LAWRIE WILLIAMS: Déjà vu in gold, silver,.pgm prices

It has been noticeable of late that each time precious metals prices appear to be seeing strong upwards movement, perhaps with gold approaching what could be the key $1,550 level, they are all mysteriously brought down to earth with a bang, despite there not being any particularly strong adverse news which might have this negative effect.  Indeed most recent news, with domestic political uncertainties in the key U.S. and European markets, coupled with other geopolitical and geofinancial uncertainties would appear as if it should be positive for the precious metals markets.

Newsletter writer Ed Steer describes these events as ‘engineered declines’ brought on by the big money banks which, for whatever reasons, seem to be seeking to suppress precious metals prices. This is thought to be at the behest of central banks and governments who see a rising gold price in particular as a critique of their economic competence, as indeed it is, This isdespite such concerted activity being illegal in that it destroys genuine free market access.  The legal system may take a different view from the powers that be, though, regarding the perhaps sanctioned manipulation of the precious metals markets, as highlighted most recently by the U.S. prosecution of JP Morgan employees and an ex-employee, over ‘spoofing’ in the precious metals futures markets. There is little doubt therefore, that this actually goes on and it is almost certainly far more prevalent than the numbers of actual prosecutions would suggest.  The potential rewards are far greater than the likely penalties. For the big money players greed is indeed good!

Yesterday’s substantial precious metals price declines would seem to fly in the face of logic given the President Trump impeachment process being begun and the various Brexit developments in Europe.  While these may be written off as unlikely to make any significant difference in either case, they do raise the uncertainty quota, and uncertainty in the markets should be precious metals positive. 

There are other geopolitical developments which might also be seen as precious metals positive and it is perhaps significant that the world’s largest gold ETF, GLD, alone has seen record gold inflows this month so far of 1.5 million ounces (around 47 tonnes).  The big institutions thus seem to be ignoring the engineered price decline - at least to date. There has been a minor price recovery in European markets this morning, but the key may be if the recovery continues after U.S. markets open later today..

We see the recent declines and bounce-backs in the precious metals markets continuing -perhaps even right up to the year-end, but the gold price $1,550 level will be breached, and decisively so in our opinion.  Once that happens, gold and silver in particular could be on their way to $1,600 or $20, or much higher, respectively. Maybe not to $2,000 in the short term, but that will come eventually. They will continue to serve as wealth protectors against declining currency purchasing power as they have since time immemorial.



26 Sep 2019

About the author

Lawrence Williams

Lawrence (Lawrie) Williams is a well known London-based writer and commentator on financial and political subjects, but specialising in precious metals news and commentary. He is a qualified and experienced mining engineer having graduated in mining engineering from The Royal School of Mines, a constituent college of Imperial College, London - recently described as the World’s No. 2 University (after MIT).

e: lawrie.williams@sharpspixley.com