Is the Price of Gold Manipulated?

Dirk G. Baur

University of Western Australia - Business School; Financial Research Network (FIRN)

August 14, 2015

FIRN Research Paper

An increasing price of gold provides signals about the value of fiat money and can influence confidence in the financial and monetary system. Central banks therefore have an interest in gold price movements. This paper summarizes the main arguments for central bank gold price management, it replicates commonly used analyses to support the claims of price suppression and presents new statistical evidence. Conversely, we find no clear evidence of gold price suppression and provide explanations for apparent anomalies including liquidity, investor behaviour and the gold carry trade. Despite statistical evidence against central bank gold price manipulation, the size of the gold market and the global role of gold as a thermometer for the value of fiat currencies render it difficult to comprehensively dismiss claims of manipulation.

Number of Pages in PDF File: 32

Keywords: gold, manipulation, central banks, gold lending, gold carry trade

JEL Classification: E30, E40, E50, F33, G14

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Date posted: September 17, 2013 ; Last revised: August 14, 2015

Suggested Citation

Baur, Dirk G., Is the Price of Gold Manipulated? (August 14, 2015). FIRN Research Paper. Available at SSRN: http://ssrn.com/abstract=2326606 or http://dx.doi.org/10.2139/ssrn.2326606

Contact Information

Dirk G. Baur (Contact Author)
University of Western Australia - Business School ( email )
School of Business
35 Stirling Highway
Crawley, Western Australia 6009
Financial Research Network (FIRN)
C/- University of Queensland Business School
St Lucia, 4071 Brisbane
HOME PAGE: http://www.firn.org.au

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