Gold Price "Manipulated For A Decade", Repeatedly Slammed Lower, Bloomberg Reports

Tyler Durden's picture

While the FT promptly retracted an article on precisely the topic of gold manipulation from earlier this week (recorded for posterity here), Bloomberg appears to not have had the same "editorial" concerns and pressures, and today released an article once again slamming the final conspiracy theory that while every other asset class is manipulated, gold is in a pristine class of its own, untouched by close-banging, price fixing traders or central bankers, and reports that "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."

Of course, over the past 5 years we have reported time and again how official gold manipulation started in earnest some time in the 1960s (who can forget the "reshuffle club") but we will start with a decade.

Here is what BBG finds:

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, Bank of Nova Scotia, HSBC Holdings Plc and Societe Generale SA -- 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.

Tell us something we didn't already know. Then again, this time may be different, because one of the authors, Abrantes-Metz, advises the European Union and the International Organization of Securities Commissions on financial benchmarks. According to Bloomberg, her 2008 paper “Libor Manipulation?” helped uncover the rigging of the London interbank offered rate, which has led financial firms including Barclays Plc and UBS AG to be fined about $6 billion in total. She is a paid expert witness to lawyers, providing economic analysis for litigation. Metz heads credit policy research at ratings company Moody’s.

By way of background, the history of gold price fixing is well-known and is one of the longest running traditions in banking:

The rate-setting ritual dates back to 1919. Dealers in the early years met in a wood-paneled room in Rothschild’s office in the City of London and raised little Union Jacks to indicate interest. Now the fix is calculated twice a day on telephone conferences at 10:30 a.m. and 3 p.m. London time. The calls usually last 10 minutes, though they can run more than an hour.

So what exactly did this "erudite" authority on manipulation uncover?

Abrantes-Metz and Metz screened intraday trading in the spot gold market from 2001 to 2013 for sudden, unexplained moves that may indicate illegal behavior. From 2004, they observed frequent spikes in spot gold prices during the afternoon call. The moves weren’t replicated during the morning call and hadn’t happened before 2004, they found.


There’s no obvious explanation as to why the patterns began in 2004, why they were more prevalent in the afternoon fixing, and why price moves tended to be downwards, Abrantes-Metz said in a telephone interview this week.


“This is a first attempt to uncover potentially manipulative behavior and the results are concerning,” she said. “It’s down to regulators to establish why there are such striking patterns but banks have the means, motive and opportunity to manipulate the fixing. The results are consistent with the possibility of collusion.”

And the punchline:

Large price moves during the afternoon call were also overwhelmingly in the same direction: down. On days when the authors identified large price moves during the fix, they were downwards at least two-thirds of the time in six different years between 2004 and 2013. In 2010, large moves during the fix were negative 92 percent of the time, the authors found.

Unpossible - the bank prop traders manipulating gold and the central banks for whom precious metals are the holy water that can destroy their fractional reserve ponzi scheme would never lie. Because otherwise the historic silver slam from May 1, 2011, in which silver cratered by $6, or about 15%, in milliseconds and ended the parabolic rise higher in the metal could be... gasp... criminal.

In other news, we may have officially run out of conspiracy theories.

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PR Guy's picture

We all know that (on here anyway)

SilverIsKing's picture

It can't be. Trader Dan Norcini said so.

greatbeard's picture

I lose respect for anyone who doesn't acknowledge the obvious, and the manipulation of gold and silver to the downside is obvious, and anyone who mixes politics with their market analysis.  One strike and you're gone, Dan has two.

NotApplicable's picture

Only a decade?

Oh, I forgot, Gordon Brown's 1999 sale was "for the children."

SWRichmond's picture

Only one reason they would be admitting this now...

BaBaBouy's picture

 Biggest Market Manipulation Lawsuit Against These Feckers Coming ????????????????????????????

Pladizow's picture

Too bad Adrian Douglas is'nt here!

fonestar's picture

Gold and silver don't even have markets.  But at least there is Bitcoin which is not manipulated.

swmnguy's picture

No; just hacked and stolen.

Yes, I understand it wasn't Bitcoin itself that was hacked.  But for people whose money is gone, that doesn't make any difference.  Gone is gone.

BaBaBouy's picture

Is There  A MT Gocks Where I Could Store Some GOLD ???

BaBaBouy's picture

Probably Called MT FED ...

Pinto Currency's picture


The daily gold fix at the LBMA has been in place since 1919.  Why does this report figure manipluation would only have started 10 years ago?

The real issue is that the LBMA trades 290 Million gold oz. per day to set the gold price.

And this gold is paper gold or pretend gold.

They set the real gold price with trading of pretend gold.

BaBaBouy's picture

The Germans Will Get Their REAL GOLD Back From MT-G...Fed By About 2099...

Son of Loki's picture

Holder will jump on this...prosecute those involved...clean up the streets of scum like this......

oh, wait a sec......

strannick's picture

I'm shocked, absolutely shocked. Round up the usual suspects...

nope-1004's picture

Does any y'all remember the night of April 30, 2011?  Ya.... just so happens that's when Bin Laden was "found".  The following few hours, in thinly traded markets, silver was smashed because whoever sold millions of ounces in milliseconds was interested in true price discovery - lmao.

This is so fucking obvious US gov't bullshit.  TBTF western banks are the US govvy, as long as the USD is reserve currency and said banks remain insolvent.

This shit won't end until all the banks are Gox'd.


Bay of Pigs's picture


Iron fisted resolution brother. Thanks for all your contributions here at ZH over the years exposing this continuing massive fraud and deception.

DoChenRollingBearing's picture

All of the gold price mainpulation, in the end, does not matter much (unless you were speculating on leverage).

Just buy the real thing, and you will be fine.


Epic FOFOA article just up:

Gief Gold Plox's picture

BBG Screenshot taken, 'cause I can't decide on how long before it disappears.

Stuart's picture

So, the message of the gold cartel doing the manipulation to all of us is, "Whatcha going to do about it bitch?" 

SilverIsKing's picture

It was May 1 but you are correct.

giggler321's picture

If you knew currencys would die but still wanted control over their replacement and could obtain that by removing the show stopper of yester-year; then selling yellow cheap to remove all trace of physical is important as when the time comes and town cryers scream broke everyone will look for a quick alternative.  It wont be yellow because its all gone, watered down in small physical sales to the masses.  It wont be silver as the price of goods made with it will rise making them uneconomical.  Why is it Iran wants uranium?  Power? or something else?  Banking against a rare metal no one can take physical delivery but proving it is there has some significant advantages.

Bastiat's picture

Someday Holder will have to clean up his sheets when they come for him.  Ruby Ridge, Waco, Fast and Furious.

Thought Processor's picture



Why the admission now?


Something is coming around the bend methinks.

Pinto Currency's picture



Globally, people are asking for their physical gold and it sits in rehypothecated or levered paper instruments.

This is blowing up the paper rig and now Bloomberg is writing about it at the last moment.

1 in 100 are going to get their gold.

"Don't say we didn't warn you" mike bloomberg - sarc

Carpenter1's picture

"In other news, we may have officially run out of conspiracy theories. "



SoilMyselfRotten's picture

Is there a MT Gox where i can store my gold??


Yes, in JPM's MT vaults

KickIce's picture

We still have Area 51...

MeelionDollerBogus's picture

1 in 100 people will end up with gold who wanted it. Problem: about 85% of those people already have the gold they want/claimed in their hands which means the game is much more than afoot, it's near the end.

Bangin7GramRocks's picture

They can admit anything now because it is govenment policy to never arrest a banker. They laugh at you! And compared to the "value" of derivatives, stocks and bonds, the gold and silver markets are microscopic. They fuck with those prices for fun and they will keep doing it without any risk of prosecution. Welcome to capitalism; 2014 style!

fonestar's picture

Fuck goldcoin. 

Contact fonestar and buy Bitcoin today with confidence and a name Zerohedge trusts!

Max Hunter's picture

How about that USD index? Is this not news, Tyler?

bobola's picture

Fonestar, your thumbdrive is online

is vulnerable to hackers, over time

take your feltching tube

and some KY lube

and store it where the sun don't shine

MeelionDollerBogus's picture

Shouldn't be: DXY indicates nothing of currency devaluation as all the currencies are linked in it at a fixed ratio unrelated to actual demand/supply of those currencies OR things bought with them.

fonestar's picture

It doesn't matter that Bitcoin can be stolen.  So can anything else.  If something couldn't be stolen it would't be worth much.

RevRex's picture

BitCoin = Roach Motel



Your money goes in, but it doesn't come out!



Is your last name Winklevoss?

Colonel Klink's picture

May as well be, they say you are what you eat.  He's been sucking Winklecock.

Pickleton's picture

Totally LMAO while sittting here on a company teleconference.  Yikes! try mute next time.

MeelionDollerBogus's picture

It's a good practice. 2 levels of mute 2 firewall me off from accidentally speaking/laughing while reading this stuff and on my conferences. It's especially valuable if the one I'm running happens to be the Federal Reserve or Facebook. The lulz never end.

Skateboarder's picture

"It doesn't matter that Bitcoin can be stolen."

GOTCHA! First it was the argument against volatility. Nope, can't be challenged there. Next it was the argument against redeemability. Nope, can't be challenged there. Then it was the argument against theft. Apparently it doesn't matter that 2bitcoins can be stolen.

fonestar's picture

Who cares that Bitcoin got stolen from some shitty exchange?  Did you lose anything there?  fonestar didn't.  So fuck 'em.

lotsoffun's picture

but mz. fonestar. i thought you were all about the people!  and people need an alternative to that TBTB banks.  and that bitcoin was that alternative, to help people gain some financial freedom.  so, thanks for telling us the truth.  you are just one mother fucking shit head self serving speculative scumbag.  you don't give a fuck about anybody, except your personal gain.  it's all about you.

thanks bud!  that's a whole lot of fun.  now, get the FUCK off ZH


The Mist's picture

Good luck finding adaptars to a currency of which over 10% has been stolen or achieved by fraud.

Why would the mainstream wish to create value to those douches?

Even with the potential of crypto in mind, it'd be much more logical for people to use a different one than bitcoin.

lordylord's picture

Agreed.  It seems that every potential advantage of bitcoin has no footing in reality.  I see absolutley no reason to buy or use bitcoin.  The only reason Foney holds it is because he thinks it is going to 7 figures.  Maybe it will when the dollar collapses, but I wonder how much gold a bitcoin will buy at that time.  I'm guessing none.

Honestly, if I "mined" or bought a significant amount of bitcoins early on, I would be running for the door right now.

tmosley's picture

Gold can be stolen, too.  Guess you'd better abandon ship and go buy some nice government guaranteed bonds that "can't be stolen".

MeelionDollerBogus's picture

Who's gold can be stolen? Mine can't, that's the nice thing about weapons & booby traps and it doesn't hurt to have a boating accident on a regular basis.

tmosley's picture

MFGlobal didn't affect my PM stack.  Mt. Gox didn't affect my bitcoin wallet.

Both gold and bitcoin eliminate counterparty risk.  The only question is "are you stupid enough to reintroduce it?"

People have been highly suspicious of Mt. Gox since early 2013.  I debated opening an account there when I got into bitcoin (to take advantage of the arbitrage there), but what I read dissuaded me.  I did it, and I'm just some guy.  Those who got their coins and dollars stolen had every opportunity to do their own DD, and failed.  They have reaped what they have sown with their lack of investigation.

MeelionDollerBogus's picture

bitcoin is PURE counterparty risk. Nothing of value is made from bitcoins so there is no value but the COUNTER PARTY offering something FOR A BITCOIN or satoshis, and that may go to zero, could at any time, and likely will.

It hit 5.76/btc the other day. Your explanation? screen-capped it right there from localbtc