Tags: gold | price | manipulated

Can Gold Prices Be Manipulated?

By    |   Monday, 25 June 2018 10:09 AM

Is there a manipulation of prices on the gold market? Some proponents of the idea say gold prices might be manipulated by traders who try to influence the market and cause short-term changes in asset prices, or it could be a way for financial institutions to deceive investors by artificially affecting the market.

Some investors believe gold prices are influenced by central bankers or big banks that cause an increase in trading to lower prices. However, research has suggested there is no evidence of suppression in gold prices, according to Sunshine Profits.

A long-term look at gold prices over the years shows there is no permanent trend in declines of prices and that the pattern has a cyclical nature. Although there are charges of manipulation in the gold market, they seem to appear when there is a downward trend but not when gold prices are skyrocketing.

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Gold market prices are similar to other asset categories in having bull and bear markets, Sunshine Profits maintained.

However, there are observers who disagree. Central banks may have an effect on gold prices just as they do in other financial markets, Ronan Manly of Singapore’s BullionStar told RT.com. These institutions are believed to store large quantities of gold in order to affect the market as a form of financial insurance.

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Loans and swaps occur in the gold lending market between central banks and bullion banks with the transfer of physical gold holdings, causing an increase in the supply of gold on the market and decreasing gold prices. Public announcements by central banks selling large quantities of gold have a negative impact on the price, although the details of the sales are kept secret, according to Manly.

Whether caused by investors trying to bring short-term changes to price or big banks, manipulation harms the gold market for everyone, the Birch Gold Group pointed out.

The average trader could make bad moves in investing decisions because of artificial fluctuations in gold prices, and manipulation makes it difficult to know the true value of gold.

There have been cases in the past where banks and traders have been sued successfully or fined for attempts at manipulating the market. Gold and other precious metals see their true value and potential in a free market if regulators can keep manipulation under control or end it, the Birch Gold Group added.

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Is there a manipulation of prices on the gold market?
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Monday, 25 June 2018 10:09 AM
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