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Trading Lessons

More Evidence of Gold Price Manipulation

Commodities / Gold and Silver 2013 Oct 16, 2013 - 03:17 PM GMT

By: Profit_Confidential

Commodities

Michael Lombardi writes: While I avidly follow the actions of central banks to see where the gold bullion prices may be headed next, when I look at them today, their actions are speaking louder than words.

Central banks have pretty much stopped selling gold bullion, which is very important. In 1999, a number of central banks in Europe formed an alliance and agreed that they would not sell more than 400 tonnes of gold bullion per year. The agreement was called the Central Bank Gold Agreement (CBGA). In 2004, the CBGA was renewed again; this time the limit was 500 tonnes. Once again, it was renewed for another five years in 2009, and the limit is back to the sale of no more than 400 tonnes of gold bullion per year.


The chart below shows how much gold bullion the central banks in Europe sold in each period of the CBGA. (Source: World Gold Council web site, last accessed October 11, 2013.)

 

Years

Sales in Tones

CBGA 1

1999-2004

2000

CBGA 2

2004- 2009

1884

CBGA 3*

2009-2014

200.3

 

 

 

 

 

* Sales are until 2013.

Notice anything different? The central banks in Europe have put the brakes on their sales of gold bullion. In fact, from September 27, 2012 to September 26, 2013, these central banks only sold 5.1 tonnes of gold bullion! This is hands down the lowest amount sold since the agreement started in 1999.

When it comes to stocks, if owners of a stock aren’t selling and there’s a significant number of buyers who want to buy, the price of the stock usually goes up as the simple rule of economics come into play: supply and demand.

Sadly, when it comes to gold bullion prices, this is not the case. Gold bullion prices are actually going down despite less supply and more demand. The price action in the gold market doesn’t make sense. What if all the conspiracy theories I keep reading about in respect to gold bullion prices being manipulated are right?

As I ponder manipulation in the gold bullion market, I heard recently that the U.S. Justice Department is looking into manipulation in the $5.0-trillion-a-day foreign exchange market. Traders in big banks around the global economy are accused of manipulating key exchange rates. (Source: Reuters, October 11, 2013.) If the biggest market in the global economy can be manipulated, why can’t the gold bullion market be manipulated?

I’m sticking to my guns; the depressed prices of well-managed senior and junior gold-producing companies are a screaming opportunity for investors.

Source -http://www.profitconfidential.com/gold-investments/more-evidence-pointing-to-manipulation-in-gold-market/

Michael Lombardi, MBA for Profit Confidential

http://www.profitconfidential.com

We publish Profit Confidential daily for our Lombardi Financial customers because we believe many of those reporting today’s financial news simply don’t know what they are telling you! Reporters are trained to tell you the news—not what it can mean for you! What you read in the popular news services, be it the daily newspapers, on the internet or TV, is the news from a “reporter’s opinion.” And there’s the big difference.

With Profit Confidential you are receiving the news with the opinions, commentaries and interpretations of seasoned financial analysts and economists. We analyze the actions of the stock market, precious metals, interest rates, real estate and other investments so we can tell you what we believe today’s financial news will mean for you tomorrow!

© 2013 Copyright Profit Confidential - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


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