Best of the Week
Most Popular
1. Climate Change Mass Extinction - Birds, Bees and Bugs: Going Going Gone - Richard_Mills
2.A Purrrfect Gold Price Setup! - Peter_Degraaf
3.Who Finances America's Borrowing? Recession Indicator for Independent Thinkers Part 2 - F_F_Wiley
4.America’s One-sided Domestic Financial War - Raymond_Matison
5.Gold Price Summer Doldrums - Zeal_LLC
6.Two Key Events Will Unleash Gold - Jim_Willie_CB
7.Billionaire Schools Teacher in NAFTA Trade Talks - Richard_Mills
8.Get Out Of Crypto Cannabis Bubble Before It Pops and Move Into Bargain Basement Miners - Jeb_Handwerger
9.Stock Market Could Pullback for 1-2 weeks, But Medium Term Bullish - Troy_Bombardia
10.G7 Chaos, Central Banks and US Fed Will Drive Stock Prices This Week - Chris_Vermeulen
Last 7 days
Gerald Celente: Why You Still Need Guns, Gold, and a Getaway Plan... - 23rd Jun 18
Cheap Gold Stocks Bottom Basing - 23rd Jun 18
A Trade War Won’t Be Good for the US Dollar - 23rd Jun 18
SPX/Gold, Long-term Yields & Yield Curve 3 Amigos Update - 22nd Jun 18
Gold - How Long Can This Last? - 22nd Jun 18
Dow Has Fallen 8 days in a Row. Medium-long Term Bullish for Stocks - 22nd Jun 18
Trouble Spotting Market Trends? This Can Help - 22nd Jun 18
Financial Markets Analysis and Trend Forecasts 2018 - A Message from Nadeem Walayat - 21st Jun 18
SPX Bouncing Above Support - 21st Jun 18
Things You Need To Know If You Want To Invest In Bitcoin Now - 21st Jun 18
The NASDAQ’s Outperformance vs. the Dow is Very Bullish - 21st Jun 18
Warning All Investors: Global Stock Market Are Shifting Away From US Price Correlation - 20th Jun 18
Gold GLD ETF Update… Breakdown ? - 20th Jun 18
Short-term Turnaround in Bitcoin Might Not Be What You Think - 19th Jun 18
Stock Market’s Short Term Downside Will be Limited - 19th Jun 18
Natural Gas Setup for 32% Move in UGAZ Fund - 19th Jun 18
Magnus Collective To Empower Automation And Artificial Intelligence - 19th Jun 18
Trump A Bull in a China Shop - 19th Jun 18
Minor Car Accident! What Happens After You Report Your Accident to Your Insurer - 19th Jun 18
US Majors Flush Out A Major Pivot Low and What’s Next - 18th Jun 18
Cocoa Commodities Trading Analysis - 18th Jun 18
Stock Market Consolidating in an Uptrend - 18th Jun 18
Russell Has Gone Up 7 Weeks in a Row. EXTREMELY Bullish for Stocks - 18th Jun 18
What Happens Next to Stocks when Tech Massively Outperforms Utilities and Consumer Staples - 18th Jun 18
The Trillion Dollar Market You’ve Never Heard Of - 18th Jun 18
The Corruption of Capitalism - 17th Jun 18
North Korea, Trade Wars, Precious Metals and Bitcoin - 17th Jun 18
Climate Change and Fish Stocks – Burning Oxygen! - 17th Jun 18
A $1,180 Ticket to NEW Trading Opportunities, FREE! - 16th Jun 18
Gold Bullish on Fed Interest Rate Hike - 16th Jun 18
Respite for Bitcoin Traders Might Be Deceptive - 16th Jun 18
The Euro Crashed Yesterday. Bearish for Euro and Bullish for USD - 15th Jun 18
Inflation Trade, in Progress Since Gold Kicked it Off - 15th Jun 18
Can Saudi Arabia Prevent The Next Oil Shock? - 15th Jun 18
The Biggest Online Gambling Companies - 15th Jun 18
Powell's Excess Reserve Change and Gold - 15th Jun 18
Is This a Big Sign of a Big Stock Market Turn? - 15th Jun 18
Will Italy Sink the EU and Boost Gold? - 15th Jun 18
Bumper Crash! Land Rover Discovery Sport vs Audi - 15th Jun 18
Stock Market Topping Pattern or Just Pause Before Going Higher? - 14th Jun 18
Is the ECB Ending QE a Good Thing? Markets Think So - 14th Jun 18
Yield Curve Continues to Flatten. A Bullish Sign for the Stock Market - 14th Jun 18
How Online Gambling has Impacted the Economy - 14th Jun 18
Crude Oil Price Targeting $58 ppb Before Finding Support - 14th Jun 18
Stock Market Near Another Top? - 14th Jun 18
Thorpe Park REAL Walking Dead Living Nightmare Zombie Car Park Ride Experience! - 14th Jun 18

Market Oracle FREE Newsletter

5 "Tells" that the Stock Markets Are About to Reverse

How Goldman Sachs is Manipulating Gold Prices

Commodities / Gold and Silver 2013 Apr 12, 2013 - 12:41 PM GMT

By: Money_Morning

Commodities

David Zeiler writes: If you want a lesson on how to manipulate gold prices, you need only look at what Goldman Sachs Group Inc. (NYSE: GS) has been doing over the past few months.

Goldman set the table by predicting a turn in gold prices back in December 2012, which no doubt contributed to the precious metal's 5% decline in the first two months of the year.


At the end of February, Goldman issued a research report that said the big Wall Street bank had soured on the yellow metal, and dropped its three-month target for gold prices from $1,825 an ounce to $1,615, its six-month forecast from $1,805 to $1,600, and its one-year outlook from $1,800 to $1,550.

Then, just yesterday (Wednesday), Goldman doubled down on its negative outlook for gold prices.

The bank's new targets for gold prices are $1,530 in three months, $1,490 in six months and $1,390 in one year.

The double whammy - two downgrades in two months - had its intended effect, as gold prices fell 2%, to $1,558.80, after Goldman released its report. It was the biggest single-day percentage drop for gold in nearly six months.

"If you've ever suspected gold prices are being manipulated, you're not alone - and you're right, they are," said Money Morning Chief Investment Strategist Keith Fitz-Gerald.

The proof is right in front of us.

How Goldman Uses its Forecasts to Manipulate Gold Prices
In addition to the lower targets, Goldman's reports spell out why the bank thinks gold prices will decline, which are at least as important in the price manipulation strategy as the targets themselves.

Here's what Goldman said in its February report:

"The decline in prices since last fall and our updated forecast [emphasis ours] suggests that the turn in the gold price cycle is likely already underway. As a result, although our U.S. economic forecasts point to modest near-term upside to gold prices, we believe that a sharp recovery in prices to our previous price forecast is unlikely."

Goldman brazenly cites its own forecast as part of the evidence that the downward move in gold prices is happening. In other words, they're practically bragging about their manipulation of gold prices.

Then Goldman applies a Jedi mind-control technique to remedy the inherent contradiction in its forecasts for the U.S. economy and its targets for gold prices: "These are not the forecasts you are looking for."

Yesterday's report again advised investors to ignore economic realities and trust in Goldman instead.

"Despite resurgence in euro-area risk aversion and disappointing U.S. economic data, gold prices are unchanged over the past month, highlighting how conviction in holding gold is quickly waning," Goldman said in its research note.

Meanwhile, Fitz-Gerald said, the reasons gold is more likely to rise than fall - central bank money printing, central bank gold-buying, slowing production at gold mines, more Euro-zone troubles - haven't changed.

How Goldman's Gold Price Manipulation Works
The purpose behind all this, Fitz-Gerald explained, is to "get the weak money out, so they can accumulate more gold themselves."

In fact, this is a widely used Wall Street strategy that dates back at least to the 1920s.

For that matter, there's plenty of evidence Goldman uses this strategy to manipulate stocks and other commodities all the time.

Here's how it's done.

Often, the big banks are making subtle trades to help push the commodity - be it gold, a stock or anything else in the markets - in the direction they want it to go.

Issuing reports helps the cause by getting the media to transmit and amplify the message manipulators like Goldman are trying to send.

"Bigger firms like JPMorgan, Goldman Sachs, PIMCO or any of a dozen other behemoths simply release a "research report' that is interpreted as gospel by the mainstream media and swallowed hook, line and sinker by millions of unsuspecting investors as a reason to buy or sell," Fitz-Gerald said.

For example, the MarketWatch headline on its story about yesterday's Goldman downgrades of gold prices proclaimed, "Another blow to gold - Goldman Sachs slashes 2013, 2014 forecast."

That story noted that Deutsche Bank AG (NYSE: DB) also had lowered its forecast for gold prices just the day before.

In short, investors need to pay close attention to what the big banks say about stocks and commodities, because very often they are betting in the opposite direction. If you fall for the misinformation, you'll end up on the wrong side of the trade - losing money while Wall Street operators like Goldman reap the big profits.

How to Deal With the Market Manipulators
Fitz-Gerald advised investors not to get frustrated and angry about Wall Street manipulation of stocks and gold prices, but rather to try to understand what's going on and use it for their own benefit.

"Do what Wall Street does, not what it says," Fitz-Gerald said.

That's not as hard as one might think, he said, noting that retail investors don't have the pressure to move around large amounts of money every day and don't need to worry about major moves that could tip off their strategies to other big competitors.

"You can use tactics the big boys can't," Fitz-Gerald said.

One thing that retail investors can do to avoid becoming a Wall Street patsy, he said, is to dollar-cost average (buy a set dollar amount of an investment at regular intervals) into things like gold and stocks.

"Dollar-cost averaging forces you to buy more when the price is low and less when the price is high," Fitz-Gerald said. "Maybe you can't compete with the big banks, but you can beat them at their own game."

Source :http://moneymorning.com/2013/04/11/goldman-sachs-is-manipulating-gold-prices-right-before-your-eyes/

Money Morning/The Money Map Report

©2013 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules