There is a history of governments and central banks manipulating the precious metal market. Governments and central banks have long been involved in the precious metal markets, both as buyers and sellers, and their actions have had significant impacts on prices.
One well-known example of government manipulation of the precious metal market is the London Gold Pool, which was created in 1961 by the United States and several European countries to stabilize the price of gold. The London Gold Pool was a group of central banks that agreed to sell gold to keep its price from rising above $35 per ounce, the official price set by the Bretton Woods agreement. The London Gold Pool collapsed in 1968 due to pressure from market speculators and rising demand for gold.
In addition to the London Gold Pool, there have been other instances of government intervention in the precious metal markets. For example, in the 1980s, the United States government reportedly worked with other countries to suppress the price of silver, which had soared to historic highs.
More recently, there have been allegations of market manipulation by governments and banks. In 2014, for example, it was revealed that the London Gold Fix, a daily benchmark used to set gold prices, was being manipulated by a group of banks. In 2020, JPMorgan agreed to pay a $920 million fine to settle allegations of market manipulation of precious metals.
While governments and central banks do have legitimate reasons for intervening in the precious metal markets, such as managing inflation and stabilizing exchange rates, there are concerns that their actions can distort market prices and hurt investors and traders.
US Government Manipulating Precious Metals
It is difficult to determine the exact number of times that the US government has manipulated precious metals markets throughout history, as these actions can take many different forms and may not always be publicly disclosed. However, there have been several well-known instances of US government intervention in precious metals markets.
One of the most notable examples is the US government’s sale of silver from the National Defense Stockpile in the 1940s and 1950s. The government’s large-scale sales of silver helped to suppress prices and maintain the value of the US dollar. However, these actions also created a glut of silver in the market and contributed to a decline in prices, which ultimately led to the US government’s decision to stop selling silver in 1958.
In more recent years, there have been allegations of US government manipulation of precious metals markets, particularly in the context of futures trading. For example, in the 2010s, there were allegations that the US government and some of its agencies were involved in the manipulation of the silver market. These allegations were based on evidence of large-scale short selling of silver futures contracts by US government agencies, including the Federal Reserve.
While the extent of US government manipulation of precious metals markets is difficult to quantify, these actions have had significant impacts on market prices and have been the subject of controversy and debate for many years.