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The Great Precious Metals Managed Retreat

November 3, 2012 in Gold, Precious Metals, Silver

From http://www.Silver-Coin-Investor.com

Many observers, notably GATA, have characterized the more than decade long run up in the precious metals markets as a managed retreat orchestrated by the big bullion banks.

These banks typically profit by using their large transaction size and deep pockets when the market is vulnerable to induce substantial price variations, often by triggering stop loss orders placed by short term speculators.

Price Suppression More a Reality Than a Theory

Perhaps one of the more popular criticisms of price suppression theories is that if the silver and/or gold markets were so managed in this way by the bullion banks, why have their prices risen so steadily over time?

First of all, this critique is weak because even largest corporate banks would have a hard time holding back the long term flow of investment funds into the precious metals markets. They may be able to trigger short term fluctuations, but the long term trend will overcome those variations.

On the other hand, if the real mover and shaker behind the bullion banks’ notable precious metal selling activities and consistent large short positions is actually a central bank or another official agency suppressing the price in order to prevent rampant inflation due to a devaluing paper currency, then that makes a lot more sense.

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