Academic study admits possibility of gold market rigging but can't confirm it

12:46a ET Monday, September 23, 2013

Dear Friend of GATA and Gold:

What may be the first academic study of the question of gold market manipulation was published this month by Dirk G. Baur, associate professor of finance at the University of Technology in Sydney, Australia (http://cfsites1.uts.edu.au/business/staff/finance/details.cfm?StaffId=9717). While he writes that he was unable to validate any statistical evidence of manipulation, such as has been presented by GATA's late board member Adrian Douglas, GATA consultant Dimitri Speck, and market analyst Chris Martenson, among others, Baur acknowledges that central banks have a powerful interest in controlling the gold price, that suspicion is raised by the secrecy around central bank gold leasing, that bullion banks involved in both the daily gold price fixing in London and the gold carry trade would have a conflict of interest, and that these issues "may be the basis for future research."

Unfortunately Professor Baur's study does not seem to take note of, among so many other things in GATA's documentation file --

http://www.gata.org/taxonomy/term/21

-- the secret March 1999 report of the International Monetary Fund confirming that central banks conceal their gold swaps and leases to facilitate their surreptitious intervention in the currency markets --

http://www.gata.org/node/12016

-- nor the comprehensive but secret involvement in the gold market of the Bank for International Settlements, the central bank of the central banks, and the actual advertising done by the BIS of its gold market manipulation services --

http://www.gata.org/node/12717

http://www.gata.org/node/11012

-- nor the admission by a BIS official in 2005 that a primary purpose of central bank cooperation is to control the gold price:

http://www.gata.org/node/4279

Professor Baur seems to be saying only that he could not document any of this statistically from market data. But his acknowledgment of motive and opportunity for gold market manipulation may be welcome enough.

Professor Baur's study is 21 pages long and is posted at the Internet site of the Social Science Research Network here:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2326606

And at GATA's Internet site here:

http://www.gata.org/files/GoldManipulationStudy-DirkGBaur.pdf

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.