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Updated 07:04 25/09/20

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Gold smashed as economy weakens

Duncan Richardson, News Editor
30 Nov 2015, 1:22 p.m.

The global economy is grinding to a halt. Non-Government data is pointing to falling demand across all levels of the economy. The Baltic Dry Index, which measures the price of moving raw material by sea, and often seen as an important economic indicator is at an all-time low. As western demand weakens commodity prices are in freefall. Copper, lead, zinc, nickel and aluminium are all trading at or near five year lows. Worryingly, this contraction is occurring as western economies prepare for the busiest shopping period of the year.

So why on Friday, after Russia announced a raft of sanctions against fellow G20 member Turkey, did the gold price fall to levels last seen in November 2009? As Americans paused for Thanksgiving, and at one of the most illiquid times of the day, someone felt it was a good idea to dump 19,595 paper contracts worth over $1.9 bn onto the Comex. Any rational trader looking to sell 58 tonnes of paper gold would wait until the market was liquid to mask the size of the trade and maximise the sale price.

This is not the first time this has happened and leads many to believe the gold price is being manipulated to disguise a collapsing economy. If this becomes apparent investors would be forced to sell their overpriced securities and park their money in a safe haven. Historically that place has been physical gold.

The gold price is currently trading at £703.11 per ounce, silver £9.40 per ounce, platinum £551.09 per ounce and palladium £367.43per ounce.

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