Gold Futures Manipulation

Bullion Vault

Who pushes the Gold Futures market around…?

A CERTAIN NUMBER of market observers have long believed that the Gold Futures market is actively manipulated downwards by a cabal of US banks, writes Brad Zigler at Hard Assets Investor.

Their contentions have been based upon data published by the Commodity Futures Trading Commission (CFTC) showing a small number of domestic financial institutions holding lopsided short exposure. This has been taken as prima facie evidence of the banks’ attempt to cap the metal’s price.

We’ve looked into this issue more than once at Hard Assets Investor, but despite gold’s climb to record nominal price highs, the notion of bank manipulation hasn’t yet died. One reader retorts:

“The record short positions held by the relatively few players of the bullion banks is key, in their effort to cap the price of gold and keep the price from breaking out. They are having a difficult time of it because of the Chinese position of buying any dips.” 

“Keep the price from breaking out”? But, it did break out! Was it because the Chinese were buyers? Not unless they were trading in US Gold Futures.

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