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GRANT WILLIAMS: Because of its fascination for mankind, gold has always been surrounded by conspiracy theories and stories of price suppression and manipulation. That's really no surprise. After all, wherever you find money, you inevitably find human beings trying to cheat in some way or another.

Fake gold bars have frequently surfaced over the years, with gold-plated tungsten, which has an identical density to gold, being the most common substitute. Fortunately, any one of a number of very simple tests will provide a conclusive answer as to whether a particular bar is fake or not. Gold is unique. However, the most important questions about possible manipulation of the gold price concern much broader issues and occur at a much higher level.

NED NAYLOR-LEYLAND: Well, the question about manipulation is clearly a favored one. People like to discuss this. I do think that even a cursory glance at historical facts will lead you in a fairly clear direction. I mean, it's not like this is a hidden thing. The London Gold Pool existed. It was an overt way of managing the gold price in terms of its price. It's clearly in the interest of central banks to manage, particularly in the monetary system as it functions right now, whether it does function or not being a slightly separate point. It's clearly in their interest to manage the risk-free rates.

ROSS NORMAN: Would you influence the gold price? Well, it's said that gold is a reciprocal trust in central banks. You betcha. Would a cheaper gold price-- notwithstanding the fact that central banks are the biggest holders of gold, 68% of their reserves are in gold, would you want to suppress it? You betcha. The problem's too big. Are they doing it? I don't know is the answer. But money-- it's almost erasing certainty. They probably are.

GRANT WILLIAMS: Others, however, are far more confident not only as to the question of whether the gold price is manipulated, but also who the culprits might be.

JAMES RICKARDS: Well, the gold price is absolutely manipulated. When I say that, I'm not imply some deep, dark conspiracy. I don't think Janet Yellen wakes up in the morning and thinks about gold. I don't think Janet Yellen knows anything about gold, to be honest. I mean, she's sort of a geeky, liberal labor economist who worships the Phillips curve. So I don't think Janet Yellen is behind some conspiracy to suppress the price of gold.

But there's absolutely manipulation. And I've spoken to several experts. One is a PhD statistician. So it's not a PhD in economics. It's a PhD in statistics. Works for one of the largest hedge funds in the world. He looked at a 10-year time series. And he took, literally, tick-by-tick information on the COMEX gold future for 10 years.

And he said there is no explanation for this data other than manipulation. It could not possibly have happened through normal market forces. In particular, he knows that at the end of the day, like on the last trading tick on the COMEX, the price of gold got smacked down. And then at the open the next day, it could kind of pop up again.

So he said, well, this is the easiest trade in the world. Just buy gold right after the close and sell it the next morning, just before the open. And you'll just make consistent, steady profits. Well, anyone that knows anything about markets and how they operate knows that you cannot make consistent, steady profit. This is what Bernie Madoff said he was doing, right?

So he said the probability that the price naturally goes down at the close and naturally goes up the next morning is after 10 years. And this is not inference. This is like DNA. You may not see the crime being committed. But if you have the DNA evidence, you can be pretty sure who did it.

LUKE GROMEN: Governments everywhere throughout history have wanted to manage-- it's a critical national security, whether you go back to the time of the Romans, et cetera. Value of a currency is very, very important to manage, particularly if you're a government that hasn't managed your finances all that well. And unfortunately, that is, over time, most governments sooner or later find themselves in that position.

And so the manipulation is right there in the open, in that it is a creation of a derivative market that satisfies demand that would otherwise go to physical. And that was the goal of setting that up. And that's not well understood, I don't think, by many market participants. But as I said, it's there in black and white and the historic archives.

When you see gold trade the way it trades when it drops, someone sells $3 billion worth of notional futures at 2:00 AM New York time, having been on Wall Street for 22 years, I know for a fact that if any buy-side trader would execute an order like that on any consistent basis, they'd be out of a job very, very quickly. They're clearly somebody not trying to get best execution.

And if they're not trying to get best execution, what you're talking about's a currency intervention, basically. And so who is doing that? Is that originally the US government had a very strong interest in managing the perception of the dollar through gold. So, yeah, there was, famously, in the late 1990s, Eddie George, an official, I believe, with the Bank of England in UK, and he famously said, we looked into the abyss. If the gold price continued to rise, it would have taken down one major trading house, and a number of others would have followed. And so there is a sign there that the banks at that point had gotten involved in gold financing that left them short gold, in a way that any real rise in gold would have led to an existential threat to them.

DAVID FERGUSSON: Yes, I think the price of gold is manipulated. And I think it's manipulated in a number of ways. Certainly, there is a concerted PR campaign against gold by central banks for the reasons that we've discussed. It is very specifically in the statist and central banker kind of interest to ensure a weak gold price. You don't want to see essentially the gold price de facto recreating a sort of reserve currency by just being incredibly strong. So there's a constant barrage of negative publicity towards the gold, the gold industry.

When it comes to specific manipulation of the gold price, yeah, I think that is probably likely, too. And I can't-- the problem is we can't actually tell because of the way central banks don't-- they're very opaque with what they do their gold holdings, particularly their gold swap positions. But I think it's likely. And the reason why I think it's likely is because they've been manipulating other markets for a very long period of time.

JAMES RICKARDS: Now, historically, hedge funds were not players in gold. There was a few specialists. But they're doing stocks, bonds, or whatever. Well, they've sort of glommed onto gold. To them, it's just another commodity. It could be coffee beans, soybeans, lumber, who cares. It's a thing to trade.

Well, if you're short gold, like you've done some derivative contract with Goldman Sachs and you're short, it's easy to paint the tape. I mean, painting the tape just means manipulating the market through the gold futures market. Now, the other day, well, recently, a few weeks ago, somebody sold 60 tons equivalent of paper gold. Now, I make the point; they didn't sell 60 tons of gold. They sold gold futures contracts that were equivalent to 60 times.

But I can sell 60 tons of paper gold with a phone call to my broker. All I need is a brokerage account. They've got to put up some margin, like 5%. But it drove the price down, I forget, I think, $20, $30 an ounce in a matter of minutes. And so if I'm short over here on the derivatives side, and I dumped the gold here, and the price goes down, and then all of a sudden, I make money over here. Or maybe I want to go long, and I want to drive the price down and then buy at the bottom and ride it back up again.

GRANT WILLIAMS: So perhaps unsurprisingly, hedge funds and bullion bank traders push the gold price around to try and make profits. But while gold remains a strategic asset which sits at the foundation of many nations' balance sheets, there are players far, far bigger than hedge funds who don't care about making a profit but who have much broader and far stronger motivation to suppress the price of bullion.

JAMES RICKARDS: The important question is, who's doing it and why ? And the question I ask is, why is it not being investigated by the regulatory authorities, by the Commodity Futures Trading Commission? Now, one possible answer to that is that the Chinese are behind it, and they're outside the jurisdiction.

There's no way that a US government agency is going to investigate the activities of China in our markets. China's too big. They're a sovereign nation. That would not go anywhere. There could be a million diplomatic and national security and other reasons for not messing with China in that dimension.

So China's my number one suspect because people go, wait a second. They've got all this gold. Why would they want the price to go down? Well, the answer is they're still buying. Ultimately, they're going to want the price to go where it's going to go, which is $10,000 an ounce or higher.

But they don't want that now because they're still buying. They're playing catch up with the United States. And by the way, they've bought thousands of tons, which is a lot of gold. But they have thousands of tons to go to equal the US in the gold-to-GDP ratio, either in the absolute sense to get to 8,000 tons or in the proportional sense, gold to GDP. Either way, they're still playing catch up with the United States.

GRANT WILLIAMS: But not every gold market veteran buys into the idea that the gold price is subject to manipulation. It has to be said some of the reasons they offer as to why the idea of a state-sponsored price suppression scheme may be far fetched are both simple to understand and hard to argue with.

RICK RULE: I think that all financial markets are manipulated from time to time. Unlike many of my peers in the gold business I, have seen upwards price manipulation when that is easier. Long-term manipulation requires a conspiracy of a size that I don't think is possible. The idea is, an example, that the US government, the Trilateral Commission and the international Jewish conspiracy, or whoever they are, could come together and do a three-decade long manipulation in gold forgets that the US government can't educate the kids. It can't deliver the mail. It lost the war on drugs. It lost the war in poverty. It lost the war in Vietnam. And it lost the war in Afghanistan. How on Earth could they organize a broad-scale manipulation when they can't even manage their own campaigns?

DANIEL J. OLIVER: Most governments eventually wind up manipulating the gold price to protect their own power. So it's certainly a possibility. I've never seen a hard evidence of that. And also I would say that it is the nature of gold to under perform other assets in a credit bubble. You don't need a nefarious Federal Reserve pushing it down, because that's what happens naturally in a credit bubble.

Everything else goes up in terms of gold. And of course, when the bubble ends, as it must, things crash in terms of gold. That is a natural thing. And it's really what we saw over the last 40 years, when, for example, from 2000 to 2008, gold went up in nominal prices. But it went down in terms of oil and other commodities. So in fact, it did very badly in real terms.

When the bubble popped in 2008 and '09, gold did fantastically well, nominally and real terms. And then Bernanke managed to blow a bigger bubble. And so it's not really a surprise that gold did badly during that period. Now, was with the Fed manipulating it downwards? I mean, it's possible. But we don't need that as a theory.

GRANT WILLIAMS: But why would any suppression of the gold price be so important? And what might happen were it to be both exposed and shut down? January 2018, a group of traders working for the big bullion banks became the latest market participants to be fined for trying to manipulate precious metals markets, a pattern that has been commonplace over the years. But this proof of price manipulation in the gold market, like many similar episodes which have gone before it, had no meaningful impact on the price. However, any manipulation in the gold market, like all price suppression schemes, will ultimately come to an end at some point. And when it does, the potential ramifications are enormous.

JAMES RICKARDS: All manipulations fail at the end of the day. They all fail. The 1968 London Gold Pool failed. Late 1970s, US and IMF dumped, sorry, 1,700 tons of gold in the market. It failed. The price in 1980 was higher than ever. Late '90s, we twisted the UK's arm, got them to sell over half their gold. Now they're stuck. Early 2000s, it was Switzerland's turn. We got them to sell about 2,000 tons. But the problem is we have now run out of suckers to sell the gold.

EGON VON GREYERZ: One day, the holders of paper gold would realize that they will never get delivery because there ain't any gold to deliver against it. And they will sit there with their piece of paper, and whether it's COMEX or the bullion banks, all the people deal in gold, they will default. And at that time, there just won't be any gold available, and the gold price will obviously shoot straight up. And it'll be very hard to buy gold.

DANIEL J. OLIVER: One of the core lessons of history is that the market is more powerful than governments. And when this bubble we're living in currently pops, it doesn't matter how much they try to manipulate it. Gold will not be manipulated to that extent. So it will break out, whether they're manipulating it now or not.

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