Precious metals markets manipulation: Watch out!

It gives the impression that both gold and silver could leave behind a now seven to eight-month consolidation phase from a technical point of view in the foreseeable future:

Silver has now been running sideways for quite a while in a range between thirty and 24 U.S. dollars per paper ounce, while the gold price may have formed its cycle low in the area of 1,675 U.S. dollars per paper ounce (in the form of a chart-technical double bottom).

Price manipulation in the precious metals markets – yesterday’s conspiracy
Despite all this, silver today is still trading at only half of its previous record price, which was marked in January 1980 – and then again in 2011. It gives the appearance that major bullion banks, with the support of the BIS and other central banks, seem to have been successful in keeping the silver price from shooting past thirty U.S. dollars per paper ounce to date.

The gold price was different, as it managed to form a new all-time high in the range of more than 2,000 U.S. dollars per paper ounce in August of last year, only to consolidate thereafter over the course of several months.

Egon von Greyerz is convinced that the current silver price has nothing whatsoever to do with the principle of supply and demand. If it were a matter of real – and not permanently manipulated – markets in the case of precious metals, the silver price in particular would in all probability already be quoted at completely different levels.

The following is a selection of links that support the fact of open price manipulation by large banks and influential traders in the markets for precious metals.

CNBC: Ex-JP Morgan Trader Pleads Guilty To Manipulating Metals Markets
NASDAQ: JPMorgan To Pay $920 Million In Fine For Manipulating Precious Metals
WSJ: Scotia Bank Fined $127 Million For Price Manipulation
DAILY MAIL: HSBC Is Being Probed Over Rigging Of Precious Metals Markets
SOTOS: Silver Price Manipulation Class Action

This media report list could be continued in significant ways. Viewed from the rear view mirror of the past, this merely proves another formerly officially labeled “conspiracy theory” to be real and true.

At some point the “day of knowledge” will come
Egon von Greyerz warns that both the operators of the LBMA and the Comex would have sold every ounce of silver physically available at these trading places about one thousand times each.

Despite the price manipulations on the paper gold and silver markets that have been officially exposed so far, there still seem to be countless unsuspecting buyers who are unaware that paper contracts on the paper gold and silver markets are not backed and collateralized by physical gold or silver. Increasingly, this is also true for platinum and palladium.

A bursting of the paper gold and silver bubble will therefore occur when more and more buyers wake up to the fact that contracts are no longer settled on the basis of U.S. dollars or rolled into the future, but instead physical delivery of precious metals is increasingly requested.

This point in time could be called the “day of realization.” Many players would experience that the silver vaults are empty. Already at the current time, reports are piling up that the supply situation on the physical silver markets is tight.

Physical market with price premiums
In some places, the price premiums on the physical silver markets amount to fifty to even 100 percent, which means that the spot prices do not reflect the selling prices on the physical markets in any way.

See, for example, Germany, where an ounce of silver officially trades at around 21 euros, but cannot currently be ordered from leading precious metals dealers for less than 26.50 euros (Canadian Maple Leaf or Australian Kangaroo). Nevertheless, buyers can be sure to hold physical – and thus real – silver (or gold) in their hands after ordering from precious metal dealers with excellent reputations.

Renowned commentators have also been warning potential investors against investing in gold and/or silver ETFs for some time now. This is because the risks associated with these vehicles are numerous, as von Greyerz is also convinced.

ETFs and the third party risk
After all, in the case of ETFs, we are dealing with collateral that is part of the (ailing) financial system. Thus, there are numerous third party risks associated with investing in ETFs, which is NOT so in the case of holding physical gold and/or silver.

Although investors may believe they have the right to physical delivery of gold and/or silver at any time, reading the prospectuses of leading gold ETFs such as SPDR at the latest presents a completely different picture. It is stated there that in some cases and times of need, a physical delivery of precious metals does not have to occur in principle.

Rather, the ETF operator reserves the right to settle unit certificates on a U.S. dollar basis – even against the express wishes of holders. Automatically, the question arises whether those gold and silver holdings held by ETFs are not, under certain circumstances, lent on or even borrowed by their operators.

Mint with delivery problems
Increasing problems also seem to be experienced by individual mints, such as the Australian Perth Mint, among others. According to recent reports, numerous investors who have a contractual claim on the Perth Mint for delivery of physical silver are often waiting up to four months or even longer for delivery.

Even silver orders that have already been paid in full are not said to be exempt from this. Last year, headlines were also made by the news that both JPMorgan and HSBC officially declared an end to their cooperation with the Perth Mint, after the Perth Mint was allegedly involved in gold purchases from illegal sources in Papua New Guinea, according to relevant reports.

An officially launched investigation by the LBMA had come to different conclusions late last summer, which is why the Perth Mint was cleared with an eye on its own reputation. To what extent this official LBMA investigation can be trusted is another matter.

The Perth Mint is owned by the local government of the state of Western Australia, so it should not normally be expected that the state mint would be involved in crooked dealings. Widespread supply bottlenecks, such as those currently being observed, are also proving to be rather unusual.

From Egon von Greyerz’s point of view, however, this is just one more reason why he would never store gold and silver in his personal property with a government institution and/or a bank in Australia, Canada, the USA or anywhere else in the world.

The Perth Mint had already found itself in a similar situation about ten years ago, when there were also delays in the delivery of gold and silver of up to six months at that time. So this is not the first time that the Perth Mint has kept its customers worldwide waiting for physical deliveries.

According to Egon von Greyerz, from an investor’s point of view, it is anything but easy to navigate through the thicket of problems in the precious metals markets. It all starts with the fact that bullion banks and their paper contracts cannot be trusted, which even applies to individual mints and/or precious metal dealers.

The problems associated with investing in gold and/or silver ETFs have already been discussed. No one can or should be truly certain that physical delivery of precious metals would occur at times when they would be most needed.

The problems associated with the futures markets – and thus paper gold contracts – have been adequately discussed, among other things, in the report entitled Biggest financial bubble ever probably to be seen in paper gold markets. For these very reasons, precious metals investors have no choice but to hold gold and other precious metals in a purely physical form and store them safely.

There is no way around physical holdings
It is important to keep in mind the aspect that physical precious metals should be kept outside the banking sector. The respective jurisdiction could also play a major role at some point, namely if precious metal holders in some parts of the world were to be expropriated by confiscation – as was the case in the USA in the 1930s.

From this point of view alone, it makes sense to have a denomination of at least three to four different storage locations in different parts of the world. Personal access must be available at all times.

In addition, the debates about inflation, hyperinflation, disinflation and deflation continue. At worst, the economy could stagnate with inflation picking up significantly (also known as stagflation).

Among ordinary people, this development would probably have the hardest impact because the general cost of living, including food prices in particular, would rise steeply. That very process now appears to be in an early phase, see HERE and HERE, among others.

At the same time, nearly twenty million Americans and American women still depend on financial assistance from their own government. Further, the U.S. unemployment rate officially reported by the BLS is not likely to prove very meaningful as the participation rate in the labor force continues to decline, meaning:

More and more citizens have given up looking for a job and are therefore not officially registered as unemployed.

Since all eyes are currently on cryptocurrencies such as Bitcoin, stocks, bonds & co., there is no question in von Greyerz’s mind that most investors will probably sleep through the currently excellent entry prices on the markets for precious metals.

After the formation of a double bottom in the area of 1,675 U.S. dollars per troy ounce, a lot of things point to a breakout of the gold price into higher areas, which is probably imminent.

Investors should never forget that the flip side of a gold or silver coin always shows the ugly face of a fiat currency collapse. For that very reason, preserving one’s wealth is one of the most important maxims, if not the most important, in times like the present.

History has shown over a period of 5,000 years what has happened to fiat and paper currencies that are unbacked and backed by nothing! Their intrinsic value has always sunk to zero, as once put in a nutshell by Voltaire.

DepthTrade Outlook

The aim of today’s reports was to take up individual developments on the precious metals markets in a little more detail and to point out once again which things are important with regard to investments in precious metals.

In summary, you should take away for yourself little to no trust in institutions in these markets, which seem to be completely eaten away by corruption. Instead, take care of your own investments.

Whether inflation/hyperinflation or deflation, the 1930s had shown that gold and precious metals in physical form offered good asset protection even in deflationary periods. As long as no gold and/or silver is mined on the moon and near earth asteroids, this should not change.

Ben Schaack Send an email

Mr. Schaack is a financial analyst, specializing in the commodity, foreign exchange, and crypto markets - with more than 10 years of experience. Besides his business analytics studies, Mr. Schaack works as a journalist - covering finance, economy, and geopolitics. His special interests are focused on inflation hedging and exponential (compound interest) growth. He posts and discusses relevant news on his Twitter account.


  1. Thank you very much for your contribution. In my opinion, it makes sense to look at this topic from all sides right now. A lot of things are crying out for the prices of physical precious metals to rise. Huge amounts of money being printed (electronically) without any increase in wealth being seen anywhere at the moment, rather the opposite. The lip service to climate protection, that goes along with silver consumption. Let’s see when the silver paper gamblers have to let their pants down.

  2. Otherwise, the reports of China and gold-backed currency make also tendency about just these changes with precious metals.
    Also Poland is to bunker gold and who knows who else.

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