gata.org / CHRIS POWELL / November 24, 2016
Dear Friend of GATA and Gold:
In his latest market letter, Tocqueville Gold Fund manager John Hathaway notes that the smashing of gold after the U.S. presidential election involved the dumping of futures contracts nominally equivalent to two years of production.
“We have observed on repeated occasions,” Hathaway writes, “that purely speculative paper transactions distort the price of real-world physical goods. In our view, price-disruptive distortions of this sort (including commodities other than gold) are enabled and encouraged by the willingness of the Chicago Mercantile Exchange to promote high-frequency trading to build profitability.”
That seems to be as close as any respectable participant in the financial markets can get to the issue of manipulation of the gold market.
Hathaway notes that the systemic risks to the world’s economy have not vanished with the election and argues that “exposure” to gold “may make more sense than ever.” His letter is headlined “Trump’s Victory: What Does it Mean for Gold?” and it’s posted at the Tocqueville internet site here: