Ross Norman, CEO of London bullion dealer Sharps Pixley, yesterday
disputed the 2013 study by a professor at the University of Western Australia
that concluded that prices in the twice-daily London gold fixings were
manipulated, a study publicized this week by the Sydney-based newspaper The
Australian:
http://www.gata.org/node/16835
Norman wrote that the study had not discovered market manipulation at all
but only that gold trading volume in London increases around the fixings
because of the greater liquidity at those times:
http://news.sharpspixley.com/article/london-f...-is-laid-bar...
Norman concluded: "It is no surprise that U.S. courts have seized
upon the academic report, prompting a flurry of lawsuits to be filed in what
is clearly looking like a pre-ordained desire for a guilty verdict in search
of evidence to support it."
Not having seen the study, GATA has no position on it, but Norman's
disparagement of the lawsuits brought against the bullion banks in the London
fixes is weak. For of course the plaintiffs would not have sued if they
lacked a "pre-ordained desire for a guilty verdict." Further, every
lawsuit in the United States is brought "in search of evidence to
support it." That's what the discovery and deposition processes in
lawsuits are about.
Norman's response is also weak because according to a filing in one of the
lawsuits Deutsche Bank has confessed to manipulating the gold market with
other banks and has agreed to supply evidence against them:
http://www.gata.org/node/16380
More details are needed in this regard but Deutsche Bank has a big
publicity department --
https://www.db.com/newsroom/en/news.htm
-- and thus has had every opportunity to dispute the filing but does not
seem to have done so.
But Norman's response is weakest because he surely knows that the biggest
complaints about manipulation of the gold market long have been directed
against governments and central banks, which have intimate relationships with
the London bullion banks.
How clarifying it might be if Norman, other bullion bankers, and all those
who dispute or at least resent complaints of gold market manipulation could
answer a few simple questions:
1) Are governments and central banks surreptitiously involved in the gold
market, directly or through intermediaries, or not?
2) If governments and central banks are surreptitiously involved in
the gold market, is it just for fun -- to see whose trading desk can
outperform the others -- or is it for the traditional policy objectives of
government intervention, to protect government currencies and bonds and
national stock markets against adverse developments in free markets?
3) Is government subversion of free markets in the public interest? Even
if governments should intervene in markets, should that intervention
be open and accountable instead of deceptive, or would open and accountable
intervention quickly lose effectiveness?
4) Are there any forgeries among the documents of this surreptitious
intervention that are compiled here?:
http://www.gata.org/node/14839
