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Comment by AtlasBarfed | Hacker News Reader

Spot price appears to be manipulated for quite a while. Lots of demand for precious metals, yet the price isn't really going up, especially with inflation.

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Yes, it's incredibly odd. Most US large ETFs and crypto have basically been in lockstep for much of the last few years. Same with housing, delayed a bit. It seems to indicate that that we're seeing when we look at the price of these assets is largely just a map of inflation rather than a substantial increase in value (i.e. just a graph of non-USD assets going up in terms of USD as real value of USD decreases). The easiest thing to check against, though, is gold, which has barely budged in comparison. Metals are not moving in lockstep. Given inflation, and the uncertainty at the beginning of COVID, you would've really expected something there. Genuinely don't get it.

There are whisperings in the investment community that the market is manipulated. Almost all gold trading is ETFs, and their gold holdings are managed by a chain of custodians several layers deep, none of which conduct public audits. The terms of the ETFs make it clear that they are completely absolved from any risks and responsibility for the holdings. At the same time, the practice of leasing out the gold in the vaults is well documented, so it is impossible to know who (or how many) 'own' a given gold bar at any given time.

The industry could counter these misgivings, by making the holdings publicly auditable, but chooses not to.

It does seem that gold is not short. The price does seem manipulated to stay below $2k/oz.

Oops, I meant "net short", not "not short".

S&P is up 4 times since its low in 2002. Gold is up 6 times since 2000. And you call that "barely budged"?

Prices went up a lot following 2020 (way above the inflation numbers). I think they are finding a new spot around the inflation numbers (maybe a bit higher but not too much).

Why assume manipulated? Could be just lots of supply.

The supply of new gold at least is pretty high: https://twitter.com/LynAldenContact/status/17066072297915888...

“Lots of Demand”

[citation needed]

Gold as a store of value works better when the world is using it as a reserve, but they don’t anymore so it is just like any other limited supply commodity and doesn’t necessarily need to go up in price due to inflation. It only will go up due to emotion.

In 2022 alone, central banks purchased 1,136 tons of gold[1]. The us government holds over $500b in gold[2]. Gold is still valuable as a reserve asset because it’s highly liquid, demanded by every economy, and has low inflation. Central banks frequently do settle balances between each other by transferring gold (often just involve moving the gold from one part of a warehouse in London to another part). Gold hasn’t gone away, and it’s not fading out either.

[1] https://www.reuters.com/markets/commodities/central-banks-bo... [2] https://www.fiscal.treasury.gov/reports-statements/gold-repo...

It is not true that central banks "frequently" settle balances between each other by transferring gold. This is an event rare enough that it would typically be reported in financial newspapers if it happened.

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