Apples and oranges of silver and gold price manipulation

We've covered the mechanisms used to manipulate the metals extensively, but it is important to point out the differences between gold and silver in terms of how they are managed. This is because it provides excellent insight into the relative character of each metal's unique supply and demand profile.

The Mechanisms of Gold Manipulation

Paper shorting via COMEX is perhaps the most egregious and most visible. Its signature can be tracked via reports issued by the exchanges. While the CME recently disclaimed the accuracy of the data, the blatancy of this interference has gone on so long that the existence of the numbers that prove intervention have very little impact on speculators.

Gold leasing has been the time-tested way that bullion banks are given cheap exposure to gold that they can borrow to sell into the market. This method comes with defacto sanctioning by the Exchange Stabilization Fund.

Direct Central Banks selling had been a common practice until it stopped, with the bigger story of the developing world monetary authorities publicly accumulating gold.

London price fixing may be the oldest and most opaque of all the intervention methodology. It has now re-entered the mainstream vernacular on the heels of the German quest to repatriate its physical gold holdings. Recently, Deutche Bank removed itself from the "fixing process," which also re-enters the collective awareness via the now generally accepted absurdity around the London Interbank Offered Rate (LIBOR). Essentially, a room full of representatives from the largest financial institutions making a collective decision on the price of assets that form the base of money flow and value is astounding.

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