher75
Puncher75's picture

Al fiat currencies go to ZERO.  Questions?

Mon, 02/24/2014 - 12:06 | Link to Comment Puncher75
Puncher75's picture

All that is

Mon, 02/24/2014 - 12:06 | Link to Comment Puncher75
Puncher75's picture

All that is

Mon, 02/24/2014 - 11:49 | Link to Comment xavi1951
xavi1951's picture

G.SOROS anyone?

Mon, 02/24/2014 - 11:28 | Link to Comment Sufiy
Sufiy's picture


Frank Holmes: These Gold Charts Will Make Your Heart Beat Faster 


Frank Holmes presents a very interesting set of charts supporting the bullish case for Gold and Gold stocks. Now with Gold crossing 200MA we have the game changer for the Gold marker. Professional traders have positioned themselves after 20MA was breaking out to the upside and smart money has followed after 50MA. Now the retail public will start buying the new Gold Bull leg.   Number of Gold stocks with, McEwen Mining among them, has printed The Golden Cross already, when 50MA is crossing 200MA to the upside, confirming the bullish reversal pattern. It is very bullish set up and we expect the rally in Gold stocks to widen its base to include the smaller junior miners. http://sufiy.blogspot.co.uk/2014/02/frank-holmes-these-gold-charts-will....

Mon, 02/24/2014 - 12:27 | Link to Comment Tortuga
Tortuga's picture

Help this dimwit out, will ya Sufiy?

This comment thread is about manipulation.

Anybody that needs a committee to investigate and tell them the market is manipulated has there head up their dadgumit.

That being said.

Why and or how the heck can you still think that charts, crosses, dma, good earnings, poor earnngs, ceo 100 million dollar bonuses, mean

DICK.

Mon, 02/24/2014 - 14:04 | Link to Comment Tall Tom
Tall Tom's picture

While YOU PERSONALLY do not believe in the Hocus Pocus of Charts, dMA Crosses, and other assorted Technical Analysis terminology it is not ALL ABOUT WHAT YOU BELIEVE.

 

Markets are set up by Psychology. If the majority of Traders believe in Technical Analysis then they will make decisions based upon those beliefs. Thus it only leads to a Self Fulfilling Prophecy as the majority of Market Participants believe it.

 

Thus it behooves you, as they far outnumber you in cash and by population, to take heed to what they are thinking and look at the Technical Analysis, whether or not you believe it.

 

They will be making their decisions based upon it. And that may cost you a lot of Bread if you do not seek out to understand that which others believe.

 

It is just a Pragmatic approach. You can idealize all that you want. But pragmatism will save the day as the ideals will merely vaporize into the ether as Pipe Dreams.

Mon, 02/24/2014 - 19:13 | Link to Comment Squid-puppets a...
Squid-puppets a-go-go's picture

understood, but theres a raging hoarde of dux ex-machinas that can cause significant volatility that leaves all the tech analysis for dead

Mon, 02/24/2014 - 12:04 | Link to Comment fijisailor
fijisailor's picture

So let's get the story straight.  Is gold rising because physical demand from Asia is taking over the markets or is it because the "smart money" and retail investor are piling into paper claims?  Also if there is a short squeeze how will this be manifested?  Will that be a sharp rise in prices or a steady climb as we have been seeing over the past month and a half?  Instead of TA making your heart beat faster a more rational analysis would be helpful.

Mon, 02/24/2014 - 12:29 | Link to Comment Tortuga
Tortuga's picture

For any and all rational analysis, please read Alec Baldwin letter to the editor, and based on absolute total denial as evidenced by this total scumbag, get rational.

Rational is so 1969.

Mon, 02/24/2014 - 11:22 | Link to Comment Randoom Thought
Randoom Thought's picture

Of course gold price is manipulated. It is the only reason that it has any value whatsoever. People complain when they think they price is manipulated down. But, they don't think about how the price was moved up in the first place for a metal that has very little practical use.

Mon, 02/24/2014 - 15:22 | Link to Comment mccvilb
mccvilb's picture

Yes, gold has very little modern usefulness, unless you have cancer, require the most reliable connections in electronics circuitry or plan on traveling in outer space or having prolonged exposure to radiation. http://www.visualcapitalist.com/portfolio/the-gold-series-uses-and-deman...

It also makes a great 1200 lb door stop.

Mon, 02/24/2014 - 12:02 | Link to Comment jaxville
jaxville's picture

Yikes.....Gold prices are inversly related to confidence in credit based money, fractional reserve banking and other such scams. As though those who rule through such scams would not influence gold prices ....

Mon, 02/24/2014 - 11:55 | Link to Comment J S Bach
J S Bach's picture

"...a metal that has very little practical use."

 

Yeah... it's only worthless money.

Mon, 02/24/2014 - 11:33 | Link to Comment ATM
ATM's picture

Very little practical use? I'd say being the very best money on the planet is extremely useful.

Mon, 02/24/2014 - 12:34 | Link to Comment Tortuga
Tortuga's picture

IMO, he means you cain't wipe your ass with it. Just sayin.

Oops, too quick to judge.

One could wipe one's ass with it, but the bottom line would be proportional to the liquidity visa vi the hypothecation of the last quarter, pounder.

Mon, 02/24/2014 - 11:20 | Link to Comment RaiZH
RaiZH's picture

I'm just watching gold surpass $1335, wondering if the days of the dips are over... :( 

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