Switzerland’s competition regulator identified seven banks that are being investigated as part of a probe into whether companies in Europe, the U.S. and Japan colluded to manipulate the prices of gold, silver and other precious metals.
UBS Group AG, Deutsche Bank AG, HSBC Holdings Plc, Barclays Plc, Morgan Stanley, Julius Baer Group Ltd. and a unit of Tokyo-based trading company Mitsui & Co. Ltd. are part of the probe, which was opened in February, the Competition Commission said in a statement Monday.
It is hard for me to get around what this so-called manipulation is about. Any significant trader in any market realizes at some point that with sufficient buying/selling power he can create certain reactions from other traders, over a very short-term period---perhaps just minutes or seconds.
Should traders for some reason on a free market not be allowed to trade based on an understanding of these patterns? Should more than one trader not be allowed to team up on the free markets with other traders?
It strikes me that this is simply denial of a basic freedom to transact. Is anyone forcing anyone to trade with these people?
The only place there is real price manipulation is when a government is involved. When a central bank manipulates interest rates, when a regulatory body prevents, say, the entry of taxi cars in a region and regulates prices. That is manipulation. But a trader or a group of traders taking a position in a market does not prevent any trader or group of traders to take an opposite position and attempt to move the market in the opposite direction.
Furthermore, unless you are a central bank that can print money at will, it is impossible to force a market in a direction it doesn't want to go, for any significant period of time.
If you don't have the skill set to trade where other skilled short-term traders trade, then don't, just like you shouldn't be buying stocks long-term if you don't know how to evaluate stocks.
If you understand how these short-term traders think, then it is pretty easy to trade against them or use their trading strategies to your advantage, Further, this type trading is very short-term in nature. There is not a trader alive that can keep a market from going in the direction the buying/selling pressure is pushing it long term,
There is an impression that these so-called "manipulations" are keeping prices substantially different over the long term then where they would be without the manipulations, Not a chance.
There is no trader alive or investment bank that can "manipulate" a market opposite a massive wave of buying or selling.