Precious metals markets have been manipulated for a while

A cartel is an agreement between several market participants to set uniform prices and divide that market among them. Cartels exist in many commodity markets, including primary energy resources—coal, oil, natural gas, and shale; petroleum products; mineral fertilizers; timber; ferrous and nonferrous metals; and simple metal products.

For example, among the non-ferrous metal cartels, the international copper cartel "Copper Exporters Incorporated" (1926) gained a lot of power after World War I. It controlled 86% of copper production in capitalist countries and effectively brought the London Metal Exchange (LME) under its influence. However, this cartel was short-lived, collapsing during the economic crisis of 1929–1933. It is logical to assume that international cartels existed (and perhaps still exist today) in precious metals markets. There are various theories on this matter, as legal cartels did not exist in this market. Perhaps the only exception was the agreement reached in 2013 between Russia and South Africa on joint regulation of platinum and platinum group metal prices on the global market. It was expected that other countries, including the US, Canada, and Zimbabwe, would be able to join the cartel. The news at the time was accompanied by information that Russia and South Africa controlled about 80% of the world's reserves of platinum group metals. South Africa produced approximately 70% of the world's platinum, while Russia was the leading producer of palladium. During negotiations with South Africa in 2013, the agreement was signed on March 26, 2013. However, over the past 13 years, no information about the agreement has been publicly available.

But is there any possibility of a cartel agreement in the gold market? Discussion of a gold cartel was initiated by GATA—Gold Anti-Trust Action—"an organization whose aim is to investigate, expose, and oppose collusion in the price of gold and related financial instruments," which is their mission statement. The organization was established as a corporation in January 1999 in the US state of Delaware. GATA was created due to publications by Bill Murphy, a financial observer, and Chris Powell, a newspaper editor. Murphy's essay provided evidence of a collusion between financial institutions to control the price of gold. In turn, Powell, whose newspaper had previously been involved in antitrust lawsuits, responded by suggesting that gold miners and investment companies would sue financial institutions involved in the collusion. After GATA was created, Murphy became its chairman, while Powell got the positions of secretary and treasurer.

As its name suggests, GATA's founders suspected that a group of organizations was operating in the global gold market and manipulating gold prices downward. In its publications, GATA frequently used the term "gold cartel." Over time, GATA identified the primary participants in this cartel. These included the US Treasury, the Federal Reserve Bank of New York, the Bank of England, and several of the largest commercial and investment banks in the US and Western Europe, including but not limited to Goldman Sachs (GS). These organizations formed the core of the cartel. From time to time, other organizations involved in the cartel's operations also came to GATA's attention, including several countries’ central banks.

The gold cartel's goal was to decrease gold prices while keeping them as low as possible in order to prevent them from competing with the US dollar. 50 years ago during the 1976 Jamaica Conference, the gold-dollar standard was replaced with a paper-dollar standard in order to strengthen the dollar's position as a global currency. Gold, meanwhile, became just a commodity. But still, gold did not leave the world of money. In fact, it began to defeat the US dollar. This became particularly clear in January 1980, when gold prices soared, exceeding $800 per troy ounce.

That's when a secret gold cartel was formed, which began conducting gold interventions and driving down the prices of the precious metal. These interventions were carried out using gold from the Fort Knox reserves (the main depository of US gold reserves).

According to an IMF report published on GATA’s website in 2012 and deleted some time ago, it presents the global gold market and the role of central banks in its operations in 1999. Here are the key facts and figures from this report. In 1999, more than 80 central banks lent 15% of official gold reserves to the market, suggesting the value of outstanding gold loan obligations. Among the central banks that provided gold loans were the German Bundesbank, the Swiss National Bank, the Bank of England, the Reserve Bank of Australia, and the central banks of Austria, Portugal, and Venezuela, respectively.

According to the report, central banks were bearish on the gold market because central banks’ gold lending has a downward effect on the spot price of gold because gold lending is usually associated with gold sales in the spot market.

The IMF study further states that gold lending forced central banks to become active in the gold derivatives market, which involved selling gold through options. Also, the IMF document noted that the share of industrial countries in the total official gold lending market increased from 33 percent at the end of 1995 to 46 percent by the end of 1998, as some central banks in industrial countries increased their lending levels. Furthermore, new gold lenders, notably the Bundesbank and the Swiss National Bank, have entered the market.

Also, the GATA expert who posted this document noted, "With so many central banks secretly lending gold to financial institutions whose primary talent, as has been seen recently, lies in market manipulation, who, other than the usual disinformation agents, would deny that the gold market is being manipulated precisely to prevent the rest of the world from enjoying free markets?"

Also, rumors have been circulating that a cartel has long been operating in the silver market. According to the US Geological Survey, global silver production in 2024 was projected to be 25,000 tons. The top ten countries by silver production are as follows (in thousands of tons): Mexico - 6.3; China - 3.3; Peru - 3.1; Bolivia - 1.3; Poland - 1.3; Chile - 1.2; Russia - 1.2; the US - 1.1; Australia - 1.0; Kazakhstan - 1.0. As can be seen, Mexico leads the pack by a wide margin. It accounts for about 25% of global silver production. Mexico has been the global silver leader for many years already. There are suggestions that it has created a global silver cartel and acts as its coordinator, similar to Saudi Arabia's status as a key member and coordinator of OPEC+ countries. There have also been speculations that the silver cartel primarily consists of Latin American countries. Together with Mexico, they account for almost half of the world’s silver production. However, to date, there has been no strong evidence of a silver cartel's existence.

Moreover, an old article titled "The COMEX Silver Cartel," published in 2000 by Ted Butler, a renowned American analyst, is worth mentioning. It is sometimes cited by proponents of a cartel agreement in the silver market. According to this article, there are silver market manipulations on the COMEX, substantially suppressing the silver prices.