Is Gold Manipulation Breaking Down?

Gold Fix Demise May Free Gold's Price To Rise

Deutsche Bank Departs London Fixings On Tuesday 13th May
German banking giant, Deutsche Bank, announced yesterday that it will be resigning from both the London Gold Fixing and London Silver Fixing panels, and that it is withdrawing without having found a buyer for either of its seats on the respective panels. According to informed sources, the Bank’s last day as a member of the Fixings is Tuesday, 13th May.

While Deutsche’s resignation was expected and there had been signs that it was struggling to find  buyers, the news is noteworthy in that by giving only two weeks’ notice, the bank’s departure is now imminent, and the worst case fear for the other participants seems to have now been borne out, namely that prospective buyers of the seats have been frightened off by the growing regulatory investigations into the nature of the fixings and additionally, up to 20 commercial lawsuits which are alleging that the Fixing process is conducive to the manipulation of gold and silver prices.

When Deutsche departs, this will leave only four members, namely, Barclays, HSBC, Société Générale (SocGen) and Scotiabank, and only two members for the silver fixing, HSBC and Scotiabank. SocGen currently chairs the Gold Fixing, while the Silver Fixing is currently chaired by Scotiabank.

Now that there are significant regulatory and litigation spotlights on the Fixings, there is a real possibility that it may signal the beginning of the end for this historic price discovery process.

How this would affect gold and silver prices is not known, however, if there is found to be any basis to the price manipulation allegations, the removal of such manipulation would be expected to allow gold and silver prices to move to higher, to more natural price levels. 

My view:

With massive volumes of physical gold headed to China, Russia & Turkey, is the manipulation mechanism finally coming to an end?