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Peter Grandich comes over to our side as the manipulation gets too obvious
Europe banks not suppressing gold prices -- traders
From Reuters
Thursday, July 7, 2005
http://today.reuters.com/news/newsArticleSearch.aspx?
storyID=232253+07-Jul-2005+RTRS&srch=Gold+Anti-Trust+Action
NEW YORK -- Traders and analysts on Thursday dismissed a gold group's
claim that European central banks suppressed gold prices on moves
above $440 an ounce, saying instead the market routinely sees selling
above that level as it is at the top of a recent trading range.
According to a statement by the Gold Anti-Trust Action Committee on
Thursday, the precious metal has been capped at $440 since last
December by repeated selling of gold reserves by European central
banks as well as the ECB itself.
The ECB last week sold 360 million euros in gold, or 31 tonnes, at
the bank's new book value for the metal, said GATA, citing research
by gold analyst John Brimelow of Aegis Capital in New York.
This amount was matched only by the sale of 47 tonnes at the end of
March and a 31.9-tonne sale last December, GATA quoted Brimelow as
saying.
"An indisputable pattern has now developed for the ECB to step
forward as a massive seller when gold approaches the $440s," Brimelow
said.
But some market-watchers disputed the idea of a concerted effort by
European central banks to keep gold prices below $440. They said
rallies above that mark this year were failing mainly due to the
presence of major technical resistance.
"I don't think you can really point to that as something that's
suppressing the marketplace," Paul McLeod, vice president of precious
metals at Commerzbank in New York, said, referring to central bank
sales.
"They are operating within their quotas and the market very much
knows their volume allotment over the course of a year."
McLeod added: "If you're holding a commodity that's naturally
volatile and you're seeing prices up there, you're in the top part of
a range and you probably want to sell more there than you do at $420."
A trader at a precious metals refiner said profit taking by
investment funds has tended to cap rallies above $440 to $445 this
year.
"The (fund) long positions just get too big when we get to this level
and there's just no buying left," the trader said. "The buying
happens if you get closer to $420."
Spot gold was quoted at $423.15/3.90 on Thursday afternoon, after an
earlier safe-haven rally on news of four deadly explosions across
London's transport network.
Gold in 2005 has been unable to regain the 16-year peak above $455 an
ounce reached last December as the U.S. dollar was stuck in a three-
year-old decline.
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