CFTC to Investigate Silver Market Manipulation


"Whenever [silver] goes way up it's bad for Wall Street as they perceive it."

The CFTC says it will hold a public meeting March 25 to investigate claims of manipulation and discuss setting speculation limits in precious metals futures markets.

The public meeting "will be part of our ongoing look into how the commission regulates futures and options markets on commodities of finite supply" and will be similar to last summer's energy market hearings, said CFTC Chairman Gary Gensler.

The CFTC says it's received countless letters the past few years from concerned investors asking it to investigate possible manipulation in the gold and silver markets.

The concerned investors are mostly silver and gold bugs who believe a powerful bank cartel is manipulating the futures markets to artificially depress precious metal prices.

"I'm not suggesting they have a legitimate argument," said CFTC commissioner Bart Chilton about why he is considering the matter. "I looked at it carefully and I became convinced that it's something we should investigate."

Many of those pushing the inquiry are avid followers of silver market analyst and newsletter publisher Ted Butler and of the GATA, which is headed by Bill Murphy with Casey Research analyst Ed Steer on its board of directors and GoldMoney's founder James Turk as a consultant.

Speaking at the Silver Summit in 2008, Mr. Murphy explained, "Whenever [silver] goes way up it's bad for Wall Street as they perceive it. To keep it in line and not make it look too obvious, they make sure to go after the silver market in conjunction with gold as evidenced by Ted Butler's report."

Silver and gold bugs will be holding their collective breath to see what, if anything, the CFTC is likely to find. My guess is not much. In both 2004 and 2008, the CFTC issued statements saying it was looking into the issue, but in each case the agency maintained its findings didn't support manipulation claims.

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