Then when you think about some of the chronology for BaFin, they announced in the middle of November that they were going to investigate the possible fixing of gold prices or manipulating of gold prices on the London gold fix.
In the middle of December, they were said to have gone into Deutsche Bank’s offices to review their trading records. As I’ve said on January 17th, the head of that regulator said that it’s worse than LIBOR and on the next day, Deutsche Bank declined to continue being a member of the fixing of the London bullion market. When you think about what must have happened, my own feeling is that the regulator probably went back to Deutsche Bank having looked at their records and said, “Do you know what your boys in London have been doing here?” And of course the next day they quit the LBMA.
Then when I reflect on that regulator saying, “Okay, well, let’s look at what happened last year.” First of all, if you think about manipulation, there’s only one reason in my mind that bankers manipulate things. They don’t manipulate them for the bank to make money. They manipulate them for the employees to make bonuses.
When are bonuses determined? They’re determined June and December, at the end of the month. When did the gold price hit its lows last year? The last trading day of June and the last trading day of December.
If you can accept that it was manipulated, then you therefore would come to the conclusion, “Oh, it has been discovered, so maybe they won’t manipulate anymore.” Where can we go from here knowing that we won’t have this kind of repressive forces on the gold price?
So I think when you look at what has been made public about manipulation and what we have analyzed over the years, the flows of physical metals, which has suggested to us that there’s so much buying of physical metals that the central banks must be active in this market on the sell side not declaring their sales because I honestly think that demand for gold is twice the annual mine supply.
So I think we have lots of exciting things to look forward to in 2014. I think we could see a massive run up in the price of silver and gold, both to new highs and of course the impact on stocks would be incredibly dramatic.
- Source, Gold Seek: