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Silver ‘Spot Price’ set via a conference call with Bank of Nova Scotia!

November 27, 2013

Today’s Wall Street Journal stated that Regulators are investigating possible manipulation in the precious metals markets. The authorities doing the investigation are the Financial Conduct Authority (U.K.) and BaFin (Germany). To date, however, no evidence is available that would point to any abuse. The spot price of silver is set after a conference call at midday with the Bank of Nova Scotia. The two other banks involved are the Deutsche Bank and HSBC Holdings. There was no mention of which policymakers set the spot price nor was their information on how the spot price is determined. It would appear, however, that one measure of determining the spot price is via the computer prices within the realtime futures markets (as reflected on the electronic exchanges).

Bank of Nova Scotia is one of three banks involved in setting the silver spot price daily in real-time!

The article stated that HSBC and Deutsche Bank declined to talk about their procedures and processes (with respect to silver) and Societe Generale and Barclay’s also did not respond with respect to the gold fixing process. There are five banks which set the gold fixing and three banks involved in the silver fixing. A conference call is the procedure for arriving at the fixing price, however, the details of how this price is determined and what markets are used for determining the prices are still secret. According to the article, prices have been determined in London for gold since 1919 and for silver since 1897. London has been the center for this price-fixing for centuries (according to the WSJ article).

Deutsche Bank, AG is involved with setting spot price for gold and silver daily in real-time!

HSBC Holdings PLC is the third bank involved in setting the spot price for silver daily in real-time!

The article state that the CFTC, also called the Commodity Futures Trading Commission, hasn’t taken any action on the manipulation issues as yet, however, it has raised the issues with foreign regulators. When the CFTC was created in 1974 with the enactment of the Commodity Futures Trading Commission Act, most futures trading took place in the agricultural sector. Over the years, the futures industry has become increasingly varied and complex. Today, most electronic trading in the Futures Markets within the U.S.A. comes under the authority of the CFTC. Manipulation of markets is being prosecuted as evidence becomes pervasive. Example: March 14, 2012—The CFTC charges Joseph F. Welsh III in federal court with attempted manipulation of the prices of palladium and platinum futures contracts, including the settlement prices.  According to the complaint, while working as a broker at MF Global Inc., Welsh employed a manipulative scheme commonly known as “banging the close.” Welsh is also charged with aiding and abetting Christopher L. Pia, who had settled similar charges with the CFTC on July 25, 2011. (CFTC Press Release 6210-12, March 14, 2012)

CFTC in Chicago. Visit website at:  http://www.cftc.gov/index.htm

The manipulation of commodity prices in the precious metals markets has become extremely pervasive and obvious in recent months. The price suppression schemes are being reported daily by organizations and media such as: http://www.gata.org/ and http://www.kingworldnews.com/kingworldnews/King_World_News.html. Can the authorities discover who are behind all these manipulation schemes? This is the bigger question. To date, all the efforts to discover the perpetrators has not revealed those doing the manipulation. Are the Central Banks behind all this manipulation? Many think they are. Hopefully, the truth will emerge in the next few months. Enjoy this day! I am:  https://kingdomecon.wordpress.com

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