Posted on 09/28/2015 5:06:30 PM PDT by SkyPilot
With countless settlements documenting the rigging of every single asset class, it was only a matter of time before the regulators - some 10 years behind the curve as usual - finally cracked down on gold manipulation as well, even though as we have shown in the past, central banks in general and the Fed in particular are among the biggest gold manipulators.
That said, we are confident by now nobody will be surprised that there was manipulation going on in the gold casino. In fact, ever since Germany's Bafin launched a probe into Deutsche Bank for gold and silver manipulation, it has been very clear that the only question is how many banks will end up paying billions to settle the rigging of the gold market (with nobody going to prison as usual, of course).
Earlier today, we learned that the Swiss competition watchdog just became the latest to enjoin the ongoing gold manipulation probe when as Reuters reported, it launched an investigation into possible collusion in the precious metals market by several major banks, it said on Monday, the latest in a string of probes into gold, silver, platinum and palladium pricing.
Here are the details that should come as a surprise to nobody:
Global precious metals trading has been under regulatory scrutiny since December 2013, when German banking regulator Bafin demanded documents from Deutsche Bank under an inquiry into suspected manipulation of gold and silver benchmarks by banks. Even though the market has moved to reform the process of deciding on its price benchmarks, accusations of manipulation have refused to go away.
Switzerland's WEKO said its investigation, the result of a preliminary probe, was looking at whether UBS, Julius Baer, Deutsche Bank, HSBC, Barclays, Morgan Stanley and Mitsui conspired to set bid/ask spreads.
(Excerpt) Read more at zerohedge.com ...
the real issue is how the fed does it and why.
the fed’s job is to insure the dollar doesn’t deflate to $0.00 ... as such, anything that hurts the dollar is bad.
when they know some event is about to be announced (and yes, they have insider info), they buy up gold at market towards the end of the day... and the next morning dump it for a loss. this has the effect of downward momentum on gold, giving an upward momentum on the dollar. then the bad news comes out and the dollar’s momentum swings downward, back to normal.
all this costs the fed is the lost ... but that money is part of the $80b/mon (if they’re still printing it)
Really?
QE ended last October.
In this context, yes.
L
You know what Todd, lots of these dishonest manipulations and shenanigans are "legal" in a sense, but not if fraud is committed, or conspiracy. And I wager fraud and conspiracy happen every single trading day. Taken together, this scurvy will infect our entire system. You can pat yourself on the back for your contribution to it. What did they imprison Enron for that was so worse than the collective scam of today's money gamblers?
Bingo. What you posted is precisely the game they play.
Arbitrage is not a manipulation or shenanigans.
And I wager fraud and conspiracy happen every single trading day.
I'm sure they do. But arbitrage is not fraud or conspiracy.
You can pat yourself on the back for your contribution to it.
Pointing out stupid errors has not contributed to the "infection of our entire system". Not even a little bit.
Yeah, that's horrible. And yet the buying ended last October.
It is a crucial part of this rigged shell game, and that is what it is.
I know you are "above" reading articles and things people post in threads, but at least you could have read the next paragraph after in the article Disambiguator posted. Let's post it here, just for everyone else (since you won't read it Todd):
The lynchpin that is holding this dynamic together and keeping the futures markets tied to the underlying cash market is the fact that the futures contracts are deliverable, and a trader can either deliver or take delivery of actual physical silver via his futures position.
Are we seeing a problem yet? The futures markets have lost their viability and trustworthiness because of the MF collapse and theft. At some point in the not-too-distant future, people everywhere are going to realize that the delivery mechanism is not reliable. Heck, just holding cash and/or positions in a futures account is no longer reliable. If the futures market itself is not reliable, traders will no longer attempt to arbitrage these basis spreads because the risk to the trader that the rug will be pulled out from underneath them is simply too great.
And in the metals markets, the delivery process itself is . . . um . . . shall we say, easily corrupted? When you ”take delivery” of physical metals, it doesn’t get sent to your house. All you get is a certificate saying that X number of ounces are being held in a certified vault somewhere with your name on them. After the MF collapse, that sounds like a joke, right? A CERTIFICATE with my NAME ON IT? Yeah. That really is how it works.
When the arbitrageurs finally lose all confidence in the markets, the cash market will decouple from the futures because no one will be willing to take the risk of having their money, positions and/or physical metals stolen/confiscated.
This is all built on dishonesty, greed, and lies.
Great system - until it collapses.
It is too easy to hold physical gold and silver; why bother with certificates?
People don't have to bother with taking actual delivery of the gold, storing it properly themselves with adequate security, paying delivery charges, or having to carry the insurance.
This disadvantages are manifest.
They also tell you this lie:
"An allocated gold account means that there's a certain amount of gold held that directly correlates to the certificate. If you hold an allocated gold account, then you technically own specific gold bars that are held by the issuing bank. Those gold bars cannot be allocated to anyone else or used for any other purpose by the bank. They are, essentially, looking after your gold for you.
See all Glencore Market rumors of $30B debt load collapse
When the physical gold market separates from the paper gold market the price of gold will go to the moon.
What context you referring to? That gold is being manipulated? And other metals are not?
Willful, premeditated, malicious, and totally ridiculous stupidity.
We've been hearing a lot about how the price of gold should really be over say, $3K/oz because of the "true" inflation and the fact that gold is "real" inflation-proof money. Seriously, anyone who truly believed that would be hocking everything buying up gold hand over fist, and then: making a profit.
Most know better but the few who really believe have never managed to get past that first part.
We really shouldn't let the word "arbitrage" get all bent out of shape like what's happened to "hedge fund". Here's what it means:
ar·bi·trage
ˈärbiˌträZH/
nounnoun: arbitrage
It's buying and selling, as old and standard a practice as markets themselves. Sure, it's become popular these days to condemn all market activity, but creating and selling to others that buy and consume is no more sacred than buying and selling to others that buy and sell. These much maligned "middlemen" are necessary; they time shift, distance shift, or lotsize shift to make everything work. Supply and demand is truly the law of the land.
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