Hi.

I read all the time that gold is manipulated by the "powers that be" shorting gold. How do you push the price of a stock / commodity down?

Does it work something like this:

1) Price of gold is say $650
2) Manipulator wants the price down to $630, so promises to sell 5 tons gold in a months time for $630
3) Buyers of gold say bugger paying $650 now, I can get it for $630 in a months time, so I do a deal with the manipulator.
4) Due to 3, the gold price goes lower.

Or is that a load of crap? Any help appreciated.

Cheers,
crude.

Oh well, nobody knows :-(

Cheers,
crufe

A short is strictly selling something you don't have and covering it with a borrowing. So you borrow gold from the central bank, sell it and cause the price to drop, as there is not such a great interest in physical gold, supply exceeds demand, etc.

The question is, how much gold have the investment banks borrowed from the central banks and sold on the market?

The basics of an old rumour, as I remember, are that central banks and certain investment banks have worked in collusion to manipulate the market, central banks lending gold and the investment banks acting to implement their wishes. In this way, the central bank does not have to register any sales of bullion, as it has just been lent out (much like a repo).

I have no idea on the truth of this rumour.

[nudge, nudge, wink, wink]

Look up GATA - they have been banging on about this for years.

Additionally, because the gold 'given' to investment banks is not real (in the sense that a truck does not pull up and unload the gold outside a bank) the gold held be the banks can be loaned out several times over.....allegedly.
The market can therefore be flooded with non-existant gold - its all paper.

The Manipulation Of The Gold Market

http://www.gata.org/node/11

Hi

Thanks for the replies. I think it was my ignorance of shorting on why I didn't understand how the price would be pushed down. All makes sense now.

I'd imagine that if everyone decided to demand physical gold rather than paper versions, things would fall apart very very quickly...

Cheers,
crude.

LOL @ gold bug conspiracy nutters

Lol, whenever something goes down its just shorters being a pain, when anything goes up its on fundamentals and its completely correct. Exactly the same talk you hear on just about every stock on the market.

If people are reducing exposure and moving into cash, everything goes down. Simple as.

Hi

My question was regarding the mechanism these "so-called" manipulators use, i.e. shorting. I've got no gripes about prices going down - that's just part of investing, you take the rough with the smooth...

Don't think anyone on this thread has whinged about anything or acted like a nutter.

Regards,
crude.