How is jpm manipulating silver

Morgan had with the criminal conduct admitted by Edmonds. Kovel then sought permission from the judge in his suit to reopen depositions he had taken as part of the case from of two former J. Morgan traders, including Edmonds, as well as from Michael Nowak, who at the time still was the bank's global head of base and precious metals trading. Shortly after Kovel made that request, the Justice Department asked the judge in the civil suit to put the case on hold as criminal investigation into J.

Morgan's precious metals desk continued. Prosecutors said the depositions, if reopened, could interfere with their probe. That stay was granted last Nov. The settlement of the civil case this summer came before Kovel got another crack at questioning the former traders in reopened depositions.

In September , federal prosecutors charged Nowak and two other former J. Morgan precious metals traders, Gregg Smith and Christopher Jordan , with participating in a racketeering conspiracy in connection with a multiyear scheme to manipulate the markets and defraud customers, as well as other crimes related to alleged spoofing.. It may be responsible for some short-term aberrations in asset prices, including the price of silver. However, there is another, more specific definition.

According to the U. Securities and Exchange Commission SEC , manipulation is intentional conduct designed to deceive investors by controlling or artificially affecting the market for a security. This includes rigging quotes, prices or trades to create a false or deceptive picture of the demand for an asset. A popular belief within the precious metals investing community is that gold is manipulated and the same goes for silver generally manipulated downwards, in what is described as price suppression.

More specifically, many silver investors believe that the market for silver is systematically manipulated. There are also worries about the discrepancy between paper silver and physical silver , the fairness of London trading, declining inventories at Comex and the leasing of silver.

At first glance, this theory makes sense, especially considering that the silver market is much smaller than the gold market, so it is easier to influence it, while a few financial institutions have already been fined for influencing or manipulating silver prices. Moreover, it is commonly known that in the s the U. Additionally, in the s, the Hunt brothers for some time attempted to corner the market in silver whether they purposely intended to manipulate the market or not, their actions pushed silver prices upward, not downward.

However, academic research has not found any clear evidence of silver price suppression. Moreover, when we look at the long-term behavior of silver prices see the chart below , we see clear cyclical patterns, not a permanent downward trend or even a flat line.

Therefore, from the long-term perspective, and especially looking at the s, it is hard to understand allegations of manipulation in the silver market. When the price of silver is decreasing, then this is the obvious effect of evil conspirators, but when the price of silver was rising in the s, then there was no manipulation and the true market forces were at work.

The influence on prices should only be short-lived, as low prices cure low prices. Hence, any attempts to systematically suppress silver prices would be counterproductive, since the reduction in the price of silver would trigger a market reaction in the form of higher demand and upward pressure on the price.

Moreover, their attempt to corner the market failed, as the price of silver plunged on March 27, the so-called Silver Thursday , causing losses of over a billion dollars for the Hunt brothers. Many people accuse bullion banks of naked short selling of silver in order to drive down the price. What is naked silver short selling? The idea is to take advantage of the price decline, as it enables to repurchase the white metal at a lower price. Get the latest Silver Investing stock information.

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Peruvian Metals. Treasury futures market, the CFTC said. Traders would place orders on one side of the market which they never intended to execute, to create a false impression of buy or sell interest that would raise or depress prices, according to the settlement.