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Gold's counterintuitive movement is an old story but it can't be told
11:54a ET Thursday, June 8, 2017
Dear Friend of GATA and Gold:
Dave Kranzler of Investment Research Dynamics reports that a huge amount of "paper" gold was dumped on the futures exchange in New York today, apparently in connection with the anticipated congressional testimony of former FBI Director James Comey:
http://investmentresearchdynamics.com/40-5-tonnes-of-paper-gold-dumped-i...
Kranzler writes: "One/some/several 'entities' decided at 9:38 this morning that it was necessary to dump 14,315 contracts of paper gold. This is just the August contract. In total a lot more was unloaded. This represents 1.43 million ounces of gold. The Comex is showing only 900,000 ounces of 'gold' as 'registered,' or available for delivery in June, July, and August (assuming all of that gold is actually sitting physically in the Comex vaults as reported). If we make that generous assumption, 531,000 ounces of paper gold were naked-shorted."
... Dispatch continues below ...
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The counterintuitive movement of the gold price long has been one of GATA's major points. It came to the attention of the Bank of Russia back in 2004, when the bank's deputy chairman, Oleg V. Mozhaiskov, cited it in remarks to the London Bullion Market Association meeting in Moscow.
Mozhaiskov said: "The statistical correlation between the market prices of dollar and gold is obvious. For the problem we discuss today it means specifically that gold, in addition to its unique physical and chemical properties used in industry, has retained its particular monetary attractiveness for cautious financial investors, and its market price is still heavily influenced by the state of the international monetary system.
"This dualism in gold price formation distinguishes it from other commodities and makes the movements in the price sometimes so enigmatic that market analysts need to invent fantastic intrigues to explain price dynamics. Many have heard of the group of economists who came together in the society known as the Gold Anti-Trust Action Committee and started a number of lawsuits against the U.S. government, accusing it of organizing an anti-gold conspiracy. They believe that with the assistance of a number of major financial institutions (they mention in particular the Bank for International Settlements, J.P. Morgan Chase, Citigroup, Deutsche Bank, and others), some senior officials have been manipulating the market since 1994. As a result, the price dropped below US$300 an ounce at a time when it should, if it had kept pace with inflation, have reached US$740-760.
"I prefer not to comment on this information but dare assume that the specific facts included in the lawsuits might have given ground to suspicion that the real forces acting on the gold market are far from those of classic textbooks that explain to students how prices are born in a free market."
Mozhaiskov's address is posted at GATA's internet site here:
GATA often has quoted the incisive remark of South African gold advocate Peter George on the eve of GATA's conference in Dawson City, Yukon, in August 2005, a remark captured at the 35-second mark in the first video frame at GATA's Internet site here:
George said: "In the last 10 years the central banks have effectively shown that when there is a real crisis, gold actually goes down. And it's so blatant, it's a joke."
Your secretary/treasurer has put it more sardonically, as in a dispatch in 2012:
http://www.gata.org/node/11426
"If the Northern Hemisphere was destroyed in a nuclear war, the Federal Reserve, JPMorganChase, and HSBC would get some brokers to Sydney, Rio de Janeiro, and Johannesburg to sell gold futures massively and drive the price down by at least 5 percent. Kitco market analyst Jon Nadler would crawl out from the rubble and opine to the cockroaches that the gold price had fallen because so many gold buyers had been killed, as he always had predicted would happen. CPM Group's Jeff Christian would telephone New Zealand not to worry because he was flying down with reams of gold-colored paper that would work just as well in Wellington as it did in New York as long as nobody asked what was behind it. And the World Gold Council would console itself with whatever high-fashion models could be found wearing nose rings in French Polynesia."
Mainstream financial news organizations know all about this but are not likely to find it curious while JPMorganChase, HSBC, and other bullion and investment banks remain among their largest advertisers and while their organizations are owned by large multi-media corporations heavily regulated by governments. For as Upton Sinclair observed in 1934 as he tried to break through the media oligopoly of his time in his campaign for governor of California, "It is difficult to get a man to understand something when his salary depends upon his not understanding it."
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
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