GLD Is Being Looted To Help Banks Manipulate The Price Of Gold

The choke hold put on the precious metals the past several days has been relentless, Eric. It was so forceful, it might even have been unprecedented…the selling is being driven by the paper-gold market and the central planners no doubt have had a hand in it. The paper-gold they sell needs to be matched from day to day with a show of force, and the only way to do that is being able to deliver physical metal when the buyer of your paper promise asks for physical metal rather than cash settlement. – James Turk on King World News

The price of gold pushed through its 200 dma and hit a high of $1191 on October 15.  It appeared ready to assault $1200 (click to enlarge):


But over the next 17 trading days 36 tonnes of gold was removed from the GLD Trust. Most of the gold – 29 tonnes – was removed in the last 9 trading days to facilitate manipulating the price back below 200 day moving average (red line in the graph above).

There’s unquestionably something wrong behind the “curtain.”  With the increasing meltdown in various areas of the global financial system (energy, commodities, high yield debt, leveraged loan portfolios, biotech stock, Glencore/Lonmin, emerging market currencies, etc) the OTC derivatives market must be littered with train wrecks.

At a time when the price of gold should be soaring to reflect the increasing financial, economic and political turmoil brewing, the western Central Banks/banks are relentlessly manipulating the price.  Without a doubt they have had to resort to raiding GLD in order to make the deliveries referenced at the top by James Turk.

Now we have to endure another round of the “we’re going to raise rates this time, we promise” game.  How many times can the Fed get away with hammering Wall Street’s calcified brain trust and the financial media over the head with this farce?

With the level of systemic debt in the U.S. (Federal, State, corporate, individual and pension debt in the form of underfunding) going parabolic, economic activity quickly fading, financial landmines going off behind the scenes and geopolitical risk escalating, the only way the Fed can maintain any level of credibility is to prevent the price of gold from engaging in bona fide, market-determined price discovery.

At some point the Central Banks will lose their ability to contain the price of gold.  We’re already starting to sense their level desperation in this endeavor as reflected in the paper gold to deliverable ratio on the Comex, the gold being drained from the Fed’s vaults and the removal of gold from GLD.

23 thoughts on “GLD Is Being Looted To Help Banks Manipulate The Price Of Gold

  1. Solid post Dave, Was reading thru Harvey’s daily epistle last evening and was shocked when I went thru the GLD nums. Was actually glad to see them as it shows as your point the bottom of the barrel scrapeing is getting serious, very serious indeed.

    The downside to all this desperation seems to be the saber rattling and missile launches we are seeing. The domestic racial tensions and the absolute falsification of all government data….Ho-Re Shat….Dollar index ticking up knocking on 100. This is getting to bizarre for words but your thoughts always appreciated.

  2. Thank you for this fantastic piece Dave. I’ve always found GLD to be very shady.
    Just read the part in GLD’s prospectus where the custodian subcontracts to subcustodians but has no right to audit or visit the subcustodians’ vaults. It then requires third-party audits. So we can have the custodian own or pay off the third-party auditor to give a clean audit, while knowing that the subcustodian leases out the gold into the market.

    If GLD shareholders suspect so and ask custodian to prove otherwise, custodian can simply say “we have no right to check the subcustodians, see the prospectus, but here is a clean audit result” however laughably compromised. If GLD goes bust, no holder of GLD has any claim to any gold. GLD holders simply become unsecured creditors along with all other creditors, with no precedence in bankruptcy court.

    1. At that point, I suspect there would be a sympathetic fleeing of investors from all manner of commodity ETFs, and probably some non-commodity offerings as well.

  3. Sounds about right. Paper gold GLD claims to be fully backed by physical gold bullion but yet it refuses to give retail investors the right to redeem for any of these ‘claimed’ gold bullion. This fact alone would mean GLD shares are nothing more than paper at the end of the day. Furthermore, GLD’s prospectus is chalk full of weasel clauses and legal loopholes that allows the fund to get away without the full physical gold backing. One good example of this is the clause that states GLD has no right to audit subcustodial gold holdings. To this day, I have not heard of a single good reason for the existence of this audit loophole. I’ve also verified the following to be true and welcome everyone else to do so:

    “Did anyone try calling the GLD hotline at (866) 320 4053 in search of numerical details on GLD’s insurance? The prospectus vaguely states “The Custodian maintains insurance with regard to its business on such terms and conditions as it considers appropriate which does not cover the full amount of gold held in custody.” When I asked about how much of the gold was insured, the representative proceeded act as if he didn’t know and said they were just the “marketing agent” for GLD. What kind of marketing agent would not know such basic information about a product they are marketing? It seems like they are deliberately hiding information from investors.

    I remember there was a well documented visit by CNBC’s Bob Pisani to GLD’s gold vault. This visit was organized by GLD’s management to prove the existence of GLD’s gold but the gold bar held up by Mr. Pisani had the serial number ZJ6752 which did not appear on the most recent bar list at that time. It was later discovered that this “GLD” bar was actually owned by ETF Securities.”

  4. Still utterly confused by gold’s historical pricing. E.g., In 2000 it was trading for less than (not quite half) what it was in the mid-1930s. But looking at an inflation calculator ( I see the 2000 dollar is worth < 1/20th the 1930s dollar. This has to make gold one of the the worst investments of all time? Granted, the market manipulation is obvious, even to novices like me, but would seem insufficient to account for such huge long-term disparity.

  5. OMG! It’s 10:42. I was just looking at the price of gold and my instantaneous thought was: “If they manipulate the gold price this obviously something must be seriously wrong. There is no gold anymore in the West.”

    I’m in the same camp now of people saying: if you deny gold price manipulation it should be legally allowed to tattoo the word “idiot” on your forehead!

  6. The lunatics are in charge of the asylum. There was a time not so long ago
    these antics would send my blood pressure soaring but now I just chuckle
    because I know the criminals responsible for creating this mess spend many
    sleepless nights self medicating as they struggle mightily to hang onto power.
    They all are going down and they’re too stupid and delusional to realize it.
    Payback is a bitch isn’t it grandma yellen.

  7. As you point out, it is truly beyond incredulous with world markets existing on the toxic fumes of leveraged debt and the absurd ratio levels of paper securities to rock hard reality, and as sovereign currencies are being printed faster than US and Nato pugnacious policies create refugees, while government stats resemble GOP candidates preposterous lies – that precious metals are looking a lot like dirty Chinese coal in the minds of many. If for any reason there comes a need to keep this comical charade going with some more precious metals for collateral – then the criminally powerful will just find another country, like Venezuela or Libya, to loot it’s gold.

  8. How long until we hit 400-to-1 leverage for COMEX Gold? …. my guess is less than 60 days…. then it’ll be onto 500-to-1.

  9. Mr Penthouse’s comment, very funny but I have noticed a lot more trolling these metal blogs’ by very, very deceitful people. The reason the charade continues’ is people still supply the market using borrowed money.

  10. GLD @ 666 mt. ROFLMAO. Might be some sort of smoke signal? SnP 666 comes to mind. These jokers DO have some devilish sense of humour after all…

  11. If a couple of dozen South American, African nations’ decided to stop supplying western markets’ and using the metal as money themselves, the wealth leaving the west would be instant. After 300 years you think they would have worked out the scam, apparently not.

    1. I think they’ve worked out what happens to leaders that don’t follow Washington’s demands (think Iraq, Syria, Iran previously) and decided to play it safe.

      This is why Russia standing up to the US and apparently winning could strike a major blow to the dollar.

  12. Hahahahaha!!!!!

    GLD reporting 666 tons! Very appropriate, could be intentional, not a coincidence. Maybe it should stay at that number. I actually find it very funny, although internally very angry. I don’t know if I should laugh or scream in rage, but am laughing.

    This period will be remembered years from now, as to how such things were allowed by a so-called “civilized” society.

  13. Just look at this even the Russians are predicting a force majeure.

    “Prudent planners cover all potential contingencies,” he told USA Today. “That said, conflict with Russia is not something the US or Russia wants to see occur.”

    Yet, “provocation” was the precise label given to Russia’s similar decision to move missile systems into Syria. The Kremlin stressed that this was a precautionary measure, considering any worst-case-scenario.

    “We have taken into account all possible threats. We have sent not only fighters, attack aircraft, bombers, and helicopters, but also missile defense systems because any sort of force majeure situation may occur,” Russian Aerospace Forces Commander Viktor Bondarev said last week.

    Read more:

  14. This just in. Martians now claim to have gold in their space ships. Wow.

    Prices are definitely being manipulated by Martians.

    Beep. Beep.

  15. After listening to republican debate last night they are all with exception of Rand Paul on the neocon side. They all talk about making US economically great again but also talk about the need to stop China and Russian “aggression”. If the dollar plunged against other fiat and gold the US military would be unable to finance itself as it would find the dollars flooding back into marketplace. Both parties in US are being controlled by neocons desperate to keep dollar strong and seem willing to sell every ounce of gold in NY and Fort Knox to do it.
    Does anyone have any idea how much gold still exists in GLD, US mints, and FRBNY? It seems like it is to US advantage to start a war before the world figures out it is out of gold. So isn’t China walking a tightrope by trying to skim what little gold is left in west before they come clean on their true PBOC reserves?

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