'Secret Monetary Policy': Who Manipulates Gold Prices and Why

from Sputnik News:

While major international events, like nuclear tests carried out by North Korea, affect gold prices and result in a situation when investors prefer to invest their money in the noble metal, economic expert Dimitri Speck believes that there are other, more important factors that play a crucial role in influencing the global financial market.

Gold prices have been subject to constant manipulations since 1993, German expert on the gold market Dimitri Speck told Sputnik Germany.

According to him, the manipulation of gold prices has been presented by the media as if it has been initiated by a couple of malicious traders just recently, but this idea is wrong.

"When the gold price manipulation started on August 5, 1993, these were central banks that initiated the process, and namely the then head of the US Central Bank Alan Greenspan. He did not want to let the gold price rise over $400," Speck said, adding that Greenspan feared that a significant increase in gold prices might affect the "inflation thermometer."

The expert noted that the US Fed had arranged an agreement among the central banks to keep the gold price below $400 dollars. This was done for several years by means of sales and loans.

Drivers of Gold Price Manipulation

Central banks, which often belong to the state, do not act alone, but work closely with private banking and financial institutions, Speck continued.

"With the help of price shocks, they [the institutions] shortly knock the prices down to drive other buyers out of the market. The state is the first to get benefit from all this, and this primarily concerns the United States. Well, and the dollar. These are the main beneficiaries of the gold price manipulation. Because the US dollar, as the main world currency, looks good in this case," the analyst noted.

Explaining how the manipulation process actually takes place, Speck noted that this happens "very simply," namely by "damaging other competitors." 
In this case, gold is the main rival to currencies based on loans, such as the US dollar and the euro.

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