"London Fix" Gold Rigging By Bullion Bank Exposed In Class Action Lawsuit
Very interesting article, congratulations
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
Some interesting news crossed the tape late afternoon yesterday when it was reportedthat the silver bullion banks (Deutsche Bank, Bank of Nova Scotia and HSBC) were sued for manipulating the silver fix in a class-action lawsuit. However, a closer look reveals that the plaintff in the lawsuit, J. Scott Nicholson, has a recurring bone to pick with the banks as this is certainly not his first lawsuit alleging precious metals rigging, and as such we are convinced it will be tossed out shortly, along with every other lawsuit alleging a manipulated precious metals market since discovery could lead to some very unpleasant revelations about the primary source of gold and silver rigging: the central banks themselves, alongside the BIS.
Instead, we uncovered something that was missed several few weeks earlier: a far more informative and detailed class action lawsuit filed by Edward Derksen on July 9, 2014 against the London gold fix member banks: Bank of Nova Scotia, Barclays, Deutsche, HSBC and SocGen (profiled here in From Rothschild To Koch Industries: Meet The People Who "Fix" The Price Of Gold).
Recall from "How Gold Price Is Manipulated During The "London Fix"" that this was one of the first conspiracy theories about gold manipulation to end with a bank, and following the official revelation (as opposed to merely on the pages of fringe blogs) that over 100 years the price of gold was consistently manipulated during the London fix (and during every other period as well but that is a revelation for a different time) the very process of the Gold and Silver Fix itself was finally ended (only to be replaced with a comparable process run by the very same people who manipulated gold and silverfrom Rothschild's London office on St. Swithin’s Lane for decades.
The short and sweet summary of the lawsuit:
Nothing new there, but while the allegations in the lawsuit are well-known to frequent (and all other) readers of Zero Hedge, we recommend reading the full filing as it explains in clear English just what the fixing process worked.Perhaps what is more interesting are the abnormalities in the price of gold as highlighted by Derksen, which clearly show the critical role the daily fix has in the manipulation of the price of gold, both in a downward and upward direction: whichever suits the London Fix member banks.
Here are some of the highlights:
The following chart of average intraday gold price shows the same strong relationship between the physical gold and the COMEX gold futures markets.
Anomalous price movements during the fixing window that are highly suggestive of manipulation - like those on June 28, 2012 - can be witnessed on numerous days, where prices near the 3 p.m. London Fix spike, either upward or downward, and then retreat in the opposite direction as the price is “fixed”. Five trading days are analyzed below as illustrative of the overall trend during the Class Period. On February 1, 2013, there was a dramatic drop in price from nearly $1678 to below $1665, contemporaneous with the beginning of the London Fix. The price began recovering during the London Fix and continued afterwards. This movement around the fixing window is highly anomalous and suggestive of manipulation because it tends to show that the market ultimately discounted to some degree the pricing information that occurred during the London Fix.
On January 4, 2012, there was anomalous price movement before the beginning of the PM Fix call, this time in an upward direction. The gold price rose from below $1599 to more than $1614 within the half hour before the beginning of the call, only to surrender most of these gains within the half hour following the call. This movement around the fixing window (steep rise just before the call, with a clear reversal that begins at the very beginning of the call) is highly anomalous and suggestive of manipulation because it tends to show that the market ultimately discounted to some degree the pricing information that occurred during the London Fix.
read more