Major banks such as Deutsche and Barclays have recently been fined millions of dollars for price smashing precious metals. I’m not sure if their actions have any effect on price control.
I believe there definitely is manipulation, but probably in all other markets too. Just like in oil when OPEC decides to intentionally cut production to try and raise price, etc.
The manipulation where they get fined is because it is illegal. In my opinion most of the "manipulation" so to speak in metals is legal per se. I view the Comex type of futures markets as allowing manipulation in a sense because it allows the equivalent of naked short selling. For example, if a person wants to sell "short" silver in the Comex, they put up a "margin" amount of $$$ and can control 5000 ounces of metal per contract. The current margin is $3960 if memory serves per contract. That means with that sum a person can "sell" or go long (buy) 5000 ounces of silver. They have to maintain that margin amount in their account if the price of silver moves against their position on any given day of course.
If a person bought 5000 ounces of physical silver at melt, it would cost $70,000. But for $4000 you can trade that same amount of silver with the futures. You don't even need to own or have access to 5000 ounces of real silver to go short, just $4000 and a futures trading account.
If large institutions want to move the price in silver, it wouldn't take much to load up on contracts and control millions of ounces of silver without needing the actual silver in hand nor the full value of that silver (what you would need to purchase the physical).
To me this whole system seems fraudulent and easily manipulated by deep pockets because all of the buying and selling of millions of "ounces" of silver without any need for the real metal (unless the long decides to stand for delivery, which is rare). Just paper contracts being bought and sold. And this is the system that sets the silver price you pay for real physical silver at the coin store. The changing premiums you pay are what show the real supply and demand of the physical metal, not the "spot" price itself.
The futures markets were supposedly designed to help producers (farmers, miners, drillers, etc.) hedge their output so they can try to reduce risk. But in reality it allows deep pockets to affect price too easily irrespective of the actual supply and demand of the underlying commodity in my opinion. However, there is probably no way to make such a market 100% fair.
Even though, if demand in silver and gold ever picks up again, the price will move up despite any "manipulation". Just like it did from 2001-2011.
