A lot of gold bugs think the price is being manipulated somehow, or that there’s some divergence between what’s going on in “paper” gold (gold prices that are tied to ETFs) and what’s going on in physical gold (people buying ingots or jewelery).
Randall W. Forsyth at Barron’s fans the flames of goldbug conspiracy theorists a bit this weekend, arguing that there have been suspicious sales in gold seen on the exchanges (probably driven by the ETFs).
These improbable moves have made gold bugs suspicious, which isn’t unusual. Folks who own gold do so because they don’t trust the status quo, especially when it comes to government-issued paper money. But just because you’re paranoid doesn’t mean somebody isn’t out to get you. They point to bursts of selling on Friday, April 12, which resulted in prices plunging by more than 5%, and to dumping that resumed the following Monday in Asia, early in the day when markets are illiquid. That culminated in a 9% collapse by the time the New York market had settled. But a seller who wanted to unload a large position at the optimal price would have done precisely the opposite—liquidate as discreetly as possible. Instead, sellers dumped the equivalent of more than 300 tons of the metal in staccato-like blasts during those sessions.
THE SUSPICIOUS SELLING resumed this Friday, with the equivalent of 17 tons sold on the New York Comex in two bursts in the morning, according to market sources. And the declines continued after the settlement of futures trading in the early afternoon as the SPDR Gold Trust ETF slumped a total of 2.25% on the day, to close at 131.07, below the April 15 close of 131.31. (The ETF represents a bit less than 1/10th of an ounce of gold.) The current-month May futures contract plunged 1.6%, or $22.20, to $1,364.90 an ounce on the Comex.
Full article: BARRON’S: There Were Two Gigantic, Suspicious Sales Of Gold On Friday That Caused The Price To Plunge (Business Insider)