2014 – Gold Second Best Currency, Manipulation Theories OUT; Facts IN
by Mark O’Byrne, Gold Core REVIEW of 2014 Happy New Year ! We would like to take this opportunity to wish all our clients and our growing community of subscribers a peaceful, prosperous and healthy 2015. At the end of each year, it is important to take stock and review how various assets have performed and what has transpired in the year gone past, as it will give indications as to how assets will perform in the coming year and, more importantly, years. Gold Second Best Currency In 2014 – Higher In All Currencies Except Dollar Gold was the second best performing currency in 2014, with only the U.S. dollar stronger. –
Regulatory Authorities Confirm Gold and Silver Rigging
2014 may go down as the year when gold and silver conspiracy “theories” became conspiracy “facts” as banks globally were found to have conspired to rig the prices of gold, silver, currency and many other markets. UK regulators found that Barclays had manipulated gold prices . The UK’s Financial Conduct Authority fined the British bank £26 million in May. Further proof of manipulation of gold and silver prices also came in November when Switzerland’s financial regulator (FINMA) found “serious misconduct” and a “clear attempt to manipulate precious metals benchmarks” by UBS employees in precious metals trading, particularly with silver. UBS settled allegations of misconduct at its gold and silver trading business in November, alongside a planned agreement between UK and US authorities and seven banks over accusations of foreign exchange market rigging. Last week came news that Britain will widen the scope of laws which make the manipulation of market benchmarks a criminal offence. The changes will now include seven more rates covering the currency, gold, oil and silver markets, the government said last week. Peculiar, single trade or handful of trades leading to sudden gold and silver price falls continued in 2014 and contributed to gold and silver’s weakness. Price falls were often seen at times when markets were less liquid. As ever, price falls were driven from the futures market in electronic and increasingly computer driven trading – despite no reports of any major liquidations of physical metal. Indeed, they often came at times of strong global physical demand.
Banks continue to get mere slaps on the wrists for breaking the law. Very few traders or bankers have faced prosecution or jail time. Instead, regulators levy ineffectual fines that are tiny when compared to their annual bonuses and indeed profits. As long as this continues, we will continue to see criminal behaviour and banks attempting to manipulate and rig markets at the expense of investors and other financial market participants. Such behaviour is creating huge distortions in markets and will likely contribute to another financial crash and crisis. However, it also creates opportunities as certain markets not favoured by banks and central banks are artificially held lower, thus allowing canny investors to pick up assets on the cheap. Gold is some 37% below the nominal high in 2011 and silver some 70% below its nominal high in 2011. –
Another Year Of Paper Selling While Physical Demand Robust – Especially From China and India
Demand from China and India is set to be some 3,000 metric tonnes this year – more than the entire annual global production of gold. India is set for demand of some 1,000 tonnes and China over 2,000 metric tonnes as measured by the benchmark Shanghai Gold Exchange (SGE) withdrawals – which is likely the single most important benchmark of global gold demand today. Continue Reading>>>