There have been so many questions whether or not price manipulation of gold is real or is it just another myth. In this context, manipulation is considered as the intentional control of prices of gold.
There’s a portion of gold investors who believe that the prices of gold are manipulated systematically.
Oftentimes, on a downward direction.
The Cost of Gold and How it is Determined
There are variations to this theory. But the general belief is, precious metals similar to silver and gold are under the thumb of large banks such as central banks. These enterprises are using HFT or High-Frequency Trading and at the same time, derivatives or otherwise known as naked shorts in tamping down the prices.
How Two Traders Proved that Gold Price can be Manipulated?
Dave Kranzle as well as Paul Craig Roberts who are both founders of the Golden Returns Capital LLC have provided promising evidence of the manipulation of gold prices by collusion of various large banks and Fed. Both traders claimed that New York Comex exchange is the primary location of manipulation activities of Feds. Most notable players in Comex are JP Morgan, HSBC and the Bank Nova Scotia. All of which, jointly account for big percentage of the trading volume.
Selling naked shorts indicates that the Fed has short-sell gold. This is without borrowing it or ensuring that gold could be borrowed as-is following the normal short-selling practice. Rather, the Fed is doing this presumably to protect safeguard dollar and let banks repurchase gold at a lower price.