Sep 28, 2007

Citigroup acknowledges central bank scheme to suppress gold

A major New York investment house, Citigroup, this week acknowledged that central banks have been colluding to suppress the price of gold.

The acknowledgement came in a long report on the prospects for the metals and mining industry, "Gold: Riding the Reflationary Rescue." It was written by Citigroup analysts John H. Hill and Graham Wark, who, in a section titled "Central Banks: Capitulating on Gold?," write:

"Official sales ran hot in 2007, offset by rapid de-hedging. Gold undoubtedly faced headwinds this year from resurgent central bank selling, which was clearly timed to cap the gold price. Our sense is that central banks have been forced to choose between global recession or sacrificing control of gold, and have chosen the perceived lesser of two evils. This reflationary dynamic also seems to be playing out in oil markets."

You can read Citigroup's acknowledgement of the central bank scheme to suppress gold on Page 7 HERE

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