My theory of gold manupulation

EagleEye

While gold is a worldwide market it can me manipulated in the market just by strategic buys and stealth sells.



Since 2007, or thereabouts the University of Texas began buying $1 billion worth of gold. This was not the GLD ETF, but physical gold. This buy set off the speculation wave that ended with gold at $1900. However, UT accomplished their buy before gold reached $1100. The rest of the price rise was due to speculation built in a small part by them taking delivery.



The word around the markets at the time was up-up-up! There are heavy buyers and there is no risk.



Just 3 years ago UT sold half of their physical gold and bought GLD. They didn't want to disrupt the market by selling their physical gold outright. Since then, I believe they have slowly moved out of the rest of their physical gold while trying to keep gold pumped up over $1100. By buying strategically to raise the price so they can sell stealthily, they have kept the market from collapsing on top of them.



That is why silver has dropped so much more than gold.



While the sharp drop on Friday is something to be wary of, I fear the day when UT stops protecting its market share. Gold could drop $100 overnight.

BAJJERFAN

So their desire to pass a bill and physically repatriate their gold back to Texas was all hat and no cattle? Why would they propose that if they had no physical gold left?

cohodk

Silver dropped more than gold in 1980 and is always more volatile. While your theory proves thought, it has reached an incorrect conclusion.

gsa1fan

So UT played the Hunt brothers scam but with gold

BAJJERFAN

Originally posted by: gsa1fan

So UT played the Hunt brothers scam but with gold

I think they still have all of it, but don't trust the ones storing it.

ricko

I understand what you wrote Rick... just wondering about the wisdom of them going into

ETF's? Admittedly, I am not versed in high level manipulation methods... but it does

seem strange....Cheers, RickO

EagleEye

They went into ETFs so they could trade and manipulate the market to their advantage. Keeping the price above their entry point.



Keep in mind that a $400,000,000 trading account in GLD can sure be used effectively to manipulate the market.



I have been under the assumption that UT is a main driver in the gold market since 2008.

EagleEye

Originally posted by: cohodk

Silver dropped more than gold in 1980 and is always more volatile. While your theory proves thought, it has reached an incorrect conclusion.

That was thrown out as an aside thought. You may be right.

derryb

UT is a small player when compared to the influence of the banks that drive prices on the COMEX. Metal ETFs are basically reacting to the spot price determined in the COMEX paper futures market.

cohodk

The list of holders is readily available on the web. Perhaps we should prove facts before making assumptions.

derryb

Originally posted by: cohodk
The list of holders is readily available on the web. Perhaps we should prove facts before making assumptions.

Yup, web is a geat tool

cohodk

Another link to a conspiracy blog? You're looking like a fool derryb.

Baley

I wish my gold coins would go up in value so I can sell them for what they used to be worth.

derryb

More foolishness

cohodk

Now I understand why there is a market for supermarket tabloids.

derryb

You've finally found one market that you do understand.
















In a normal world this would be the stuff of tabloids










"The Authority has concluded that Mr Plunkett breached Statements of Principle 1
and 3 of the Authority’s Statements of Principle and Code of Practice for Approved
Persons by placing orders during the 3.00 p.m. Gold Fixing on 28 June 2012 with
the intention of increasing the likelihood that the price of gold would fix below a
certain level. In doing so, Mr Plunkett preferred his own interests to those of a
customer in respect of whom he was managing a product that was referenced to
that specific Gold Fixing. Mr Plunkett was a Director on the Precious Metals Desk at Barclays."











Reality Check: FED says US banks are not sound https://www.sovereignman.com/trends/astonishing-report-from-the-fed-says-us-banks-are-not-sound-18208/[/Shttps://[/S]https://[/S]











"The total exceeds $3.9 trillion worth of risky loans that US banks made with your money."

s4ny

Gold is just another supply and demand market. Gold is trading for what it is worth right now.

Neither overvalued or undervalued. It might be higher or lower in the future.



The long term trend is up. JKG, I think, said in the long run we are all dead.



If you believe there are manipulators pushing gold up, you sell. If they

are pushing gold down, you buy.



I don't think there is any entity that can move gold more than 5-7%.

It is a huge liquid market. Bigger than Texas.



As derryb mentioned, on a day to day basis, the price is primarily set

by Comex futures traders.

derryb

Manipulation of gold prices is taking place at where the price is set. For the time being, COMEX says what gold is worth.




Like the ebay seller who sells gold he does not hold, COMEX will eventually fail.

roadrunner

Univ of Texas a major gold player? They held about 20 tonnes of physical gold at their peak or approx $1 BILL worth...which is a pittance in the scheme of things. What really ignited the gold market in 2009 was China coming out with an update to their national reserves from 600 tonnes to 1054 tonnes....or approx 22X what UTexas brought to the table. And China wasn't alone. The real answer to the physical gold supply and demand equation is how much physical gold has been purchased by the BRICS' central banks since 2009 as well as their citizens. One estimate is that China has added some 6,000-7,000 tonnes in the past 6 years. The People's Bank of China added 600 tonnes of official state gold from 2009 to 2015, an average of 100 tonnes per year...and likely understated.



The gold miners add approx 8.5 tonnes of gold every day of the year. So UT held approx 2-1/2 days of world production. The Chinese added 14 tonnes of gold in September to raise their official gold reserves to 1,722.5 tonnes. UT is a small fry compared to the nations that are actively buying gold (China, India, Russia, etc.) which has amounted to approx 400-500 "official" tonnes per year. No one knows what China is adding "unofficially." Russia has been adding approx 100 tonnes every year.



The Shanghai gold exchange processed a record of 2,197 tonnes of physical gold in 2013. It's the major world player for actual physical transactions....not paper ones as registered on LBMA and Comex. They have already reached 2,165 tonnes withdrawn in 2015 with a month and a half to go in the year. At this rate they will hit 2,680 tonnes or a 22% increase vs. 2013. UTexas at 20 tonnes is nothing compared to these totals. From 2006 to 2014 the Comex "delivered" 1897 tonnes total, or approx 211 tonnes/yr. The numbers have been dropping for years....and 2014 was the lowest by far at only 84 tonnes....less than 4% of the SGE withdrawals. It's clear where the physical transactions actually take place.



The LBMA and Comex trade 30-40 MILL and 10-20 MILL oz of gold every day. That's 1600-1870 tonnes per day. And it's it quite possible the LBMA under-reports actual otc transactions by a factor of 5X. One estimate suggests the LBMA trading could be as high as 426X daily gold mining production (3600 tonnes per day). Again, the UTexas is negligible whether in physical, GLD ETF, or paper contracts.



60 world nations hold more gold than UTexas. Those include "power houses" like Nigeria, Sri Lanka, Morocco, and Afghanistan. I don't ever recall anyone claim those guys are world class market movers in the world gold market. UTexas stopped buying in size 1-2 years before the gold market peaked in Sept 2011. Someone else was responsible for driving up the price from $1200-$1900. And someone else was also responsible for driving the price back down from $1900 to $1100....certainly not UTexas.



The Hunts and Warren Buffet each controlled approx 120-130 MILL oz of physical silver in their time periods. That $1 BILL or so was a large factor in the much smaller silver market (figure the Gold to Silver ratio typically ranges from 40-80). $1 BILL in physical gold doesn't carry all that much market weight unless you sell/buy that much in one day or one week. Over the course of months or a year it's of no consequence.



The amount of gold held by UT is approx 2-3% of their endowment. That is not an unreasonable number for an "insurance" policy and/or diversification play into alternatives. Considering how far the stock market has outplayed commodities in the past 4 years (to 10-20 year extremes in many cases), maybe they should start increasing it again? In 2011 they should have rebalanced by putting more into stocks and a lot less into commodities/PMs. After all, it's an endowment, not a hedge fund.



If I wanted to know the true physical gold flows around the world you need to know what's coming out of the London vaults, being refined into GD bars in Switzerland, and being shipped to Asia. The information coming out of the LBMA is clearly not accurate. Don't give all the credit for "gold price discovery" to the Comex or LBMA. There's also the slight issue of $200-$500 BILL in otc gold derivatives that are now kept totally secret. That data went dark after 1st QTR 2015. UTexas? There are too many other influences up to 170X larger than them on any particular day in the gold market. In mid-2008, the big US banks (probably just 1 or 2 of them) held $600+ BILL in otc gold derivs, or approx 3-4X world annual production at that time. That's effectively up to 13,000 tonnes of gold today controlled by probably a single US Bank. How does the 20 tonnes of UT stack up?



JPM's 17X increase in commodity derivatives during 1st QTR 2015 (from $250 BILL to $4.1 TRILL) shows that they and others have the ability to put on earth-shattering positions at any time. We saw Morgan Stanley put on $12 TRILL in otc interest rate derivs between 4th qtr 2010 and 1st qtr 2011....that devastated the Pimco positions. And in 2nd QTR JPM dropped 75% of that 1st QTR commodity derivative's position. Whatever the goal, it must have been accomplished.



China reserves



Comex deliveries 2006 to 2014



Comex vs. SGE



As of November Bank Participation Report 5 US banks are net short 56,174 gold futures contracts -or 5.6 MILL oz or 175 tonnes

DeepCoin

Good information Roadrunner. I thought UT was a small player, unable to effectively move the market and this proves it out.



Thanks for your research and documenting for me what was my initial take on the matter.

TwoSides2aCoin

Originally posted by: cohodk
Now I understand why there is a market for supermarket tabloids.

That's just offline on a rack. Check out the PC world of phishing, algorithms and a host of other tools for the trade.