Should Central Banks Manipulate the Gold Price?

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...If indeed there is a concerted effort by banks to defuse the rise in gold price, it is perhaps not so much an anti-gold move, though, but an attempt to protect currencies and defuse the prospect of a total collapse in the US dollar...

...Many gold watchers believe in a ‘conspiracy' by the Central Banks to keep down the gold price, as has been seen recently by the impact of increased ECB sales just as the yellow metal threatened to break back above $700 an ounce again.

If indeed there is a concerted effort by banks to defuse the rise in gold price, it is perhaps not so much an anti-gold move, though, but an attempt to protect currencies and defuse the prospect of a total collapse in the US dollar. Gold investors may see this policy, if it exists, as an unjustifiable intervention in the natural scheme of things but, on the other hand, I don't really think we would want to see a collapse in the dollar with the worldwide financial and political chaos which could ensue.

Does the precious metals market need war or global strife? Neal Ryan of Blanchard & Co. posed this question in a recent research note to clients. His answer to his own question was as follows: "Short answer, no. In the last six years, gold has nearly tripled and silver and platinum have tripled in price, we've seen one of the largest and longest global economic expansions in history. The reason has been fundamental changes in the market. Less production, more investor demand. Smaller central bank sales, more dehedging by miners. Investors have been looking for diversification, China legalized gold ownership."

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