CFTC Investigating London Gold, Silver Price Fixing For Manipulation

Tyler Durden's picture

Years after the CFTC, under the leadership of Goldman's Gary Gensler, theatrically agreed to investigate whether the price of precious metals was manipulated during trading - whether systematically or ad hoc - only to let that inquiry fizzle and drop the whole idea proclaiming there is manipulation, the commodity futures regulators are once again taking a look at shady activities originating at London. Or rather, it is "discussing internally" whether the daily London gold and silver price fixing is open to manipulation.

We are confident that this latest noble CFTC effort will be for naught: after all wholesale market manipulation like that of Libor and the energy market, is only contained to those sectors. It is preposterous and inconceivable that bankers, anywhere and especially in London, would be tempted to intervene illegally and push gold prices lower. After all, it is not like a surge in gold and precious metal prices is indicative of a loss of faith in the status quo and fiat money, and thus an embeded status quo oligarchy would have any interest in keeping precious metal prices lower. Which is why we urge the CFTC to promptly forget this latest charade, and to instead focus on much more productive things: like ignoring the creeping takeover by HFT of all commodity markets as well as complaining to Congress about its low, low budget.

From the WSJ:

The Commodity Futures Trading Commission is discussing internally whether the daily setting of gold and silver prices in London is open to manipulation, according to people familiar with the situation.


No formal investigation has been opened, the people said. The CFTC is examining various aspects of the so-called price fixings, including whether they are sufficiently transparent, they said.


Gold prices are set twice daily by five banks via teleconference, while three banks set silver prices. The fixings are then used to determine spot prices world-wide, including jewelry and sales from mining companies to refineries. The prices also help determine the value of derivatives tied to the metals.


The London gold market fix dates from 1919, and now sees twice-daily conference calls involving units of five banks: Barclays, Deutsche Bank AG, HSBC Holdings PLC, Bank of Nova Scotia and Société Générale.


Spokespeople for Barclays, HSBC and Deutsche had no immediate comment. Representatives from the other two banks couldn't immediately be reached.


The silver fix, dating from 1897, involves Scotia, Deutsche and HSBC.


"[The fixings are] not arbitrary, it's very much done on a demand supply basis until a price is arrived at. It's fully transparent, it's nothing like Libor," said a spokesman for the London Bullion Market Association, the trade organization that sets the standards for the quality of gold and silver traded in the London market, but do not run the fixings.

Well that settles that, because in a world in which any real assets are the biggest scarcity, would those who have direct and constant access to money created out of thin electrons, prefer to quietly accumulate gold, physical gold not its paper manifestations, in order to preserve their wealth, at low or high prices?

This should not be trick question.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
EscapeKey's picture

fraud? committed by financial institutions???


Lohn Jocke's picture


AlaricBalth's picture

"After concluding our investigation, the CFTC has found no incidents concerning price fixing or collusion. As a matter of fact we would like to commend JPMorgan, RBS and HSBC for their extraordinary efforts during this exhaustive search for potential wrong-doing in these markets. This should put to rest any and all rumors and accusations in relation to this matter. "

That should do it. Saved the CFTC the trouble of having to go through the motions of an inquiry and posted their press release for them.

sunaJ's picture

Nothing a sub-billion dollar fine won't make right (again), right?  Then they don't have to feel so bad for the fraud because see, they paid a fine.

CH1's picture

And the fine would be paid to... their partners!

That'll fix everything!

Supernova Born's picture

It is manipulated.

If the manipulation should fail, gold will be banned or brutally taxed.

Their power is based on money printing. They will never willingly give it up. Never.

Supernova Born's picture

What gold allows one to do is transfer wealth from one failing governmental paradigm to a new government or country.

It is despised by the banksters and status quo politicians for very good reason.

When your spouse sets up separate bank accounts, cancels joint credit cards and buys a new condo, it doesn't take a PhD from MIT to figure out what's going on.

nope-1004's picture

Gold price is derived by 5 banks daily via teleconference?  LOL.

Nothing to do with physical demand?  Nothing to do with the admission by the mint, when they suspend sales or are sold out, that the paper price is a fraud?

CFTC is a joke.


XenoFrog's picture

The article is enough to make your brain explode from rage.


They're talking about possibly investigating if five banks setting a price can be open to price fixing... Pretty sure five banks getting together to decide on the price is the definition of price manipulation.

flacon's picture

Oh good. Price discovery. Motherfucker! Oh wait... who's that shithead with the golden tie? Why it's motherfucking Bart Chilton. But he wore a gold tie... doesn't that mean something to you gold bugs? /sarc

Joe Sixpack's picture

"...The Commodity Futures Trading Commission is discussing internally whether the daily setting of gold and silver prices in London is open to manipulation..."

Of course not. This is similar to say, the Libor, which is... Ummm... Hold that thought...
strannick's picture

The CFTC should have an internal discussion on whether the CFTC manipulates commodity prices by refusing to regulate financial fraud.

Didnt retiring CFTC Justice Painter say how the CFTC Chairperson at the time Wendy Gramm -yes wife of chief deregulatior Phil Gramm- told a newly hired CFTC Judge to never rule in favor of a manipulation-alleging plaintif?

Also, Chilton said that manipulation intent is impossible for the CFTC to prove (maybe implying how inept the CFTC is), which of course begs the question why the CFTC should continue to exist at all.

Then of course there is PBS's ''The Warning'', which chronicles how former CFTC Chairperson Brooksley Born was trying to blow the whistle on derivatives, when she was run out of town by Greenspan, Summers and Rubin.

Or how about bank lobbyist Jill Sommers then appointed as a CFTC Commisioner and then presiding over MFGlobals and Corazine's CFTC hearing and letting him off? 

The CFTC complains to Congress that it needs more money to do its job. The CFTC is doing its job just fine, which is neutering any genuine financial regulation and ensuring banks can commit unimpeded fraud.

SafelyGraze's picture

The problem that we at the cftc continually wrestle with is:

what is the likelihood that the whole house of cards will collapse in such a way that the commodities market (and, therefore, we ourselves) might be blamed *in our lifetime*?

because if the mirage is exposed via a some little dog that pulls away a different curtain than ours, then we're in the clear.

and if some other regulatory entity is blamed, then we're in the clear.

and even if we're blamed, but only after another century passes, then we're in the clear.

therefore we see many pathways leading to our organization being in the clear if we simply sit tight and keep watching.

thanks for your understanding!

knukles's picture

Jesus H Fucking Christ People!

It's called a FIXING

What the fuck more is needed?

(words have specific meanings...)

CH1's picture

words have specific meanings

Yeah, and you may want to look them up.

OutLookingIn's picture

Throwing a bone to the sheeple!


Half_A_Billion_Hollow_Points's picture

praying that the dog and the pony show ends badly--wikileaks style.

Stoploss's picture

Sure is a whole lotta shit eminating out of London Lately...



Oh, wait..

EscapeKey's picture

quite appropriate, considering that's essentially what JPM and GS do to their financial products before the sales pitch

smlbizman's picture

this is obviously gods work, so how about we let the new pope, with all the integrity his group has, cast that stone...

Papasmurf's picture

Leave the pope out of this.  They are very busy burning piles of child porn.  (hence the black smoke)

Antifaschistische's picture

The only thing one can be certain of, is that any price arranged by a handfull of guys in a smoke filled teleconference room, is that the price they arive at will NOT be a market price.  If it were, there would be no need for the conference.

Now...which way the price is manipulated may be another question.

Meatballs's picture

Amazingly enough, a couple of them look better without the war paint.

Rainman's picture

Unbelievable is believabel ! Please read the Commodity Futures Modernization Act 2000 for more info < might take a couple days tho),28804,1869041_1869040_1869098,00.html

rhinoblitzing's picture

Rice Futures.... They are traded in Chicago, Obama is from Chicago - We should Impeach Him - Now!

rhinoblitzing's picture

He's from Hawaii, and attended Harvard...

Fixed it 4 me! (and up arrowed me 2)

NemoDeNovo's picture

Heresey to say these FINE Upstanding Financial Professional would ever DREAM of doing something "Illegal" </sarc>

RafterManFMJ's picture

You Keep Using That Word, I Do Not Think It Means What You Think It Means

Spider's picture

Remember - We NEED the bankers!  If we get rid of them who will take our money from us, use it to pay themselves bonuses based on their profits gambling on exotic derivatives, and then make us pay for it with tax dollars when the toxic assets implode.

Jamie Dimon's toilet aint going to clean itself... 

AllThatGlitters's picture

My stack sits at the bottom of the nearby lake unmolested, save for the occasional nudge by a fish attracted by the shine.

Eagles do shine like spinners.

AllThatGlitters's picture

Maybe I should start fishing with the 10 oz. Silver NTR Snake Bars:

The snakes will look like worms to the fish.

And only $0.86 over spot!

Banksters's picture

How do you like this shit?


EXCLUSIVE - U.S. to let spy agencies scour Americans' finances

Reuters) - The Obama administration is drawing up plans to give all U.S. spy agencies full access to a massive database that contains financial data on American citizens and others who bank in the country, according to a Treasury Department document seen by Reuters.


The proposed plan represents a major step by U.S. intelligence agencies to spot and track down terrorist networks and crime syndicates by bringing together financial databanks, criminal records and military intelligence. The plan, which legal experts say is permissible under U.S. law, is nonetheless likely to trigger intense criticism from privacy advocates.


Financial institutions that operate in the United States are required by law to file reports of "suspicious customer activity," such as large money transfers or unusually structured bank accounts, to Treasury's Financial Crimes Enforcement Network (FinCEN).



deKevelioc's picture

Don't worry, Barney Fife is on the case.

johnnymustardseed's picture

Fuck me... don't they know this is a matter of national security (worthless dollars)?

Bay of Pigs's picture

FREE Bart Chilton!

debtor of last resort's picture

The golden brick road between JPM and the Fed is polished by the cftc workers as we speak?

Poor Grogman's picture

ZH readers are manipulating the PM supply downward with their flagrant disregard for marine safety standards.

Come on fellas a little more care thanks...

fockewulf190's picture

Seems like every month these terrible boating accidents are happening to me...and I'm not even BWI when it happens. Maybe next month I'll get it right.

rlouis's picture

It only makes sense to close the barn door after the horses have run off to China.

SheepDog-One's picture

I'm about giving up any hope of seeing the 'Deer in Headlights' pic on a ZH article again in my lifetime. I think we've gone over the rainbow and will live the rest of our lives in this suspension of disbelief.

dick cheneys ghost's picture

Wake me up when the Saudi's start trading their Oil for bitcoins

sampo's picture

"The silver fix, dating from 1897, involves Scotia, Deutsche and HSBC.

"[The fixings are] not arbitrary, it's very much done on a demand supply basis until a price is arrived at. It's fully transparent, it's nothing like Libor," said a spokesman for the London Bullion Market Association, the trade organization that sets the standards for the quality of gold and silver traded in the London market, but do not run the fixings."

So why can't you publish SIFO - rates anymore?