Behind the Spot Price of Gold

Many people think that the price of gold for buyers and sellers is determined through the LMBA Gold Price Auction (formerly LBMA Gold Fix). This is not correct.

The LMBA Gold Price Auction does not set the price of gold and thus all other gold-related products for the whole day. In fact, the LMBA Gold Price is simply the price agreed to at that point in time (10:30am and 3:00pm); within minutes, the price of gold will fluctuate again based upon the so-called London Spot Price.

The London Spot Price is the basis for many transactions in gold. Actually it is a quotation made by dealers based on US dollars per fine ounce gold.

The London Spot Price is actually the quotation price of gold between Citi, Goldman Sachs, HSBC, JPM, UBS, Bank of Nova Scotia,  ICBC, Merrill Lynch, Morgan Stanley, Societe Generale and Standard Chartered Bank based upon their activity in the hardly regulated OTC market.

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The BIS network keeps a “lid on the dollar gold price”

This paper is a follow-up on “Is de dollar gold price controlled by JPM in cooperation with the BIS?” dated July 20, 2015. We explain 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. Furthermore we found a strong correlation between the gold price and the international reserves. In fact there is a variable gold standard on the so called free market. We continue with the artificial price drop in 2013 and the possible following dishoarding by private holders. At last we describe some public striking issues regarding the BIS network.

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Is the dollar gold price controlled by JPM in cooperation with the BIS?

In this paper we conclude 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 conclude 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. At last we ask ourselves of JPM and the BIS are operating agents for a higher goal and conclude that there is no free market for gold.

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