This article establishes that the price of gold and silver in the futures markets in which cash is the predominant means of settlement is inconsistent with the conditions of supply and demand in the actual physical or current market where physical bullion is bought and sold as opposed to transactions in uncovered paper claims to bullion in the futures markets.
The supply of bullion in the futures markets is increased by printing uncovered contracts representing claims to gold. This artificial, indeed fraudulent, increase in the supply of paper bullion contracts drives down the price in the futures market despite high demand for bullion in the physical market and constrained supply. We will demonstrate with economic analysis and empirical evidence that the bear market in bullion is an artificial creation.
As most of now understand and except – at least anyone with two brain cells to rub together or anyone with the moral fortitude to admit the obvious – the gold and silver markets are almost continuously manipulated with a web of paper gold and silver that consists largely of Comex futures, LBMA forward, OTC derivatives and Central Bank/bullion bank custodial hypothecation agreements.
Dr. Paul Craig Roberts and I apply the law of supply and demand – the foundation of economics and capitalism – to the dislocation between the paper bullion and physical bullion markets in order to demonstrate that the only possible conclusion is that these markets are highly manipulated.
The manipulation of the gold price by injecting large quantities of freshly printed uncovered contracts into the Comex market is an empirical fact. The sudden debunking of gold in the financial press is circumstantial evidence that a full-scale attack on gold’s function as a systemic warning signal is underway.
You can read the full article here: Supply and Demand in the Gold and Silver Futures Markets.