I worked my way through Speck's The Gold Cartel, a careful study...

I worked my way through Speck's The Gold Cartel, a careful study (it seemed to me) of gold price manipulation. Fairly hard going for me ... not my field, and was probably a bit more readable in the original German.

No one should confuse me with someone who knows what he is talking about, but...

Thing is I have been waiting for the interventions Speck documented on the NY markets around the middle of day ... the carry traders (who borrow gold for few % interest, invest in something with higher interest, then buy gold to pay back the loan) must have been lying awake at night sweating over the relentless increases lately. Finally happened overnight ... classic intervention pattern ... but I am thinking if China is going to push the gold price up before it declares a BRIC gold based trading currency, which I would do if I was China, then NY interventions won't work. As I understand it increase in gold supply due to paper gold only works so long as buyers accept paper gold. If China and Chinese buyers demand physical gold in enough quantities then the supply of gold, inflated by paper gold, shrinks back to physical gold.

Someone who actually knows what they are talking about might want to chime in, but I will be watching with interest. Interventions, as I understand it, will fail if a a big enough whale keeps buying physical gold. I think officially China has about 4% of foreign reserves in gold, but assuming the true figure is double or more due to squirrelling away domestically mined gold, then multiplying the gold price by 3 or 4 times would make a huge difference to China's reserves in USD terms when the BRICS countries drop the hammer on the gold backed currency they have foreshadowed.

Just thinking aloud.