Gold News

Gold Bullion 'Loses' Deutsche Bank from Physical Market as 'Clear Manipulation' Hits Prices, Swiss Regulators Probe UBS

GOLD BULLION dropped and then swiftly recovered a $15 drop in Asian trade Thursday in one what long-time broker said was clearly "manipulation", but continued to trade below $1200 lunchtime in London as news broke that a leading bullion bank is quitting  physical deals.
 
After exiting the daily London gold and silver Fix benchmarks in early 2014, Deutsche Bank – the largest investment bank in Europe, and a market maker in wholesale bullion – "is exiting physical trading of precious metals," reports Bloomberg, citing a London spokesman but reporting from Frankfurt and Milan.
 
Now apparently planning to wind down its physical gold bullion, silver, platinum and palladium business, Deutsche Bank reportedly sold its base metal and energy business to US investment bank Citigroup this September.
 
Full London bullion market maker J.P.Morgan is also finding "new opportunities" in commodities as a result of banking peers quitting natural resources, Metal Bulletin today quotes Michael Camacho, co-head of commodities at the US investment bank.
 
"From our perspective...we don't think that because some banks pulled out, the commodities market is less competitive.
 
"If anything, the market continues to be just as competitive, just with different players in the mix."
 
With spot gold bullion trading very quiet Thursday as the US stayed closed for Thanksgiving, "Don't expect any fireworks," writes David Govett at brokers Marex Spectron, "apart from the overnight cowboys!"
 
Calling the 1.1% drop and immediate bounce back to $1199 "stupid", Govett says "Someone or some people have obviously decided to try and take advantage of a quiet market with fewer participants than normal.
 
"Perhaps it is seriously time for the regulators to look at these moves in the futures...If this isn't manipulation, then I really don’t know what is."
 
Deutsche Bank announced in January it was quitting the London gold and silver Fixes less than 18 hours after Germany's financial regulator BaFin said it was concerned about "manipulation" of precious metals prices, as well as foreign currency rates.
 
In June, Gold Fixing member and London market-maker Barclays was found guilty and fined for failing to prevent market abuse by a bullion trader back in 2012.
 
Swiss regulator Finma is now investigating 11 currency and bullion traders at major investment bank and London precious metals market maker UBS, press reports claim today.
 
A private lawsuit filed in Manhattan by jewelry business Modern Settings LLC accuses gold-bullion market makers Goldman Sachs, HSBC, as well as chemicals giant BASF and South African bullion bank Standard Bank, of conspiring to rig prices against traders in the US futures market.

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver and platinum market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and he has now been researching and writing daily analysis of precious metals and the wider financial markets for over 20 years. A frequent guest on BBC radio and television, Adrian is regularly quoted by the Financial Times, MarketWatch and many other respected news outlets, and his views from inside the bullion market have been sought by the Economist magazine, CNBC, Bloomberg, Germany's Handelsblatt and FAZ, plus Italy's Il Sole 24 Ore.

See the full archive of Adrian Ash articles on GoldNews.

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