There is no shortage of conspiracy theories related to gold and silver. However, I have never found much credible substance in such theories. For the first time in recent years, there is a report that is worth monitoring.
German regulators are investigating Deutsche Bank regarding gold and silver price manipulation. This is important because Deutsche Bank is one of only three banks involved in London silver fixing, and one of the five banks involved in London gold fixing. HSBC and Bank of Nova Scotia are the other two banks that fix silver prices. In addition to the foregoing names, Barclays and Societe Generale take part in gold fixing.
The London gold fixing has been a major determinate of gold prices since the end of the First World War.
London is also the center of Libor interest rate fixing. After regulators determined that the banks were illegally fixing interest rates, many major banks have paid hefty fines.
The results of the gold and silver probe are not known at this time.
Ignore The Conspiracies
Conspiracies are great for entertainment, but they do not help investors generate profits. The reason is that conspiracies are backward looking, but markets are forward looking. Even if it is found that there were problems with London gold and silver fixings, it will have no meaningful impact on prices going forward.
Instead of focusing on conspiracy theories, investors should focus on the following three points.
Supply And Demand
In one respect, gold and silver are like other commodities in that they move based on supply and demand imbalances.
Traditionally supply has come from mines, recycling of old gold and silver, and selling by central banks…Read more at KITCO
