December 5, 2022

Did Central Bank Coordinated Easing Also Include Manipulation of The Gold Market?

On a day when coordinated central bank monetary easing sent stocks and commodities soaring into orbit, the price action in the gold market was curiously muted.

The Dow Jones, S&P 500 and Nasdaq all increased by over 4%.  Gains in various S&P sectors ranged from 4.75% for the transportation sector to 7.51% for the financial sector.  Gold, by contrast, rose a mere 2%.

INDEX PERCENTAGE INCREASE
DOW 4.24%
S&P 500 4.33%
NASDAQ 4.17%
S&P 500 DIV FINANCIAL IX 7.51%
S&P 500 AUTO & COMP IDX 6.99%
S&P 500 BANKS INDEX 6.92%
S&P 500 MATERIALS INDEX 5.91%
S&P 500 INSURANCE INDEX 5.60%
S&P 500 SEMI & SEMI EQP 5.62%
S&P 500 ENERGY INDEX 5.49%
S&P 500 CAPITAL GDS IDX 5.32%
S&P 500 REAL ESTATE INDX 5.17%
S&P 500 TRANSPTN INDEX 4.75%
GOLD – CLOSING NEW YORK PRICE 1.98%

The massive monetary easing by central banks should have sent the price of gold into the stratosphere.  It has become crystal clear that central banks will continue to create whatever amount of money is necessary to prop up a collapsing, debt saturated system.

Why would central banks collude to restrain the price of gold?  GATA has explored this question in depth and in a recent exchange between Lawrence Williams of Mineweb and GATA, Williams writes  “If one assumes that governments as a matter of course manipulate currency exchange rates, then there is logic in their manipulating the gold price too, as many throughout the world consider gold as money (currency) and a rise in the gold price thus equates to a depreciation in currencies — notably the U.S. dollar.”

Most of the world already suspects that the “emperor has no clothes” when it comes to central bank money creation.  Had the value of gold been allowed to soar hundreds of dollars per ounce today, under free market conditions, the entire crumbling edifice of fiat currencies would have been exposed.

Gold is the only currency that central banks cannot destroy.  If central banks did not suppress the price of gold, the true extent of the debasement of paper  currencies would become blatantly obvious and thereby threaten the entire system of fiat currencies.  Central banks have every motive in the world to suppress the price of gold.  How long they can remain successful at it (as they engage in blatant, massive and world wide money printing) is the question on most gold investors’ minds.

More on this topic:

Where In The World Is The Gold?