For anyone who cares, here’s a snippet of the history on how the price of gold gets “fixed” in London each and every day;
LONDON - The financial district known here simply as The City is a hotbed of the loyal Order of the Masons, who have a penchant for strange rituals. But Masonry has nothing to do with an odd little ceremony performed twice every day in an office at N.M. Rothschild & Sons Ltd.
Five men talk on their phones for 10 minutes or so, and then lower tiny Union Jacks sitting on their desks. And that's it. The London gold fixings is complete. It takes place at 10:30 a.m. and 3 p.m., like clockwork. The same ceremony has been performed the same way, in the same place, and with mostly the same firms participating since the first gold fixing was enacted at Rothschild in St. Swithin's Lane on Friday, Sept. 12, 1919.
But gone are the days when Rothschild ruled the daily fixes [a.m. and p.m.] in gold--they quit the market on April 8, 2004:
Rothschilds Quit Gold Market & London Fix
The London Gold Fix has been a regular feature of the international gold market since Friday, September 12, 1919, when the five gold pool members met for the first time, at the premises of the London merchant bank N.M. Rothschild, and with Rothschild as the chairman. On April 8th 2004, N.M. Rothschild announced that it was withdrawing from the gold market.
On the morning of Monday 5th May 2004, gold was fixed as usual, but by a telephone conference between three market member in London and one in Paris.
A Tough Fix?
The longest fixing--the P.M. fix of Oct. 19/87--lasted for 2 hours and fifteen minutes [which means that the price was not fixed until 5:15 p.m. GMT] when the stock markets crashed on Black Monday in late October [19th] 1987.
Most people old enough to remember know that global stock markets "crashed" over 20% on Monday, Oct. 19, 1987. What most people forget is that North American equity markets [the DOW] had declined by a little more than 100 points [4.6%] on Friday, Oct. 16, 1987. The Friday Oct. 16, 1987 equity market decline was precipitated by a sell-off [rates rising] in the bond market.
From personal experience working on a trading desk at the time, I remember that the price of gold had DRAMATICALLY risen before 6:30 a.m. ET Monday morning [the huge price increase had occurred Monday, Oct. 19th at the London a.m. fix] LONG BEFORE North American Equity markets opened. I can attest to the fact that the "buzz" in global markets that morning was the dramatic rise in the gold price from Friday afternoon to Monday morning.
What This all Means
So, are we to believe that a 100 point drop in the DOW produced a 14.25 per ounce lift in the price of gold and a 300+ point drop only produced a paltry 1.25 per ounce increase--after a record 2-1/4 hour delay--when the financial world was seemingly coming apart? The DELAY in fixing the price of gold at the p.m. fix on Oct. 19th, 1987 is clear evidence that NO ONE in their right mind would sell gold.
They couldn’t find ANY sellers at prevailing market prices--the market couldn’t clear.
A dramatically higher price which would have allowed the gold market to "clear" would have sparked additional fear and further damage in the bond market.
Ergo, the delay can ONLY be logically explained in that enough Central Bank gold had to be mobilized to suppress the gold price rise giving the false appearance that "all is well" in our systemically broken, irredeemable fiat money system.
Forensic Examination: The Historic Mechanics of the Gold Price Fix
If at the opening price there are only buyers or only sellers, or if the numbers of bars to be bought or sold does not balance, the price is moved and the same procedure is followed until a balance is achieved. The Chairman then announces that the price is fixed. It should be noted that the Fix is said to balance if the buy amount and the sell amount are within 25 bars of each other. The Fixing will last as long as it is necessary to establish a price that satisfies both buyers and sellers.
Gold price suppression has been practiced by monetary elites--Central Banks--for a great deal longer than virtually anyone cares to admit. The history of the London Gold Pool and other episodes like October 1987 provide evidence that when economic times get challenging or tough – gold price suppression is usually evident. With the well documented economic/financial challenges we are experiencing today – would any of you really want to bet any of your money that the gold price is not being manipulated?
Rothschild exited the gold market back in April 2004. The reasons given at the time were to the effect that there “was no money in it”. Today the price of gold is in excess of 1,200 per ounce. Did Rothschild get insanely rich by being dumber than dumb?
Do you really believe there was no money in it?
On an ongoing basis, evidence continues to mount that the gold price is still managed and manipulated. We see the entrails of this price management through Central Banks refusal to answer pointed questions regarding their activity in the Gold Swap Market [a widely misunderstood activity that broadly allows Central Banks to 'double count' the amount of gold bullion they report to have in their vaults]. We also see evidence of this activity through massive concentrations of "short positions"--held by Central Bank friendly commercial banking institutions--on exchanges like COMEX, where so called paper gold [futures] are traded. But most of all, we see the entrails of gold market price suppression in the physical market--the Achilles Heel of price rigging--where widely reported premiums are being paid for physical bullion and where the U.S. Mint continues to have difficulties meeting their Constitutionally mandated obligations of supplying the market with adequate stocks of gold and silver American Eagle coins.
Got physical gold yet?
Today’s Market
Overseas equities began the week on a sour note with Japan’s Nikkei Index losing 56 points to finish at 9,196. North American markets ended the day mixed with the DOW off 1.1 to 10,302, the NASDAQ ahead 8.39 to 2,181.87 and the S & P adding .15 to end the day at 1,079.40. NYMEX crude oil futures lost .21 to end the day at 75.18 per barrel.
On foreign exchange markets the U.S. Dollar Index dropped .40 to 82.52.
Benchmark interest rates--the 5 yr. government bond was last seen at 1.39% while the 10 year bond was last seen at 2.58.
Precious metals were broadly higher with COMEX gold futures ahead by 9.20 to 1,225.60 per ounce while COMEX silver futures added .27 to 18.43 per ounce. The XAU Index gained 2.60 to 175.00 while the HUI Index gained 7.65 to 461.57.
On tap for tomorrow, at 8:30 a.m. July Housing Starts data is due--expected 550K vs. prior 549K. Also at 8:30 a.m. July Building Permits data is due--expected 570K vs. prior 583K. Additionally at 8:30 a.m. July PPI data is due--headline number expected +.1 % vs. prior -.5 %. Core PPI expected +.1% vs. prior +.1%. At 9:15 a.m. July Industrial Production data is due--expected +.8% vs. prior +.1%. Also at 9:15 a.m. July Capacity Utilization data is due--expected 74.8% vs. prior 74.1%. Wishing you all a pleasant evening!
