The SPOT price of gold is set in a created opaque market organization with the central bank community in the lead creating 89 percent of the yearly total market volume through so called gold swaps.
The price discovery scheme for the worldwide SPOT price of gold
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This article is about the way the Central Bank Community manipulates the price of gold and the role of the LBMA within. We describe some of the signs that the Central Bank Community manipulate the price of gold and that they are using the LBMA to reach their goal. Is the manipulation of the gold price a classic case of Diffusion of responsibility because so many organizations are involved and avoid taking responsibility?
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This is an article about abuses in the gold market. It is meant to be for readers, who are well informed and interested in the gold market and monetary items, such as student (central) bankers, politicians, financial analists, supervisors, etc.
Based upon study we (re)constructed the Gold Price Intervention Circuit Diagram. The purpose for the (secret) interventions is the stabilization of the exchange value of the US dollar. There are many actors involved by the interventions vary from politicians, central bankers, institutions like the BIS, IMF and LMBA, Market Makers on the OTC-market (commercial banks), and Clearing Members LPMCL. We call an intervention secret if it has not been reported to market participants at the latest on the day the intervention was carried out by the one or two involved central banks, or not being reported at all.
It is obvious that the central banks within the BIS network handle an intervention policy for the price of gold. We (re)constructed some determinants of the (secret) Intervention Policy on the price of gold by central banks. The interventions set the Spot Price of gold.
The regulatory authorities seem to look away.
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In our paper from July 20, 2015 we concluded that JPM in cooperation with the BIS controls the dollar gold price by using their very dominant position in gold derivatives in the US Banking System. JPM held during 1999 – 2014 an average of 3.262 paper metric tons gold (derivatives) available for interventions on the development of the dollar gold price with the BIS as counterparty. Furthermore we concluded that the paper volume sets the dollar gold price and that there is almost no influence on the dollar gold price from the physical supply and demand. Overall the conclusion is that there is no free market for gold.
In our paper from October 7, 2015 we explained that JPM and the BIS are operating agents for the BIS network to maintain the confidence in the dollar and therefore manipulate the dollar gold price. We spoke about the artificial price drop in 2013 and the possible following dishoarding by private holders.
In this paper we will analyze the financial position of three leading mining companies considering the manipulated dollar gold price. We analyzed the annual statements of Barrick, Newmont and Goldcorp with their key business in gold mining (other products are by-products) and a combined market-share 2015 of 15,3% on gold mining worldwide. We concluded that there is in retrospect a combined average dollar gold price 2013 – 2015 needed of $ 1.890 per ounce to get break even (= the point of balance making neither a profit nor a loss). The realized combined average dollar gold price 2013 – 2015 is $ 1.274 per ounce. On any sold ounce gold the combined three mining companies loose more than dollar $ 600 per ounce, or 48%. It goes without saying that they struggle to stay in business.
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