Gold Bullion Price Suppression To End? Bullion Bank Traders Arrested For Manipulating Market

Gold Bullion Price Suppression To End? Bullion Bank Traders Arrested For Manipulating Market

- CFTC fines UBS, HSBC and Deutsche Bank millions of dollars each for gold price manipulation 
- Deutsche Bank 'engaged in a scheme to manipulate the price of precious metals futures contracts'
- UBS 'attempted to manipulate the price of precious metals futures contracts'
- HSBC engaged 'in numerous acts of spoofing with respect to certain futures products in gold and other precious metals'
- Gold 'experts' continue to deny legal rulings, evidence amassed by GATA, admissions by banks and central banks including Greenspan and monetary history
- Counter intuitively, gold bullion price suppression is good news for those prudent few who look at the situation 'holistically', take a long term view and buy gold and silver bullion as insurance

Editor: Mark O'Byrne

 

Source: David Brady, CFA @GlobalProTrader

 

A multi-agency CFTC-led investigation that also involved the Department of Justice and the FBI has resulted in 'criminal and civil enforcement actions against three banks and six individuals involved in commodities fraud and spoofing schemes.'

Deutsche Bank, UBS and HSBC had all been accused of engaging in manipulating the gold price and the bullion banks have now admitted they are guilty of the charges and have paid fines.

All those named in the investigation have been found to be manipulating the gold and other precious metals markets.

The banks face fines, although they can hardly be described as hefty given the size of their balance sheets and impact of their actions. Deutsche Bank and UBS have agreed to pay $30 million and $15 million respectively, while HSBC will pay $1.6 million.

The fines have been reduced as each of the banks assisted the CFTC in investigations which go back to activities as far back as 2008 and admitted the charges.

For years the idea that precious metals markets are subject to more than just free market forces has been dismissed by the mainstream media and some market commentators  Many have referred to gold and silver manipulation and gold bullion price suppression as topic fodder for the conspiracy and deep web forums. This is despite many years and reams of much evidence to the contrary.

Isn't this all illegal? Shouldn't someone go to jail?

Yes, as part of the 2010 Dodd-Frank financial reform, spoofing is a criminal offence. What is spoofing?

Spoofing, as a reminder, involves placing bids to buy or offers to sell futures contracts with the intent to cancel them before execution. By creating an illusion of demand, spoofers can influence prices to benefit their market positions (ZeroHedge)

As explained above, the fines for UBS and Deutsche Bank are north of ten million, while the fine for HSBC is slightly less at £1.6 million. Surely traders and other connected employees should be facing prison?

As of Monday it sounds as though the authorities feel the same way. ZeroHedge via Reuters updates reported:

US authorities were set to arrest several people on Monday as part of the spoofing and manipulation probe. The individuals who are set to be perp walked, were previously employed as traders by UBS, Deutsche Bank and HSBC, and will be charged as part of the multi-agency probe,

Last August, a U.S. appeals court upheld the conviction of former New Jersey-based high-speed trader Michael Coscia who was the first individual to be criminally prosecuted for spoofing in the US, aside from Sarao of course.

Does this mean that manipulation is coming to an end?

Possibly but it is unlikely to, at least until monetary authorities including China's PBOC wish it to. Or indeed, the media give Gold Anti-Trust Action Committee's (GATA) allegations a fair hearing and report on the matter in a balanced manner and thereby put pressure on monetary authorities to desist from rigging precious metal prices through bullion bank proxies or indeed official partners such as the New York Federal Reserve.

Last May we brought you commentary from Jim Rickards. There he outlined how China was an active supporter of the gold bullion price suppression as it works in their short-term favour:

The price is being suppressed until China gets the gold that they need. Once China gets the right amount of gold, then the cap on gold’s price can come off. At that point, it doesn’t matter where gold goes because all the major countries will be in the same boat. As of right now, however, they’re not, so China has time to catch-up.

China has been saying, in effect, “We’re not comfortable holding all these dollars unless we can have gold. But if we are transparent about the gold acquisition, the price will go up too quickly. So we need the western powers to keep the lid on the price and help us get the gold, until we reach a hedged position. At that point, maybe we’ll still have a stable dollar.”

Gold and other markets (including bond yields) are 'systemically suppressed'

Manipulation isn't unique to precious metals markets. We have seen it in LIBOR most prominently but also elsewhere in the financial sphere. We must also remember that there are 'legitimate' forms of manipulation such as monetary policy which sees both the price and value of our currencies maniplated and indeed debased over the long term.

Manipulation is not victimless. To Joe Public a bank receiving a $30 million fine no longer seems newsworthy (it isn't, it didn't appear in the mainstream media) nor does the likely imprisonment of individual traders. It's just 'one of those things' which we pretty much expect to go on.

But everyone is a victim. Gold bullion price manipulation, interest rate 'setting' and LIBOR fiddling all mean that markets are rigged. It increases the risks and skews the odds for the average saver or investor who does not have the financial awareness, acumen or power to fight back.

Twitter had some of the best comments regard the latest findings of gold manipulation. Ned Naylor-Leyland (@NedNL) put it very well on Twitter:

Gold 'experts' who continue to deny legal rulings, reams of physical evidence, common sense & basic monetary history by claiming

'Well, Gold may be manipulated but it's not systemically suppressed' pic.twitter.com/Np8EorGiX1

Editors Note
Some considering investing in gold and silver, have asked us what is the point of investing in precious metals if there prices are suppressed by bullion banks with the consent or indeed encouragement of monetary authorities?

We have been asked this since 2003 when GoldCore was founded. The Gold Anti-Trust Action Committee (GATA) were alleging manipulation back then and indeed even then had a lot of evidence to suggest manipulation had been taking place including central bank and other insider admissions of gold price suppression.

Are answer has been consistent. Ultimately the forces of supply and demand for actual physical gold and silver bullion will determine the prices of the monetary metals in the long term. Electronic and paper suppression of prices through futures markets will shake out weak hands, deter some investors and speculators and impact both sentiment in the short and the medium term. However, ultimately the fundamentals of physical supply and demand will lead to higher prices in the long term. This was seen in the 2000 to 2011 gold bull market.

Those who are concerned should take a step back and look at the bigger picture. This presents an opportunity rather than a risk. A suppressed price means there is an opportunity for investors to accumulate more bullion at artificially depressed prices. Ironically and counter intuitively, gold price suppression is good news for those prudent few who look at the situation 'holistically', take a long term view and buy gold and silver bullion as insurance rather than purely for capital gains.

The key is to ensure you are holding physical bullion, outside of the paper system. Keep it safe by owning segregated and allocated gold and silver, in ultra secure vaults, in the safest jurisdictions.

 

Related reading

Gold and Silver Manipulation: Can It Be Empirically Verified?

Silver Bullion Manipulation By Banks Proven In Traders Chats

 

News and Commentary

Gold dips on outlook for U.S. rate hikes (Reuters.com)

Asian Stocks Gain; Investors Adapt to Higher Yield (Bloomberg.com)

U.S. Mint American Eagle coin sales fall from prior year (Reuters.com)

UK’s Royal Mint Launches Gold-Backed Cryptocurrency (CoinTelegraph.com)

Hatton Garden jewellery raiders ordered to pay £27.5m (JewelleryFocus.co.uk)


Source: SoundingLine

Video: Former Fed Chair Alan Greenspan Sees Bubbles in Stocks and Bonds (Bloomberg.com)

We may be heading for a major dollar bear market (MoneyWeek.com)

Two-Thirds Of UK Pension Funds Are In The Red - $300 Billion Shortfall Revealed (ZeroHedge.com)

Forget Stocks, Look At EU Bonds - They Are The Real Problem (Tumluongo.me)

Bad Debt Problem in Southern Europe Is the Worst in the World (TheSoundingLine.com)

Gold Prices (LBMA AM)

01 Feb: USD 1,341.10, GBP 941.99 & EUR 1,077.98 per ounce
31 Jan: USD 1,343.35, GBP 950.29 & EUR 1,078.98 per ounce
30 Jan: USD 1,345.70, GBP 954.37 & EUR 1,083.56 per ounce
29 Jan: USD 1,348.40, GBP 955.07 & EUR 1,085.46 per ounce
26 Jan: USD 1,354.35, GBP 950.21 & EUR 1,087.41 per ounce
25 Jan: USD 1,360.25, GBP 954.35 & EUR 1,095.27 per ounce
24 Jan: USD 1,350.50, GBP 957.50 & EUR 1,093.77 per ounce

Silver Prices (LBMA)

01 Feb: USD 17.19, GBP 12.09 & EUR 13.82 per ounce
31 Jan: USD 17.23, GBP 12.17 & EUR 13.84 per ounce
30 Jan: USD 17.30, GBP 12.24 & EUR 13.91 per ounce
29 Jan: USD 17.34, GBP 12.33 & EUR 13.99 per ounce
26 Jan: USD 17.40, GBP 12.21 & EUR 13.99 per ounce
25 Jan: USD 17.52, GBP 12.29 & EUR 14.12 per ounce
24 Jan: USD 17.19, GBP 12.16 & EUR 13.93 per ounce


Recent Market Updates

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- Global Pension Ponzi – Carillion Collapse One Of Many To Come
- The Next Great Bull Market in Gold Has Begun – Rickards
- Gold Bullion May Have Room to Run As Chinese New Year Looms
- Digital Gold Flight To Physical Gold Coins and Bars
- Gold and Silver Bullion Are Only “Safe Investments Left” – Stockman

Comments

fbazzrea Thu, 02/01/2018 - 12:24 Permalink

start lockin' 'em up and see if that slows down the banksters'  felonious trades. if the threat of doin' time for individual actors within the larger scam outweigh potential gains, institutional manipulation will stop. unless they're going to rig their algos which leave them no place to run

manofthenorth zorba THE GREEK Thu, 02/01/2018 - 13:03 Permalink

Exactly correct. 

When the "punishment" is a simple fine it is reduced to a cost of doing business.

Jail time would be a deterrent but when the main actors names and faces never see the light of day let alone a subpoena or a courtroom I would think that there is little hope of ending manipulation.

Now if we could get some old fashioned justice, such as a short drop with a quick stop courtesy of a piece of rope, that may give pause to some.

The old pitchfork and torches program would have the greatest and longest lasting effect.

In reply to by zorba THE GREEK

anarchitect zorba THE GREEK Thu, 02/01/2018 - 14:53 Permalink

Yes, exactly.  These traders were probably just trying to get a little action for themselves after witnessing or even placing massive sell orders on behalf of central banks and their fellow travelers.  Small-time stuff, really.  And penny ante fines.  Notice that no US banks were prosecuted, probably because they know where the bodies are buried and might sing.

In reply to by zorba THE GREEK

Easyp Thu, 02/01/2018 - 12:45 Permalink

Well at least there is proof in the public domain that traders have rigged gold prices.  Fair to assume all US markets are also rigged in some way.  Invest at your own risk!

MoreFreedom Easyp Thu, 02/01/2018 - 15:28 Permalink

As the article says, "Ultimately the forces of supply and demand for actual physical gold and silver bullion will determine the prices of the monetary metals in the long term."   And I agree.  The spoofing only temporarily affects the price and not a lot.  But it does affect trades while it's going on, but it seems safe to assume the biggest actors (China, the Fed, other countries) are more interested in suppressing the price.  Thus, it helps real buyers save money, which results in the typical unintended consequence of their actions.

In reply to by Easyp

Jungle Jim Thu, 02/01/2018 - 12:47 Permalink

"Ultimately." There's that word again. *Ultimately* the sun will become a cold, dark cinder. I'd like gold to be worth something a little sooner than that.

Bastiat Thu, 02/01/2018 - 13:16 Permalink

Gold Bullion Price Suppression To End?

Not today: USD -.32%; Au -.21$;  Ag - 1.2%

Waves hand, palm out in a slow arc:  "This is not the safe haven you were looking for."

ReturnOfDaMac Demon Slayer Fri, 02/02/2018 - 19:25 Permalink

Wtf?  Another silly assed newbie.  Look chimp, before you get out of daddy's basement and start commenting here, spend a few more months reading comments, learning about the markets, getting some pedigree or perhaps grow some intellect.  I won't call you a POS, out of respect for "shit".  Now STFU and if you are old enough, BTFD, young biatch.

In reply to by Demon Slayer

ReturnOfDaMac Demon Slayer Fri, 02/02/2018 - 19:25 Permalink

Wtf?  Another silly assed newbie.  Look chimp, before you get out of daddy's basement and start commenting here, spend a few more months reading comments, learning about the markets, getting some pedigree or perhaps grow some intellect.  I won't call you a POS, out of respect for "shit".  Now STFU and if you are old enough, BTFD, young biatch.

In reply to by Demon Slayer

Dragon HAwk Thu, 02/01/2018 - 13:35 Permalink

Gold need to  move between the people, when that happens,  price manipulation in paper will become meaningless. hoarding gold does not give it a value, as much as buying a tractor or some hanging beef does.

Goldbugger Thu, 02/01/2018 - 15:29 Permalink

Just stop UBS, HSBC and Deutsche  from trading GOLD and Silver for 90 days as a  fine then see what happens. And Fuck the CFTC they fine them and let these other fuckers continue their illegal manipulations.

ReturnOfDaMac Thu, 02/01/2018 - 15:58 Permalink

That which cannot continue will not continue, PM manipulation has been ongoing for decades and continues to this day, unabated, therefore I conclude it will continue.  While it does, take the discount, shut your gums, and enjoy the sale.  When CB's can no longer control the price, your grand-kids will thank you for their riches.  If you want riches in YOUR time, BTFD...

Montana Cowboy ReturnOfDaMac Thu, 02/01/2018 - 19:36 Permalink

Is it really at a discount? Show me any commodity that can be sold at a discount without depleting? Unlike perishable commodities, metal has had decades to deplete. What most gold bugs don't know is that the 2016 mining figures show about 12,000 ounces of gold are mined from the earth EVERY HOUR, 24/7/365. And sales in the physical market are at a 10-year low. There is a glut.

In reply to by ReturnOfDaMac

wattie Thu, 02/01/2018 - 17:00 Permalink

More arrests recently, farcical fines.

No Investors compensated for banker indiscretions!!

Join the Global Class action fightback against gold/silver manipulation!

Investors from 18 countries around the world have signed up so far...will you?

Together we can end this.

http://www.leonkaye.co.uk/class-actions/possible-manipulation-gold-silver-prices-1999-onward-proposed-class-action/

www.goldclassaction.com

www.silverclassaction.com

 

Apeon Thu, 02/01/2018 - 17:38 Permalink

Avoid Rickards promotions like meadow muffins----he will sneak an 'opt out' option in one of the three or four dozen emails he sends you, and all of  sudden he has a 100 bucks of your money----of course he is a 'Respected' expert in the article---which tells me a lot about the article.

Montana Cowboy Thu, 02/01/2018 - 18:56 Permalink

There remains one logical barrier to this suppression theory. If prices have been artificially suppressed in paper markets for decades, it means that the metal in the physical markets is a fire-sale bargain. Then why isn't the physical supply depleted after decades of suppression? If you can't deplete the physical supply at fire-sale pricing, how can anyone expect it to rise?

Then there is another fallacy in plain sight. Gold-bugs have been celebrating gold's slow but steady rise. But physical sales are at a 10 year low. So the rise in price must be a paper rise in the paper markets. Isn't this the price discovery method that gold stackers have been condemning for decades? Why are these physical advocates now celebrating a purely paper price escalation absent any confirmation in the physical market?

Ace Ventura Montana Cowboy Fri, 02/02/2018 - 08:08 Permalink

Good questions. Being no expert myself, I can only speculate. To the extent demand for physical is at a 10-year low, I suggest that may be in part because:

1. Joe Sixpack is no longer as active in the physical market as he was during the 2008-2014 range. At the time, there was plenty of concern regarding the insane levels of printing involved with the QE/TARP shenanigans.

2. Joe Sixpack is tapped out. Once the price went north of $1k/oz....that pretty much closed the door on any further bulk acquisition of physical for the average main-streeter.

3. Given that so much is outright manipulated/massaged in terms of reported numbers, there may exist the possibility that demand is likewise under-reported.

4. Regarding #3, it seems odd that demand for physical would be at all time lows, when juxtaposed with reports that banks/governments are actually accumulating it in significant quantities.

In the end none of us knows what's REALLY going on, unless we're senior members of George Carlin's famous 'Big Boyz Klub'. That, and the age-old saying that there are three sides to every story.....one of which is the truth.

Did not down-vote you, BTW.

 

In reply to by Montana Cowboy

atomic balm Montana Cowboy Fri, 02/02/2018 - 12:41 Permalink

Prices in general have gone up around 4.4% compounded yearly over last 100 years

Gold was $20 in 1911, $1900 in 2011-this is a rise of 4.66% compounded annually

Gold had more than kept up with prices- where is the price suppression?

Today gold is $1333- a rise of 4.00% over 107 years

Gold was high in 2011, and is low today.  Let us take the average of 4.66 and 4.0- 4.33% 

4.33% is awfully close to 4.4%   Who is complaining about what?

But then what is inflation.  The real, hard core definition is an increase in the money supply REGARDLESS OF WHAT HAPPENS TO PRICES.  Try to find accurate money supply data.  The world money supply is gold plus silver plus paper plus crypto.

For gold to really come into its own, it would have to be the only medium of exchange.  The other monies suppress gold's purchasing power. If paper disappeared each ounce of gold might buy 50-75 times more than it currently does.

Just take the world's wealth and divide by the number of ounces of gold available [above ground, I presume]

In reply to by Montana Cowboy