Russell Endorses Gold Manipulation Thesis

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"The action is now so blatant it literally screams of manipulation."

Dow Theory Letters' Richard Russell has endorsed the radical gold-bug thesis: The gold market is manipulated. He says it won't workóbut the ride will be rough.

Russell is a much-respected veteran, with a remarkable record of calling some (not all) major market junctures. He is a long-time gold bug, but for traditional inflationary reasons. He resisted the new argument, developed by writers associated with Bill Murphy's Le Metropole Cafe, that the gold price is manipulated by a Washington-Wall Street alliance. But in his post last Thursday, Russell wrote:

"The desperate battle to keep gold below $1,500 continues. . .I'm fascinated to see whether June gold can close above $1,500 or whether the anti-gold contingent can manage to knock gold down [again]. The action is now so blatant it literally screams of manipulation. At its high yesterday, June gold sold at $1,506.50. By the close, June gold was trading at $1,498.10. It's almost embarrassing to watch the action. What we're seeing is the anti-gold crowd and the manipulators vs. the great primary trend of gold."

"The battle about gold closing above $1,500 is that once above $1,500, technically, gold will be on its way to $2,000. And from there 5,000 will be the target. . .from the anti-gold crowd's standpoint, gold must be held [on a closing basis] below 1500."

Spot gold reached $1,515 early Monday.

"When you think about it, it's no wonder Wall Street and the Fed hate gold. Gold exists outside the system. The Fed can't manipulate or create gold the way they do Federal Reserve Notes. When gold rises, as it has been doing, it hoists a red flag over Wall Street, the Fed and the economy. . .all the lies, corruption and secrets of the Fed and the politicians can't erase the dire message of gold."

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