The Phaserl


Has China Manipulated The Gold Market?

from Seeking Alpha:

Gold prices have declined below $1,100 and the share price of SPDR Gold Trust ETF (NYSEARCA:GLD) has declined below $105. GLD made two unsuccessful attempts to break the $110 level over the past 9 months. The third one was successful. The main catalyst that helped it price to break the important support level was China’s announcement that the country holds 1,658 tonnes of gold.

The problem is that although China announced that its official gold reserves increased by 604 tonnes, or approximately by 60%, compared to the last public data released back in 2009, it is significantly less than expected. For example, Bloomberg Intelligence expected that the People’s Bank of China holds gold reserves of 3,510 tonnes, and the World Gold chief economist at Australia & New Zealand Banking Group Ltd. predicted that China holds official gold reserves of at least 3,000 tonnes.

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2 comments to Has China Manipulated The Gold Market?

  • Ed_B

    It would be absolutely shocking if China was NOT manipulating the gold market. They manipulate everything else they can get their hands on and so does everyone else. A market that is not manipulated is rapidly becoming a myth.

    But, as to China’s gold holdings, the number that they released is clearly bogus. We know for a fact that China now produces about 650 tons of gold from their own mines. None of this is sold. If their production for the past 6 years is averaged, it comes to just about 500 tons per year or 3,000 tons. Now, if we add to this the large amounts of gold that China has been buying, both directly and via proxy agents, that comes to around 1500 tons a year for the past 6 years or 9,000 tons. Combining these, we know that China has at least 12,000 tons of gold in their vaults plus whatever amount they have gathered up undercover that we do not know about. 1650 tons? Ridiculous!

    Something else that is ridiculous is the price of gold. We know that the banksters manipulate the price of gold lower for their own skulduggerous purposes and that the US Gov turns a blind eye to their illegal activities. That said, the demand for gold is to be rising rapidly along with the falling gold price. Silver is behaving similarly. The lessons of real economics (and not the silly Keynesian economics) is that one benefits the most by buying assets when their prices are low and then selling them when they become high. Every stock investor out there recognizes this. But those in the financial media skip over this obvious reason for buying physical gold and silver and continue to denigrate this most worthy of assets, along with those of us who choose to own them. While they can do this if they want, they need to understand that the cost of doing so is a lot of their credibility. Unless they want to become another CNN, they need to seriously address this shortcoming in their reporting. Yes, I know that they do this under the orders from their bankster masters, but still, it is becoming tiresome.

  • f16hoser

    Let’s say they are. At least their citizenry is buying gold (silver). What does the average dumb-down American buy? Plastic Chinese Crap from Wall Mart. Nuff said.

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