On May 25th, 2017, Jim Rickards published an op-ed entitled, "The Golden Conspiracy." In this article, Rickards makes the bold claim that gold has been subject to serial price manipulation for several years.
He begins the article:
"I spoke to a PhD statistician who works for one of the biggest hedge funds in the world. I can’t mention the fund’s name but it’s a household name. You’ve probably heard of it. He looked at COMEX (the primary market for gold) opening prices and COMEX closing prices for a 10-year period. He was dumbfounded. He said it was is the most blatant case of manipulation he’d ever seen. He said if you went into the aftermarket, bought after the close and sold before the opening every day, you would make risk-free profits."
Who Is Supposedly Behind the Manipulation?
Rickards goes on to state that one need not look any further than China to identify the culprit of gold's manipulation. His thesis, in simple terms, is China has a directive to play catch-up with other global economies by accumulating gold.
As of right now, Rickards explains:
"China wants to do what the U.S. has done, which is to remain on a paper currency standard but make that currency important enough in world finance and trade to give China leverage over the behavior of other countries. The best way to do that is to increase its voting power at the IMF and have the yuan included in the IMF basket for determining the value of the special drawing right (SDR). China accomplished that last September when the IMF added the yuan to its basket of currencies."
As Rickards sees it, China still does not have a "seat at the table" because its gold reserves as a percentage of GDP are still lagging rival economic powers like the United States and Russia.
Evidence to Support Rickard's Claim
Is there substantial evidence that gold, among other precious metals like silver, is being manipulated? Yes. In December 2016 alone, Deutche Bank had to pay $60 million to settle a gold manipulation case. In a lawsuit several months before the December settlement, Deutche Bank was facing scrutiny over a silver manipulation case in which it settled for $38 million. According to a report from Bloomberg, Deutche Bank offered details in its records showing that many other banks were involved in gold and silver manipulation schemes. Some of the banks included in the article are: HSBC, UBS, Barclays, Bank of America, and BNP Paribas.