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Inside Deutsche Bank’s Manupulation of the Precious Metal Market

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What gripped precious metals

Action gripped precious metal markets in April. But there have been a number of factors playing around precious metals: the weakness of the US dollar, the monetary stimulus for Japan and Europe, the conundrum around the Fed’s withdrawn rate hike, and the yuan’s volatility in China. All these have led gold and silver futures contracts for June and July expiry to rise by 4.6% and 15%, respectively, on a 30-day trailing basis.

Inside Deutsche Bank's Manupulation of the Precious Metal Market

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The changes in these metals were also extended to the mining-based shares and funds. AngloGold Ashanti (AU), Cia De Minas Buenaventura (BVN), and Coeur Mininig (CDE) have jumped by 13%, 25%, and 29.9%, respectively, on a 30-day trailing basis. Changes in gold and silver prices often amplify the changes in these mining shares. These three companies together make up 8.4% of the fluctuations in the VanEck Vectors Gold Miners Fund (GDX).

Other funds that also rose significantly in April include the Global X Silver Miners Fund (SIL) and Sprott Gold Miners (SGDM).

Deutsche Bank rigging markets

Another crucial factor that gripped the precious metal market in April 2016 was the rigging of gold and silver prices by Deutsche Bank. Deutsche Bank turned against the cartel by first settling a long-running silver price-fixing lawsuit.

According to the Reuters reports, the bank reached a settlement in US litigation alleging that the bank manipulated not only the silver price but also the gold price. Most importantly, as the actual settlement reveals, the bank has agreed that in addition to providing “valuable monetary consideration” to be paid into a settlement fund, as in the silver settlement, it would also cooperate in pursuing further claims against the remaining defendants.

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