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A question from a novice

edmundfitzgeraldedmundfitzgerald Posts: 4,306 ✭✭
in Precious Metals
I've read about gold prices being manipulated to keep the price of gold lower so the banks/countries can buy more of it.
My question is, if they really are manipulating it to keep it lower, then why has gold risen so much during the manipulation ?

TIA

Comments

  • jmski52jmski52 Posts: 22,826 ✭✭✭✭✭
    Gold hasn't been rising. The dollar has been falling.image
    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • CiccioCiccio Posts: 1,405 ✭


    << <i>I've read about gold prices being manipulated to keep the price of gold lower so the banks/countries can buy more of it.
    My question is, if they really are manipulating it to keep it lower, then why has gold risen so much during the manipulation ?

    TIA >>



    I am a novice too, but for what I understood gold should be now over $2000, due to inflation and other factors.
    Sorry I can't explain it better, but somebody here will tell you why.

    I am glad is not, so I can buy more! image
  • roadrunnerroadrunner Posts: 28,303 ✭✭✭✭✭
    I've read about gold prices being manipulated to keep the price of gold lower so the banks/countries can buy more of it.
    My question is, if they really are manipulating it to keep it lower, then why has gold risen so much during the manipulation ?

    How much higher would it be now if there were no bank manipulations? $1500? $2000? Suffice to say the banks are managing a steady fall in the dollar / rise in gold rather than letting chaos ensue without any brakes applied. The dollar is driving this issue not gold. So it's really been a matter of the bankers cushioning the dollar fall since 2001. The net result has been a cushioned gold rise.

    When Bear Stearns went down in March 2008 with tens or hundreds of $BILLIONS in silver shorts on their books, the price should have skyrocketed...rather than crash. It is alleged that JPMorgan took over Bear's silver options/futures/derivatives.....and then doubled it during July 2008 to fully crush gold and silver. It's no secret that the big banks went from net long positions to net short in gold and silver around 2006. That was when gold made it's first parabolic move to $735. Since that time their short positions have been excessively high and concentrated in the hands of 2-4 banks. That may not be manipulation to some but it smells fishy to me. Since 2006, 2 banks have at least once owned the equivalent of 100% of the net short position in Comex silver contracts. That doesn't happen anywhere else in a commonly traded commodity. The banks are considered "hedging commercials" and therefore have not been policed with regards to excessive short positions. If only a few traders tried to take equivalently long positions in gold and silver the CFTC would be all over them....like they did with the Hunts.

    roadrunner
    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • percybpercyb Posts: 3,324 ✭✭✭✭


    << <i>Gold hasn't been rising. The dollar has been falling.image >>



    I concur.
    "Poets are the unacknowledged legislators of the world." PBShelley
  • derrybderryb Posts: 36,795 ✭✭✭✭✭
    Reason for manipulation is to turn investors away from it. Washington would rather you invest in Wall St. They have not been completey successful in turning everyone away from PMs, therefore PMs are seeing some gain.

    "Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey

  • CaptHenwayCaptHenway Posts: 32,128 ✭✭✭✭✭
    Back in 2008 we saw people panicking trying to get their money out of banks and stocks and similar investments and buy gold. This scared the hell out of the financial markets, so they set out to discredit the precious metals.
    Or so some people say.
    Personally, I believe them.
    MOO
    TD
    Numismatist. 50 year member ANA. Winner of four ANA Heath Literary Awards; three Wayte and Olga Raymond Literary Awards; Numismatist of the Year Award 2009, and Lifetime Achievement Award 2020. Winner numerous NLG Literary Awards.
  • morgantypemorgantype Posts: 456
    Regardless of the manipulation - I still like the PMs at this price - especially if you are looking long term!
    Many buy and sell transactions. Let's talk!
  • RedTigerRedTiger Posts: 5,608 ✭
    I never argue for or against manipulation because no one really knows the answer and the truth will never be really known. My personal opinion is that almost all markets are manipulated occasionally, for short time periods. If there is long term manipulation, odds favor that it is to raise prices. Why? Because there is a lot more money to be made that way, and most manipulators are motivated by money, and money = power.

    If one thinks like a spook (a spy), and the op is to manipulate prices higher, one of the best ways to cover those tracks is to release counter-intelligence and tiny bits of verifiable evidence to the contrary, that there are powers manipulating prices lower. Perhaps even set up a small group to take the fall on the opposite side of the real op. That's what clever folks would do. Folks with enough smarts and resources to manipulate multi-billion dollar size markets are likely smart enough to do first grade spy tricks as well.
    Investment blog: gold, stocks and more
  • jmski52jmski52 Posts: 22,826 ✭✭✭✭✭
    If you are allowed to take an infinite position on one side of the market or the other by using bogus paper to finance your position, then you can pretty much cause the direction of the market to go in the direction you want. If you can net a few small fish with each market reversal, the proceeds are steady and lucrative. You don't have to net all of the fish, just a few each time. Roadrunner had the best term for it, "rinse, lather, repeat".

    If you take a longterm position and don't trade a bunch, the trend is your friend. If you must trade, be good at it.
    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • CaptHenwayCaptHenway Posts: 32,128 ✭✭✭✭✭
    I agree.
    The huge amount of naked shorts out there would get killed if the goal was to move the market the other way.
    TD
    Numismatist. 50 year member ANA. Winner of four ANA Heath Literary Awards; three Wayte and Olga Raymond Literary Awards; Numismatist of the Year Award 2009, and Lifetime Achievement Award 2020. Winner numerous NLG Literary Awards.
  • DrBusterDrBuster Posts: 5,378 ✭✭✭✭✭
    Silver is still a bargain....
  • derrybderryb Posts: 36,795 ✭✭✭✭✭


    << <i>Silver is still a bargain.... >>



    Thanks to the manipulation. image



    << <i>Regardless of the manipulation - I still like the PMs at this price - especially if you are looking long term! >>



    Quite correct. In reality they are doing us a favor by keeping the price down. The even better news is that at some point they will no longer be able to manipulate and we will all make out like banditos!

    "Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey

  • DrBusterDrBuster Posts: 5,378 ✭✭✭✭✭


    << <i>

    << <i>Silver is still a bargain.... >>



    Thanks to the manipulation. image



    << <i>Regardless of the manipulation - I still like the PMs at this price - especially if you are looking long term! >>



    Quite correct. In reality they are doing us a favor by keeping the price down. The even better news is that at some point they will no longer be able to manipulate and we will all make out like banditos! >>



    Yup. "Cheap" is still in effect. Silver and copper are the deals, despite a drop coming this year.
  • BigEBigE Posts: 6,949 ✭✭✭


    << <i>

    << <i>Silver is still a bargain.... >>



    Thanks to the manipulation. image



    << <i>Regardless of the manipulation - I still like the PMs at this price - especially if you are looking long term! >>



    Quite correct. In reality they are doing us a favor by keeping the price down. The even better news is that at some point they will no longer be able to manipulate and we will all make out like banditos! >>




    I like it!

    The PM forumites here are probably stacking away 1000 ounces a day at these prices, when things skyrocket pcgs will have to open a cigar and caviar forum for usimageimageimage--------------------BigE
    I'm glad I am a Tree
  • renman95renman95 Posts: 7,037 ✭✭✭✭✭


    << <i>Reason for manipulation is to turn investors away from it. Washington would rather you invest in Wall St. They have not been completey successful in turning everyone away from PMs, therefore PMs are seeing some gain. >>



    I agree with this. Manipulation? The stimulus is the manipulation, imho. When that runs out... I've always heard the econmy is 70% consumer. The average consumer no longer has a house ATM, he's not getting raises or better paying job, so where is this recovery coming from post-stimulus? The market will hit 12,000 or higher trying to lure J6P back to be a bagholder when the next shoe drops. J6P has been twice bitten (2000, 2008) so the lure will have to be real juicy. The next bubble that pops should turn J6P into permanent savers much like the post depression/WWII J6P's.

    Meanwhile, back at the PM ranch, smarter investers are accumulating.

    R95
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