Gold is trading at USD 1,653.80, EUR 1,196.10, GBP 1,038.40, JPY 125,832.0, AUD 1594 and CNY 10,545/oz. Gold’s London AM fix this morning was USD 1,651.00, GBP 1,035.56 and EUR 1,191.37 per ounce. Fridday’s AM fix was USD 1,623.00, GBP 1,027.02 and EUR 1178.14 per ounce.
Cross Currency Table
Gold prices edged higher today in all major currencies. There are hopes that European leaders are moving closer to a concrete plan to solve euro zone's debt crisis which has lifted sentiment in commodities and equities.
Little progress was made by European Union leaders on Sunday and details remain very limited but optimism is high, likely too high, regarding a ‘Grand Solution’ at the second summit on Wednesday.
Data regarding Chinese economic growth and Japanese exports led to Asian equities seeing good gains. European equities opened higher but have given up early gains.
One of the major issues and talking points in the precious metal markets in recent years has been allegations by GATA and others that bullion banks and central banks may be intervening in free markets and surreptitiously manipulating gold and silver prices and keeping them artificially low.
It is an issue that is quite divisive amongst investors and in the market - including in GoldCore where opinions differ.
It is an important debate and one that has ramifications not just for the gold and silver market but for markets in general and for free market capitalism.
The ‘Great Silver Debate’ took place at the Silver Summit in Spokane, Washington on Friday where Bill Murphy of the Gold Anti-Trust Action Committee (GATA) debatedJeffrey Christian of the CPM Group.
The Great Silver Debate - Manipulation: Fact or Fiction? – GATA V CPM Group
The debate, hosted by Kitco, did not see a knockout blow with both contestants voicing their long held opinions regarding the manipulation of silver and precious metals.
It was a bit short on time at just 30 minutes and a full hour may have been needed in order to flesh out some of the many issues raised.
Christian recently accused GATA of being "a group that makes money by basically bilking gold investors out of fees to support GATA so they don't have to get legitimate jobs."
In the aftermath of the debate, GATA secretary Chris Powell accused Christian of "graduating from his usual distortions to outright contrivance."
Most of the mainstream media has ignored GATA’s allegations and the debate was not reported.
However, an important development over the weekend was an op-ed piece by the respected Gillian Tett in the Financial Times.
Tett is an award-winning journalist and author and is the US managing editor of the Financial Times. She has been positive regarding gold and gold prices for some time due to the degree of financial and economic uncertainty in the world.
Tett wrote in Saturday’s FT that it would be “foolish” to “deride or ignore” GATA and their allegations, not regarding manipulation in the silver market, but manipulation of the gold market.
In an article entitled “Is there a shadowy plot behind gold?’ (see commentary), Tett wrote that “the idea of a central bank manipulating world markets packs an increasingly powerful emotional punch with voters.”
Gillian Tett, US Managing Editor, Financial Times
Tett acknowledged that central banks intervene in and manipulate interest rates and her article explored whether central banks might also be manipulating gold prices.
“For my money, though, I think there are at least two reasons why it would be foolish simply to deride or ignore Gata, “ Tett concluded.
Tett acknowledged that some of GATA’s points “have at least a grain of truth”.
“Even if you find it hard to believe that central bankers would be dastardly enough to create a plot – or competent enough to do what Gata claims – the fact is that global commodity markets are pretty murky, central banks are often opaque and western rhetoric about “free” markets is often hypocritical. Those issues merit far more debate, not just among journalists, but central bankers too.”
She concludes that “whatever the “truth” behind these plot tales, the one thing that is clear is that these accusations are unlikely to disappear soon. Not, at least, while the world’s economy remains so unstable and terrifying for ordinary mortals. Or, possibly, until that gold price really soars.” Tett’s FT article may signal the beginning of a real debate about the allegations that GATA has made and that have yet to be rebutted.
It is an important debate as increasingly governments and central banks are distorting financial markets and the free market through constant interventions in markets.
In the western world, we have seen interest rates cut close to zero, capital injections and bailouts, lending guarantees, saving and deposit guarantees, favouring certain banks and institutions over others,banning short selling and now the latest intervention is the absurd - consideration of banning sovereign credit ratings.
At the same time competitive currency devaluations are taking place globally with central banks debasing currencies and outright intervention in currency markets in order to lower the value of national and supranational currencies.
Japan is the glaring example of this and Switzerland’s recent ‘pegging’ of the Swiss franc was in the same vein.
With governments surreptitiously and openly manipulating their currencies, it would seem like the logical that some governments might have an interest in not seeing gold and silver prices soar.
Surging gold and silver prices are a vote of no confidence in fiat paper currencies and government and central banks stewardship of these currencies. This is especially the case with the US dollar as the global reserve currency and all governments have an interest in maintain faith in the dollar and in fiat currencies which is a possibly motive for intervention in the gold and silver markets.
The ‘Great Gold and Silver Debate’ is set to continue. It is an important debate that all investors, savers and market participants should be aware of as it has obvious ramifications with regard to preserving and growing wealth in the coming years.
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