Gold Price Fixing: Time up for Golden Balls?
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Hi folks,
Gold price inquiry to look into ‘fixing’; what? You thought it was market forces?
Time up for Golden Balls?
How London’s gold and silver prices are “Fixed”
LONDON (Reuters) – London’s gold and silver markets face the possibility of a probe into price setting, putting a century-old practice under the spotlight after the Libor rigging scandal that exposed widespread interest rate manipulation by banks.
The U.S. Commodity Futures Trading Commission (CFTC) has started internal discussions on whether the daily setting of gold and silver prices is open to manipulation, the Wall Street Journal reported on Wednesday.
The CFTC declined to comment, while the chairs of the London Gold Fixing Company and London Silver Fixing Company were not available for comment.
CFTC Commissioner Bart Chilton, attending the annual Futures Industry Association conference in Boca Raton, Florida, declined to specifically address the report, saying: “Given the clubby manipulation efforts we saw in Libor benchmarks, I assume other benchmarks – many other benchmarks – are legit areas of inquiry.”
Britain’s Financial Services Authority (FSA) also declined to comment on whether it was looking into gold and silver price setting, but said on Thursday it is feeding into a wider review of price benchmarks run by the International Organisation of Securities Commissions (IOSCO) – a global umbrella group for markets regulators.
IOSCO is set to publish a report in May with principles on how to compile important benchmarks to avoid rigging.
The setting, or “fix”, of the gold price in London dates back to 1919, originally involving NM Rothschild & Sons, Mocatta & Goldsmid, Samuel Montagu & Co, Pixley & Abell and Sharps & Wilkins. Silver price setting started in 1897.
Currently, gold fixing happens twice a day by teleconference with five banks: Bank of Nova Scotia-ScotiaMocatta , Barclays Bank Plc , Deutsche Bank AG, HSBC Bank USA , NA and Société Générale . The fixings are used to determine prices globally.
etc.
Remains to be seen if it has any effect in the real world…
L,
Sid.Hi Folks,
‘ello ‘ello ‘ello, what’s all this then?:
Yahoo! Finance UK – Fri, Apr 12, 2013 18:52 BST
After 12 years of boom, gold prices bust
“The scale of the decline has been absolutely breathtaking.”
For the first time in 12 years, the gold price is now officially in decline.“The scale of the decline has been absolutely breathtaking. We tried to rally and that just didn’t get anywhere … there hasn’t been any downside support, it’s like a knife through butter,” Societe Generale analyst Robin Bhar said.
Gold fell below $1,500 an ounce on Friday, a drop of more than 20% from its record 2011 highs, putting it in bear market territory for the first time since 2001.
The metal was heading for a 4.9% decline this week, its third such drop in a row and the biggest since December 2011. It was down some 22% below the record peak hit in September 2011 at $1,920.30.
…
“If Cyprus can break the gold market, then (there are) many reasons to be worried, with Slovenia, Hungary, Portugal, Spain and Italy in line,” Milko Markov, an investment analyst at S.K. Hart Management, said.“It is a make-or-break moment for gold … if the market can’t handle the reallocation and Cyprus, then there is really a need for a bear market.”
Behind the scenes fixing for a new gold buying opportunity for TPTB, or a true sign of [strike]deflationary[/strike] negative inflation forces at work? :huh:
L,
Sid.Hi again,
Even ‘bit coin’ has taken a dive:
The bubble bursts on e-currency Bitcoin
By Anne Renaut | AFP – Sat, Apr 13, 2013 07:49 BSTMany saw it coming, but that didn’t stop the Bitcoin bubble from bursting: after rising to dizzying heights, the digital currency suffered its first true crash this week.
The price of the virtual “geek” currency had soared through the stratosphere in recent weeks, trading for a high of $266 on Wednesday — only to come hurtling back to Earth in just three days.
By Friday, a single Bitcoin was worth just $54, according to the Mt. Gox platform, which manages 80 percent of the Bitcoin transactions and had to briefly shut down trading Thursday.
“There was a LOT of short-term speculation happening” from people who wanted to earn a buck from the soaring prices and cash out before the fall, Bitcoin Foundation chief scientist Gavin Andresen told AFP.
“Wild price swings are not good for Bitcoin.”
You don’t say? But it gets better:
Also worrying, the central bank noted, is that the virtual currency has been vulnerable to cyber attacks, including in June 2011, when hackers targeted virtual wallets and wiped some people’s accounts clean.
But that risk has failed to sway many.
For one, Hanke was not entirely convinced by the European Central Bank’s critiques. “If private money starts to become a threat for governments, they come up with many reasons why this is a bad idea,” he said.
And the currency appeared to have at least two high-level champions: the Winklevoss brothers, known in part for accusing Facebook (NasdaqGS: FB – news) founder Mark Zuckerberg of having stolen the idea for the social network from them.
On Thursday, they told The New York Times that they had bought $11 million worth of Bitcoins — that value assessed before the crash — praising it as a mathematical system “free of politics and human error.”
Oh the hubris. But of course, most ‘money’ is in fact little better than hypothetical bit coins… has the Great Financial Whoopi cushion finally started to [strike]deflate[/strike] negatively inflate? :unsure:
L,
Sid.Hi Folks,
Going down?:
Gold is headed for its biggest two-day drop in 30 years, as investors continue to sell their holdings in the metal after it entered a bear market. At one point on Monday, the price dropped more than $30 in minutes.
The latest slide came among a wider sell-off in commodities sparked by China reporting weaker than expected growth, raising doubts about the global economy. Slowing growth means inflation looks less of a threat, so can reduce gold’s appeal as a store of wealth when prices are rising.
But the “safe haven” metal had already entered bear market territory last week, loosely defined as a fall of 20pc or more from its peak. On Friday, the spot gold price dropped below $1,500, down from its record intraday high of $1,921.41 in September 2011.
Ole Hansen, Saxo Bank’s head of commodity strategy, said the market was now in “liquidation mode” as people seek to reduce their exposure to the metal, predicting the price could hit $1,300 before finding any kind of support.
“It’s first and foremost this major technical breach we had last week,” he said. “That really killed it off.
…“The Fed has given the signal that there’s a possibility to reduce QE, and that took a lot of trust out of gold,” said Dominic Schnider, an analyst at UBS Wealth Management. “And people recognize that an environment where you have no inflation is a powerful driver to get out of the metal.”
“…an environment where you have no inflation”. Lets see, oh I know ‘negative inflation’? No wait a minute, um, er how about non-flation? Un-flation? Un-inflation? Neg-flation? Dammit, what do you call the whoopi cushion when it goes down, ‘fart-ation?
Kuntsler was all about Gold and ‘bit-coin’ as well today, what he calls Smack Down Time, even the possibility of a conspiracy…. :blink:
L,
Sid.P.S. Got it – Outflation! 😆
Hi Folks,
Its not just Gold either, its everything else too:
Rolling Stone, By Matt Taibbi April 25, 2013 1:00 PM ET
Everything Is Rigged: The Biggest Price-Fixing Scandal Ever
The Illuminati were amateurs. The second huge financial scandal of the year reveals the real international conspiracy: There’s no price the big banks can’t fix
…
The Scam Wall Street Learned From the Mafia
Why? Because Libor already affects the prices of interest-rate swaps, making this a manipulation-on-manipulation situation. If the allegations prove to be right, that will mean that swap customers have been paying for two different layers of price-fixing corruption. If you can imagine paying 20 bucks for a crappy PB&J because some evil cabal of agribusiness companies colluded to fix the prices of both peanuts and peanut butter, you come close to grasping the lunacy of financial markets where both interest rates and interest-rate swaps are being manipulated at the same time, often by the same banks.
“It’s a double conspiracy,” says an amazed Michael Greenberger, a former director of the trading and markets division at the Commodity Futures Trading Commission and now a professor at the University of Maryland. “It’s the height of criminality.”
The bad news didn’t stop with swaps and interest rates. In March, it also came out that two regulators – the CFTC here in the U.S. and the Madrid-based International Organization of Securities Commissions – were spurred by the Libor revelations to investigate the possibility of collusive manipulation of gold and silver prices. “Given the clubby manipulation efforts we saw in Libor benchmarks, I assume other benchmarks – many other benchmarks – are legit areas of inquiry,” CFTC Commissioner Bart Chilton said.
…
All of these stories collectively pointed to the same thing: These banks, which already possess enormous power just by virtue of their financial holdings – in the United States, the top six banks, many of them the same names you see on the Libor and ISDAfix panels, own assets equivalent to 60 percent of the nation’s GDP – are beginning to realize the awesome possibilities for increased profit and political might that would come with colluding instead of competing. Moreover, it’s increasingly clear that both the criminal justice system and the civil courts may be impotent to stop them, even when they do get caught working together to game the system.
If true, that would leave us living in an era of undisguised, real-world conspiracy, in which the prices of currencies, commodities like gold and silver, even interest rates and the value of money itself, can be and may already have been dictated from above. And those who are doing it can get away with it. Forget the Illuminati – this is the real thing, and it’s no secret. You can stare right at it, anytime you want.Read more: https://www.rollingstone.com/politics/news/everything-is-rigged-the-biggest-financial-scandal-yet-20130425#ixzz2SEih36ji
Follow us: @rollingstone on Twitter | RollingStone on Facebook
Which brings us back to values, and also how a ‘community’ can be very ‘resilient’, it just so happens that this community has proved very resilient at screwing everybody else over. When the value of everything is ‘made up’, where does true value lie? Welcome to the company store… :unsure:
L,
Sid.Hi folks,
Not that its anything new…
Summarizing The Known Rigged Markets
Submitted by Tyler Durden on 06/12/2013 09:35 -0400Following last night’s revelation that FX trading is the latest addition to the “rigged” column, here is a summary of the known market manipulation scandals (because it can be problematic keeping track of all by now):
Libor – interest rates (link)
ISDAfix – swaps (link)
Platts – oil prices (link)
WM/Reuters – FX (link)
High-Frequency Trading – equities (link)We also know that the Fed and world central banks are engaged in a full blown (and unprecedented) Treasury curve modeling exercise courtesy of both ZIRP (short-end) and QE (long-end), and that courtesy of some $12 trillion in extra liquidity in the past 5 years, stocks are at an artificial “wealth effect” sugar high.
We can therefore deduce that, following the process of elimination, gold and silver are the only markets that are unmanipulated and where transparent price discovery is allowed to take place without intervention from key players.
Sarcasm off.
So much for all those ‘gold bugs’ thinking there is even such a thing as a ‘free market’…
L,
Sid.Sid,
I think your link tends to reinforce the case for having something in metals. The First World is not the whole world – luckily. 🙂
Hi Nassim,
Yes but:
not only is the stimulus fungible but it means all global leverage is ‘shared’
:dry:
As for having something in metals, yes of course, but the way things are going I see the biggest thing in metals will be ‘tin foil hats’! 😆
L,
Sid.
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