Is the gold market rigged?
HalfDime
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is the gold market rigged
There is evidence of some manipulation in parts of the gold market, but that is not the same as the entire market being permanently and completely “rigged.”
Proven manipulation cases
Regulators and courts have documented specific manipulation episodes, mainly involving benchmarks and short‑term trading tactics.
In the London Gold Fix scandal, banks such as Barclays and others were fined for abusing the benchmark-setting process used to establish a daily reference price for gold.
JP Morgan paid about 920 million dollars over spoofing in gold and silver futures (placing large fake orders to nudge prices before canceling them), and a former trader received a prison sentence in 2023.
How gold can be manipulated
Manipulation usually targets short‑term price moves rather than long‑term trends.
Techniques include spoofing in futures, building large short positions in “paper gold” (futures and other derivatives), and coordinating trades around benchmark fixings to shift prices at specific times.
These actions can temporarily push prices up or down, affecting investors who rely on fair price discovery, but they are illegal and subject to enforcement when detected.
Debate about systemic “rigging”
There is active debate about whether gold is structurally suppressed or just occasionally abused by bad actors. Some analysts and commentators argue that central banks and large bullion banks deliberately suppress gold to support fiat currencies, but hard, publicly verifiable evidence for a long‑running, coordinated scheme is limited and controversial.
Industry and academic responses to claims of decade‑long benchmark manipulation argue that unusual price patterns can often be explained by market dynamics and do not automatically prove systemic rigging.
The practical takeaway is that gold prices can be distorted in the short run, but long‑term trends still reflect fundamentals like real rates, currency moves, and risk sentiment. To reduce exposure to potential manipulation, some investors favor holding physical bullion over unallocated or highly leveraged paper products, and diversify across assets rather than relying solely on gold. Regulatory scrutiny of benchmarks and derivatives markets has increased, which can help deter the most blatant forms of abuse, though enforcement is never perfect.
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They left out that the banks forced gold miners to pre-sell all of their future gold at low prices in order to get financing, and this kept prices down, while the banks made extra money off of the transactions. It wasn't until around the year 2000 that gold miners started removing their hedges and allowed the price to rise.
Comments
No bank forces anybody to do anything. If the miners wanted financing and had to lock in pricing, it was because traditionally they have been TERRIBLE stewarts of capital, blowing shareholder value left and right. The banks simply wanted a minimum of collateral.
Nobody forced Peter Munk to sell forward. It worked GREAT in the 1980's and 1990's and he was a genius. It stunk in the 2000's and he was a fool.
only when it goes down it is rigged
only when it goes down it is rigged
except when you are convicted and then fined $920 million for doing it.
I knew it would happen.
As long as bullion banks can buy large PM contracts at a fraction of their value there will be temptation to protect the investment and to multiply profits. However the spoofing that does occur is likely rogue bank traders trying to multiply bank profits in order to multiply their bonuses. The bank's risk managers likely turn a blind eye as long as it goes unnoticed by the regulators. At the same time regulators are subject to bribery.
Fact is the government and big banks share the same bed.
When gold and silver move together, it signals the coming end of fiat money.