Gold and Silver Price Manipulation: Can It Be Empirically Verified?

By: GoldCore

Dr Brian Lucey, Dr Jonathan Batten and Dr Maurice Peat have just published some interesting research looking at the thorny issue of whether there is manipulation of gold and silver prices.

In their paper “Gold and Silver Manipulation: What Can Be Empirically Verified?”, they examine the issue of “gold and silver price manipulation, in particular price suppression.”

Source: Gold and Silver Manipulation: What Can Be Empirically Verified? – SSRN

Their research, to be found on the Social Science Research Network (SSRN) website, is not conclusive:

“Do these findings clearly support the notion of price suppression? No. They are at best suggestive,” said authors, Brian Lucey of Trinity College in Dublin, Jonathan Battena of Monash University in Australia, and Maurice Peat of the University of Sydney Business School.

The study highlights contract expiration dates as the likely time for price manipulation or suppression. The researchers said they noticed large spikes in returns around the last three days of each month, which is typically when futures and options contracts expire. However they conclude that

“it is likely that that the high volatility associated with the abnormal cluster is the driver of the results presented in this study, as opposed to manipulation.”

Precious Metal Prices

29 Jan: USD 1,112.90, EUR 1,019.89 and GBP 776.84 per ounce
28 Jan: USD 1,119.00, EUR 1,026.14 and GBP 781.59 per ounce
27 Jan: USD 1,116.50, EUR 1,027.14 and GBP 781.04 per ounce
26 Jan: USD 1,114.70, EUR 1,028.42 and GBP 785.80 per ounce
25 Jan: USD 1,103.70, EUR 1,020.29 and GBP 773.96 per ounce

This update can be found on the GoldCore blog here.

Mark O'Byrne

WINNERS MoneyMate and Investor Magazine Financial Analysts 2006

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