Dear Friend of GATA and Gold:
Ross Norman, CEO of London bullion dealer Sharps Pixley, yesterday disputed the 2013 study by a professor at the University of Western Australia that concluded that prices in the twice-daily London gold fixings were manipulated, a study publicized this week by the Sydney-based newspaper The Australian:
Norman wrote that the study had not discovered market manipulation at all but only that gold trading volume in London increases around the fixings because of the greater liquidity at those times:
Norman concluded: “It is no surprise that U.S. courts have seized upon the academic report, prompting a flurry of lawsuits to be filed in what is clearly looking like a pre-ordained desire for a guilty verdict in search of evidence to support it.”
Not having seen the study, GATA has no position on it, but Norman’s disparagement of the lawsuits brought against the bullion banks in the London fixes is weak. For of course the plaintiffs would not have sued if they lacked a “pre-ordained desire for a guilty verdict.” Further, every lawsuit in the United States is brought “in search of evidence to support it.” That’s what the discovery and deposition processes in lawsuits are about.
Norman’s response is also weak because according to a filing in one of the lawsuits Deutsche Bank has confessed to manipulating the gold market with other banks and has agreed to supply evidence against them:
More details are needed in this regard but Deutsche Bank has a big publicity department —
— and thus has had every opportunity to dispute the filing but does not seem to have done so.
But Norman’s response is weakest because he surely knows that the biggest complaints about manipulation of the gold market long have been directed against governments and central banks, which have intimate relationships with the London bullion banks.
How clarifying it might be if Norman, other bullion bankers, and all those who dispute or at least resent complaints of gold market manipulation could answer a few simple questions:
1) Are governments and central banks surreptitiously involved in the gold market, directly or through intermediaries, or not?
2) If governments and central banks are surreptitiously involved in the gold market, is it just for fun — to see whose trading desk can outperform the others — or is it for the traditional policy objectives of government intervention, to protect government currencies and bonds and national stock markets against adverse developments in free markets?
3) Is government subversion of free markets in the public interest? Even if governments should intervene in markets, should that intervention be open and accountable instead of deceptive, or would open and accountable intervention quickly lose effectiveness?
4) Are there any forgeries among the documents of this surreptitious intervention that are compiled here?:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.