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Goldman Sachs is manipulating the gold price down ready to reverse it later says Jim Sinclair

Posted on 06 December 2012 with 8 comments from readers

Goldman Sachs has put out a negative call on gold saying that the bull market is over, exactly the sort of market manoeuvre predicted six weeks ago by ‘Mr. Gold’ Jim Sinclair, the widely followed veteran of the 1970s gold boom (click here).

Then he claimed the bullion banks would look to pull gold down one last time to allow them cover to reverse their own huge short positions in the market. Once this is safely accomplished they will go fully long in their own positions and take the gold price far higher.

Manipulated markets

This goes a long way to explain the recent rather unexpected downturn in the gold price and its moving lower with the US dollar, something that seldom happens. The big bullion banks are getting out of their short positions ready to profit again from the next leap up in gold prices.

Goldman told its clients last week: ‘Our expanded modeling suggests that the improving US growth outlook will outweigh further Fed balance sheet expansion and that the cycle in gold prices will likely turn in 2013. Risks to our growth outlook remain elevated however, especially given the uncertainty around the fiscal cliff, making calling the peak in gold prices a difficult exercise.’

Spot the weasel words at the end of that statement, Goldman as good as admits it is just as likely to be wrong in this call. However, it does seem to have been enough to put the wind up the gold market over the past week, doubtless with some enormous position shifting by the bullion banks making for most of the price action.

Bullion prices

As Mr. Sinclair wryly observes: ‘I promised you that the manipulators would shift to the long side of gold before the final parabolic move. I imagine that Goldman has a huge buy order for special clients, that is themselves. When was the last time Goldman Sachs did the world of investment and investors a good turn?’

Gold investors can either decide to try to second guess the bullion banks or sit tight, and in the absence of any special inside knowledge that seems the best advice. Mr. Sinclair has the bullion banks rumbled and will doubtless be proven correct in his judgement yet again. Cost push currency inflation is going to take gold prices much higher (click here).

He will be as right on this as he was about Chinese gold buying intentions a month ago… (click here).

Posted on 06 December 2012 Categories: Gold & Silver, Investment Gurus

8 Comments posted by readers:

Comment by James M - 06 December 2012

Dear Louise:
You called oil last year at $140, just before it dropped going forward. So much for charts.

Dear Richard R: No, you’re not losing your mind. Goldman is not God.

Dear Peter, good call. Gold is the buy.

Central banks are loading up on it, and Goldman is pushing the price down. Comical. Who’s your Daddy?

Comment by obewon - 06 December 2012

@ James M.:
Hello my Canadian e-friend! Enjoyed your rant above.

The only thing I can add to what you’ve stated is to add the following:
“Central banks are loading up on it, and not only Goldman, but particularly JP Morgan, or JPM are pushing the price down” (for both gold, and particularly silver).

When it comes to gold and silver manipulation, no firm does it better than JPM!

Comment by tim mckee - 07 December 2012

good comment..i stopped writing last year when any but the kindest fluff was edited..i was the one w/ the brilliant A$ symbol..postscript..i bought silver last year from may to sept i sit tight & keep mum..cheers

Comment by obewon - 11 December 2012

@ Tim Mckee:
In the long term, your silver investment will be one of the best investments you’ve ever made!

Comment by James M - 12 December 2012


Hey Obewon, what’s going on? I mean literally. I get the feeling we PM bugs have a completely different view of the world compared to the rest of the crowd. Reading from the manual, in our view central bankers cannot continue to print without wrecking the global financial framework based on fiat currencies, and by their printing, gold must go up as fiat debases. To gold bugs it’s elementary and yet to a vast majority of intelligent investors, some even famous hedge fund mangers, this view seems akin to believing in UFO’s. Now everyone is talking about the bond bubble, huge pools of capital chasing ever lower return rates, and betting returns will be even lower tomorrow, if not eventually negative. We’re in a recession where the backdrop is so distorting by lying numbers that you need to be a genius to understand how RE can appear to recover when real employment is dropping. Bernanke flat out states that he will print until 2015, whatever it takes. My question is, how vast and impermeable to common sense is this hallucination that the vast majority seem to be under? When do bonds break? 2014? I’m waiting for the spring construction starts. The gig will up at this point.

Its a fake world right now. That sums up my rant.

Comment by james M - 12 December 2012

PS: one thing i was remiss on mentioning is the pace of the decline, the quickening, the acceleration of trade drop-off. Canada’s trade numbers tell it. China’s numbers verify it. We are crashing. World trade is sucking wind. There is no longer a defensible grand illusion of recovery. The UAW in Mich went down today. We can smell the writing on the wall. Its over. It’s really over.

Comment by obewon - 16 December 2012

@ James M.:
Sorry for the delay in responding . . . this weekend was my daughter’s wedding; as a result, most of my time has been consumed in preparation as well as in the conduct of the wedding, the reception afterwards, and the dinner.

Things Will Not Return to Normal:
Most people in the West are not aware of the extreme dangers that still exist when Central Banks insist on manipulating everything, in order to make it appear that “things are headed back to normal.” Far from it. I have to give the FED a lot of credit, though, for their consistently devious actions. They can take credit (albeit, only for a while longer) for the almost constant efforts to maintain the global public’s confidence in US monetary policy (and hence, in the US dollar), while they:
a) proceed with their plans to debase the USD as rapidly as possible, and
b) suppress the gold price so it doesn’t erode public confidence in fiat currencies.

Bill Gross Raises the Red Flag:
I was reading a commentary from Bond King Bill Gross a few days ago, regarding the real consequences of:
a) long term FED ZIRP policies, coupled with QE4 through 2015, and
b) The US government’s refusal to deal with the Fiscal Cliff/massive structural problems in the US.

With certainty, one of many consequences is a very low GDP growth rate (less than 1% real growth, at best) for many years. The investment consequences are rather obvious.

The $64 Question that Everyone is Asking:
It’s well known that savings is essential to capital formation, and that the world requires increasing capital in the years ahead. So, in view of the current atmosphere of “near zero savings”, the FED’s ZIRP policy of very low interest rates is slowly, but inexorably killing capital formation over time. The $64 question is “how long can they get away with this?”

I strongly suspect that the FED will continue to “get away with” these egregious actions until late 2014, when:
a) the effects of near zero savings over many years will adversely impact capital formation, and
b) China will not longer “go along” with global gold price suppression game with the US/UK (… because their gold reserves will pass a critical threshold.

In sum, you’re right of course. It’s over; but the hubris and extreme arrogance of the FED prevents them from thinking clearly!

Comment by j ulysis - 12 September 2014

If the Waltons with their 160 billion and gates and buffett with their 160 billion didn’t buy and then control the monetary system through government bribery, we would still have a free market ruled merely by supply and demand. Now it’s up to them. I for one don’t buy their charity work, it’s a cover.

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