Is the Federal Reserve losing control of the gold price?

For the majority of the last 20 years, the western Central Banks, under the direction of the BIS, have been able to use the precious metals derivatives markets to “manage” the price of gold.  As long as counterparties who are “synthetically” long gold and silver are willing to settle the derivatives trade in cash or ETF shares, gold derivatives can be created in infinite quantities and used to keep a lid on the price of gold.

But since late spring, it seems that the attempts to use the paper gold and silver markets on the Comex and LBMA to drive the price lower have been met with aggressive buying.  For now the only explanation is that a large buyer  (or maybe several) may be accumulating physical gold/silver, which is preventing the price managers from indiscriminately printing and flooding the market with paper derivative contracts to drive the price down.  The tail may no longer be wagging the dog.

My friend and colleague, Paul Craig Roberts wrote this commentary about the possibility that the physical gold market is taking away:

After years of being kept in the doldrums by orchestrated short selling described on this website by Roberts and Kranzler, gold has lately moved up sharply reaching $1,510 this morning. The gold price has continued to rise despite the continuing practice of dumping large volumes of naked contracts in the futures market. The gold price is driven down but quickly recovers and moves on up. I haven’t an explanation at this time for the new force that is more powerful than the short-selling that has been used to control the price of gold.

You can read the rest of PCR’s analysis here:  Is The Fed Losing Control Of Gold

10 thoughts on “Is the Federal Reserve losing control of the gold price?

  1. It is the reverse situation we saw in 2013.
    Like in 2013, big funds act accordingly to the federal reserve.
    In 2013 they sold etf and now they buy.
    This huge amount of physical demand was enough to cause big problems to big futures gold shorts. (swap short at record high as of today COT report)

  2. Maybe they loosing control but they not out and still very strong.
    I have to see them bankrupt and CEO’s going to prison for very long time first . I like Paul Craig Roberts articles, he is smart guy and he is real patriot.

  3. What Robert David Steele (former CIA agent) has to say in this Q& A interview is food for thought.
    At the 32:40 mark a question about the U.S. being on a gold backed currency.
    All I can say is we will find out.

      1. It is not a quantity but a price problem.

        If the M1 money supply is 40% covered by gold, a very light gold standard ( https://tradingeconomics.com/united-states/money-supply-m1 )
        M1 = 3,831.7 USD Billion , 40% -> 1,532.68 USD Billion
        United States have supposedly 8,133.5 Tons of Gold -> 261,492,025 ounces

        This gives 5,861.3 $ / ounce

        As of 8/6/2019 COT Report ( https://www.cftc.gov/dea/futures/other_lf.htm ) 8 largest traders have 44.7 % net short position of open interest.
        -> 44.7% of 600,317 contracts -> 268,341 contracts net shorts ( 100 ounces per contract)

        Price difference : 5,861.3 – 1,472.4 -> 4,388.9 USD
        Loss for the 8 largest gold traders = 268,341 * 100 * 4,388.9 = 117.78 USD Billion
        The loss for the 4 largest traders (29.6 % of open interest ) is USD 78 Billion

        M2 ( https://tradingeconomics.com/united-states/money-supply-m2 ) 100% backed by Gold gives 56,426.58 USD / ounce and the loss for the big banks will be USD 1.5 Trillion

        I think there would be some talks between big banks and the Treasury, to the least.
        Maybe Mr Steele need to explain how a soft, less violent gold standard implementation is done in United States.

  4. The gold price suppression goes beyond the Fed. It is part of the Matrix. “The Matrix is everywhere. It is all around us. Even now in this very room. You can see it when you look out of your window or when you turn on your television. You can feel it when you go to work. When you go to church. When you pay your taxes. It is the world that has been pulled over your eyes to blind you from the truth. – What truth? – That you are a slave, Neo.”

    More important is the reason why they lost control. It is the unpayable debt. We hear figures of $250 trillion globally. This is just the tip of an iceberg. Under water are hundreds of trillions of unrecorded liabilities. They can only be serviced by debasing the currency. Gold did not go up that much (so far). The dollar goes down. What drives the DXY is not dollar strength but EURO dumping. It appears that the ECB is sterilising enormous amounts of USD that have been printed in secret. Go to Greg Hunter and look for his interviews with professor Dr Mark Skidmore.

  5. Considering the significant hostilities ongoing between the United States and China (Russia too) with regards to currency and trade, it would not surprise me in the least if the large buyer or buyers, that you inferred to in your article, would be, however indirectly or directly, associated with either China or Russia, or both. Putting upward pressure on gold (and silver) would be a worthy counterbalance to U.S. economic sanctions, which are nothing more than the efforts of a bully throwing temper tantrums. Such an effort would be a very sneaky, smart and strategic way to hit the bully where it hurts the most. It would be a strategy worthy of the teachings of Sun Tsu: ‘How to win a war without firing a shot’.

  6. Adding fuel to the fire burning currencies to dust is an apparent solvency issue at US/global banks. It appears that some US banks have problems to borrow at reasonable rates due to solvency issues since the price of borrowing is always linked to the risk involved. JP Morgan analyst Nikolaos Panigirtzoglou talks about urgent liquidity needs of some US banks and concludes that the Fed will have to start QE soon: “excess reserves in the banking system shrank to precarious levels, and some needed to resort to the Fed funds market to meet their liquidity needs as reserves are not uniformly distributed across the banking system”. To me it is a coded way of admitting that some banks almost broke and have trouble borrowing. You can read the full article here:

    https://www.zerohedge.com/news/2019-08-10/jpmorgan-fed-will-need-restart-qe-soon

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