|
Deutsche Bank has agreed to pay a fine to end a lawsuit from a group of
investors accusing it, along with other banks, of manipulating precious
metals prices.
https://www.goldbroker.com/news/deutsche-bank...ther-banks-941
https://www.goldbroker.com/news/deutsche-b...nipulators-942
Deutsche Bank has also agreed to provide information on other banks having
participated in the manipulation, so we should expect more revelations to
follow.
This news is a de facto acknowledgment of direct manipulation of
gold and silver prices by several large banks.
This may give us an idea about the topic of the exceptionally urgent
meeting at the Fed at the start of the week...
Deutsche Bank has been at the center of all worries for awhile, primarily
due to its enormous derivatives portfolio and, secondly, because its stock
decline mirrors almost exactly that of Lehman Brothers before it went
bankrupt.
.
Deutsche Bank sur le même chemin que Lehman Broth target="_blank"ers pic.twitter.com/0iCJpWTeIr
— Fabrice Drouin (@FabriceDrou target="_blank"in) 7 avril
2016
As was the case with target="_blank"the LIBOR manipulation scandal, the participation of several
banks in the precious metals manipulation scheme is being confirmed. Anyhow,
manipulating LIBOR – thus interest rates – makes no sense without intervening
with gold prices because, in theory, in a free market, low rates are
indicative of inflationary risks and, thus, a higher gold price.
These revelations are that much stunning in that the American regulator,
the CFTC, had ended an investigation concluding there was no price manipulation
in 2013. This development should potentially lead to a re-opening of this
investigation.
target="_blank" http://www.reuters.com/article/us-cftc-...E98O0SR20130925
Spot prices haven’t yet reacted to this news today but one may wonder if
the beginning of gold and silver panic buying will start to materialise,
partly due to investors becoming aware of price manipulation, but also and
above all, due to the opening of the Shanghai Gold Exchange on April 19, this
coming Tuesday. target="_blank"
http://www.reuters.com/article/china...x-idUSL3N17G2W4
Contrary to the COMEX and the LBMA, the Shanghai Gold Exchange requires
participants to deliver beforehand to the exchange the amount of physical
gold that will be negotiated. Thus, this has nothing to do with a market
where “paper gold” certificates can be traded.
So the Shanghai Gold Exchange is a purely physical market. Consequently,
there should then be two different spot prices: the Western spot price and
the “Chinese” one, the latter being higher, since based on physical gold
(meaning higher costs and premiums than for ordinary paper contracts).
So the question is: how high will the SGE fix the physical spot price?
If they fix it higher arbitrage will then come into play and will
literally drain the physical gold from the COMEX and LBMA vaults towards Asia
and the SGE.
Let’s understand this well: If the Shanghai Gold Exchange fixes the
physical spot price 10% higher than the Western spot, for instance, massive
buying will take place on the LBMA and the COMEX and investors will want
immediate delivery in order to sell it 10% higher on the Shanghai Gold
Exchange without any risk. This could effectively drain the physical gold
these two markets are supposed to hold.
Having two different spot prices will therefore render the Western spot
obsolete and probably put an end to the COMEX paper market, as well as the
LBMA’s, where the majority of participants do not supply the physical gold
equivalent to the volume of contracts being traded. A default on redeeming
those contracts by physical gold will signal the end of those “paper”
markets. This is the event the physical gold community is waiting for after
the launch of the Shanghai Gold Exchange this coming Monday, April 19, 2016.
We can guess that the gold miners will quickly decide to sell their
production at a higher price on the SGE in lieu of the “physical” London
market (LBMA).
It would seem., also, that the CME, that controls and organises the COMEX
market in the United States, is anticipating a major problem since an account
has been opened directly at the Fed in its name in order to have better control
of the funds deposited by its members (large banks) for taking speculative
positions. The CME seems to be preparing for a major default of one of the
largest participating banks... we could bet on Deutsche Bank defaulting,
since it owns the largest derivatives position (short positions on silver are
considered as derivatives).< target="_blank"/p>
https://www.goldbroker.com/news/c...ex-default-940
Let’s recall that India, the largest consumer of physical gold in the
world, has recently started to import gold again after the end of the
jewellers’ strike, which should help push the gold price highe target="_blank"r.
http://www.zerohedge.com/news/...ime-three-weeks
Let’s keep an eye open on these phenomena converging in the weeks to come,
because the “liberation” of the precious metals spot prices is taking hold
day after day.
Fabrice Drouin Ristori target="_blank"
Buy Gold with GoldBroker
|
