Fed ‘Doing Everything It Can’ To Suppress Gold Price

(H/T WND)

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From Gold Anti-Trust Action Committee:

Gold price suppression explained by Reagan Treasury official

Gold price suppression by Western central banks figures heavily in a recent interview with former Assistant U.S. Treasury Secretary Paul Craig Roberts by Geoff Rutherford of Sprott Money News.

Gold price suppression is undertaken through naked shorting of the metal by bullion banks upon the encouragement of the Federal Reserve, Roberts says. He adds that it probably will continue until “the Shanghai Gold Exchange in which no naked shorts are possible, produces different prices, different behavior, or until the West is so depleted of gold that the risk of selling all those naked shorts that can’t be covered becomes too high.”

Video and a transcript of the interview are posted at the Sprott Money News site.

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From King World News:

Gold, silver price suppression is ‘mission critical’ for Fed

Mining entrepreneur Keith Barron tells King World News suppression of monetary metals prices has been “mission critical” for the Federal Reserve, which has been “doing everything it can to halt true price discovery” in those markets. Barron also warns that the Ebola virus, which has appeared in the United States, has the potential to collapse commerce. An excerpt from the interview is posted at the KWN blog here.

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From TheAustralian.com:

Shanghai gold surprise in store

By Robin Bromby, The Australian, Sydney

If you want to know what China will do in the future, it’s usually a good thing to look at its past.

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Gold Investors Weekly Review – September 19th

In his weekly market review, Frank Holmes of the USFunds.com nicely summarizes for gold investors this week’s strengths, weaknesses, opportunities and threats in the gold market. Gold closed the week at $1,216.98 down $12.76 per ounce (-1.04%). Gold stocks, as measured by the NYSE Arca Gold Miners Index, fell 5.44%. The U.S. Trade-Weighted Dollar Index rose 0.63% for the week.

Gold Market Strengths

China officially opened the Shanghai Free Gold Exchange on Thursday. By giving foreign investors direct access to its gold market for the first time, China is seeking to obtain more influence over prices while simultaneously boosting the global use of its currency, the yuan. In addition to the deregulation of the gold market in Shanghai, Hong Kong’s Chinese Gold and Silver Exchange Society was given permission to set up a precious metals vault in Shenzhen this week. The continued deregulation of the gold market by the world’s largest consumer is a huge boost to the precious metal.

In the first eight months of this year, Shanghai imported $15.98 billion of gold, a staggering indicator of demand in China. Furthermore, last Thursday, two tonnes of gold was imported into Shanghai, indicating that gold imports into the city are not slowing down.

China is planning on boosting its gold reserves. The country’s reserves, a mere 1.1 percent of total reserves, have plenty of room to grow if when compared to nations such as the United States and Germany, which hold roughly 70 percent of their reserves as gold. The increase in gold demand from Chinese central bank purchases should place upward pressure on gold prices.

Gold Market Weaknesses

Despite historically being the best month for gold, September has shown nothing but declining gold prices. The typical increase in demand from India due to the festival season appears to be overshadowed by the extraordinary strength of the U.S. dollar and its negative effect on gold prices.

Gold traders have become the most bearish in three months, according to a survey from Bloomberg. The poor market sentiment is the result of the Federal Reserve lifting its median estimate for the Federal Funds rate by the end of 2015.

The ratio between gold prices and global equities, as measured by the MSCI ACWI, has declined to its lowest level since September 2008. The low point is due to the unusual headwinds for gold as of late and the continued strength of equities. It will be interesting to see if the strength in equities continues in the near future.

Gold Market Opportunities

Despite overall market sentiment favoring equities, George Soros has decided to bet on gold. Soros increased his bearish position in equities by 605 percent last quarter. The world famous investor did double down his position on gold mining ETFs, while also adding many gold companies.

Gold

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Gold Price Recuperating: Bull Market Restarting 2015

In its latest update to its 2014 Gold Survey, Thomson Reuters GFMS sees gold as entering a period of recuperation, but holds out little hope for any short term price appreciation, with physical demand falling sharply in the first half of the year compared with a year ago.  It sees last year’s substantial price falls as highly anomalous and talks of the market regaining its composure.  However the report will have been written ahead of the recent gold price collapse, down to a nine-month low yesterday following some heavy sales on COMEX after the release of the latest statement from the FOMC. (Although, given that it kept its ‘not for a considerable time’ wording for the likelihood of interest rate increases, and no other surprises on tapering, this might actually have been seen as gold positive.) Indeed we foreshadowed this reaction on Mineweb as a follow-on from a pattern seen in previous FOMC statement gold price reactions whether they were generally seen as gold positive or no.

GFMS reckons the Asian markets over-bought gold during the 2013 price falls and this has affected purchases which otherwise might have been made this year. And there is also a suggestion that overbought gold may have meant inventories had been built up to a level more than sufficient to meet demand atb the time and that these have been gradually run down following the Chinese New Year. Thus we have seen quite a sharp demand downturn from China in particular, although this may well not have been quite as steep as some commentators have suggested. Indeed both Indian and Chinese demand appear to have been picking up again towards the end of the third quarter

Gold Prices 2015

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