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June 23, 2020 | Will Gold and Silver Ever Break Free From Official Price Suppression?
Don Swenson
After watching the prices of gold and silver for over 12 years (daily), I can say with confidence that these prices are not reflective of a free market. Both AU and AG are price manipulated daily so as to suppress any real spike in these prices. Investors know that if AU and AG spike upward for a long period (say a couple of months) then this means that our fiat dollar is being rejected. Our official authorities desire to prevent this outcome from happening.
As I write the price of gold is: $1763.50 and the price of silver is: $17.77. These prices should be multiples of these numbers IMO. The silver/gold ratio is now nearly 100 to 1. Is this reflective of real demand in our marketplace? I don’t think so. This is reflective of price suppression by our official authorities (the Plunge Protection Team).
The history of gold and silver has been to serve as a thermometer for the validity (demand) of our official fiat dollar. When investors sense that our dollar is losing ‘value’ and losing ‘credibility’ in the global marketplace, then they desire the ultimate foundation for all monetary value (gold). This has been our history since our founding.
Gold has been the ultimate foundation for our monetary system since our system started back in 1792. When our economy is managed poorly, investors will choose gold as their safe haven. But today, this safe haven is price manipulated by trading algorithms daily. Our official authorities can use the electronic futures markets to sell gold (short) so as to suppress its price in real-time. This happens daily.
Selling short (via futures contracts) is the primary tool for suppressing the prices of these precious metals. I have watched the ‘slamming’ of the gold/silver prices in real-time for years. It’s usually done on a couple of electronic exchanges in either New York and/or London. You can watch a typical ‘slam’ in real-time on the Kitco website: http://www.kitco.com. You can also download a gold app which shows real-time prices.
Why do so few seem to complain about this price suppression? My sense is that our investors do not want to challenge our official authorities…who give the order to slam (suppress) these prices. This organization call GATA (which I have followed for years), has followed the official price suppression for years. But GATA is not fully supported by most traders and investors (especially the miners who suffer the most from price suppression). But you can follow the logic of GATA here if you like: http://www.gata.org.
Most investors like to ASSUME that our official authorities desire free markets for price discovery. But I have noticed that this is not a valid view when price suppression is so obvious. There is now a growing body of pundits who view our authorities as desiring a suppression of certain commodities. Gold and silver are two commodities which are price controlled by our authorities and many now recognize this reality. I call the culprit the Plunge Protection Team.
Will gold/silver ever be set free to reach its market price? My sense is that this will not happen as long as options exist for price suppression. Selling short on a futures market is so easy as there is no delivery of these metals when a contract is settled. This allows traders to sell short and settle in our fiat dollar (no settlement in the metal). Buying these futures contracts and settling in digital cash allows price suppression to continue (indefinitely).
At some point we could witness a run on physical gold and physical silver by foreigners and international investors. If this happens in a major way, then we could witness prices going up even as suppression continues. My sense is that this will happen at some point down the road. Our system is so unstable and many now recognize this reality. In the meantime, expect more PRICE SUPPRESSION from our official authorities (daily). I wish it were not so! I am: https://kingdomecon.wordpress.com.
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Don Swenson June 23rd, 2020
Posted In: Kingdom Economics