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The Undeniable Manipulation of the Silver Market

For decades now, both the gold and silver markets have been awash with allegations of systematic price manipulation resulting in the severe suppression of the international price of 0.999 fine physical gold and silver bullion.

These allegations have been made by multiple organisations and individuals who have deep and extended involvement in both the gold and silver markets including the US-based Gold Anti‑Trust Action Committee (or GATA), American market analyst Ted Butler and commodities traders such as British trader Andrew Maguire.

These allegations have been dismissed by governments, regulators, central banks, commercial banks and other establishment institutions such as the mainstream media as wild conspiracy theories, however a closer look at the available evidence suggests that these allegations are in all likelihood true, especially in the silver market, and carry significant implications.

Over the past almost 40 years from 1980 to 2019, Australia has seen significant levels of economic growth and progress which has encompassed rising population levels as well as rising levels of income, wealth, debt and consequently rising prices all except in one critical market, that being the silver market.

As demonstrated in Diagram 1, the highest price for an 0.999 fine ounce of silver expressed in Australian dollar terms over the past 40 years was reached on 22 January 1980 at $AUD 44.82 per ounce[1]. At the end of November 2019, the price for an 0.999 fine ounce of silver was $AUD 25.08 or 44.0% down from its January 1980.

Moreover, at the time of writing of this article on 23 December 2019, the price of an ounce of silver in Australian dollar terms is $AUD 24.96, which is 44.3% lower than the peak price reached in January 1980.

Diagram 1: Silver Prices expressed in Australian Dollars

The market phenomena observed in Diagram 1 is extraordinary given the significant increase in the Australian money supply (i.e. inflation) which has occurred over the period of January 1980 to October 2019[2].

Across a whole series of Australian money supply metrics including M0, M1, M3 and broad money, the supply of Australian dollars which exists within the Australian economy has grown significantly over this time period by a factor ranging from 1,737% - 6,691% depending on the specific money supply metric considered as shown in Table 1.

Assuming a Constant Above-Ground Silver Stockpile

Assuming a constant quantity of known above-ground supply of 0.999 fine physical silver bullion between January 1980 and November 2019 and genuine price discovery within the silver market based on real physical demand and supply forces, the price of an ounce of silver expressed in Australian dollars should be significantly higher than the silver price recorded in November 2019[3].

To provide an approximate estimate of what a 0.999 fine silver price may be under this scenario, the money supply growth rates from Table 1 were used to extrapolate the peak silver price as recorded on 22 January 1980. These extrapolated silver prices are shown in Table 2.

Considering the Growth in the Above-Ground Silver Stockpile Given the dramatic increase in the Australian money supply over 40 years, the only possible justification for why the current per ounce price of 0.999 fine physical silver bullion is approximately 44% (using the October 2019 price) lower than its January 1980 peak price is a dramatic increase in the above‑ground stockpile (or tradeable supply) of 0.999 fine physical silver bullion that would offset the increase in the Australian money supply.

According to an official 29 May 1981 report by the Commodity Futures Trading Commission (known as the CFTC) to the US Congress[4] the above‑ground stockpile estimate of 0.999 fine physical silver bullion for non-communist countries as of 30 September 1979 was 1.2873 billion ounces[5].

Noting that according to the Silver Institute the global amount of tradeable above-ground 0.999 fine physical silver bullion by the end of 2018 was approximately 2.5 billion ounces[6][7], the growth in the above‑ground stockpile (or tradeable supply) of 0.999 fine physical silver bullion during this period is approximately 94.2%.

Although, when it is considered that the 1979 estimate does not include communist countries, with the most significant countries during this period being the Soviet Union and China, the growth rate in the above-ground stockpile of 0.999 fine physical silver bullion was likely to be lower than 94.2%.

Nevertheless, if the extrapolated prices in the constant above-ground silver stockpile scenario are adjusted for a 92.4% increase in world silver stocks, the estimated price of an ounce of 0.999 fine physical silver bullion ranges from $AUD 400.99 to $AUD 1,544.14 per ounce as outlined in Table 3[8].

If these estimated prices as outlined in Table 3 are compared to the current market price of $AUD 24.96 per ounce of 0.999 fine physical silver, then the percentage difference ranges between 1507% and 6086% as outlined in Table 4.

How Manipulation Occurs

The difficult-to-explain price disparities between the current market price and the estimated prices based on money supply and physical above-ground stockpile dynamics suggests and add substantial weight to the allegations that the precious metals markets such as silver which is controlled through centralised commodity exchanges such as the COMEX (as part of the CME Group) and London Bullion Market Exchange (otherwise known as the LBMA) are being manipulated and do not reflect genuine price discovery based on real supply and demand forces.

Of those organisations and individuals who claim that silver market manipulation is indeed occurring, they also suggest that the manipulation is occurring through multiple forms and mechanisms including:

  • the placement of significant numbers of unbacked sell orders (or shorts) in the silver futures market, meaning that the silver paper sell orders are without the requisite physical silver bullion to deliver on the contract (otherwise known as ‘naked shorts’);

  • the placement and withdrawal of fake trades in the gold and silver futures market (this practice is known as spoofing);

  • rigging of rules at the commodity exchanges such as the COMEX and LBMA which allow for futures contracts to be settled in cash rather than requiring the delivery of the requisite physical silver;

  • the rehypothecation of physical silver bullion which means that the same ounce of silver is used as collateral in multiple loan and lease agreements including with ETFs such as SLV; and

  • the use of dark pools of money such as the US Government Treasury Department’s Exchange Stabilisation Fund which is liquid enough to fund the manipulation and suppression of the prices of critical commodity markets such as gold and silver.

JP Morgan Labelled a ‘Criminal Enterprise’

Moreover, accusations of market manipulation have been given more credence in recent months when in September 2019, the US Department of Justice pursued JP Morgan Chase, including the bank’s Global Head of Base and Precious Metals Trading, for market manipulation of multiple precious metal markets including the silver market under the Racketeer Influenced and Corrupt Organisations (RICO) Act.

In their indictment, the US Department of Justice labelled JP Morgan Chase’s ‘Metals Desk’ as a ‘criminal enterprise’[9].

These allegations were based on a 2018 confession received by a former JP Morgan Chase precious metals trader who confessed that he engaged in market manipulation via spoofing between 2009 and 2015 with the full knowledge of his superiors[10].

At the time of writing of this article in December 2019, the criminal probe into trading activities of JP Morgan Chase remains ongoing, although some criminal charges have been brought forward already.

Implications of Silver Market Manipulation

There are several implications resulting from the suppression of the international silver spot price for stakeholders directly involved in the precious metals market as well as for the broader economy. These implications include:

Physical Silver Market Stakeholders

  • Owners of unmined raw physical silver (e.g. countries such as Mexico, China, Peru, Australia and Russia, etc) and miners of this raw physical silver have not been adequately compensated for their resources and their efforts to mine these resources to the tune of trillions of dollars;

  • Owners and investors of physical silver (and related assets such as shares of silver mining companies) have not enjoyed fair market returns (and may have actually experienced financial loss) that they are entitled to; and

  • Industrial consumers of physical silver have been able to acquire significant quantities of physical silver at a fraction of the price which they would have paid in an unmanipulated market.

Market Price Dynamics

  • An observable abnormal gold-to-silver ratio (GSR) relative to the demand and supply dynamics of the physical market. As noted in my previous article “Physical Silver Represents Amazing Value”[11], the physical dynamics of the gold and silver market suggests that the GSR should be between 9:1 based on annual mining output or 2.78:1 based on the 2018 statistics from the World Gold Council and the Silver Institute relating to above-ground stockpiles.

Broader Economic Implications

  • maintaining confidence in the current fiat monetary system given that higher gold and silver prices tend to coincide with concerns relating to rising inflation, increased geo-political, economic and financial risks and concerns (including concerns relating to the purchasing power of currencies).

The Silver ‘Moon Shot’

Having established the case that market manipulation is occurring within the silver market, the natural follow-on question which flows from this is what happens if market manipulation were to cease occurring and what forces and factors may bring market manipulation to an end?

Multiple theories have been offered as to how market manipulation may end with the bulk of these theories surrounding:

  • the breaking or collapsing of the silver paper market at the main centralised exchanges of the COMEX and the LBMA[12];

  • the declared insolvency of a Globally Systemically Important Bank (G-SIB) who is involved in futures derivatives trading such JP Morgan Chase or Deutsche Bank; or

  • through an inadequate delivery of gold or silver (or default) from a major listed gold or silver EFTs such as GLD and SLV.

Having said this, those who claim that market manipulation will end also suggest that a once in a life time ‘moon shot’ or a spike in silver prices will occur once genuine price discovery based on physical demand and supply dynamics are allowed to re-enter the silver market.

How large is the ‘moon shot’ is a matter of debate among analysts with some suggesting that prices may rise to somewhere between $US 100 - $US 650 per ounce[13], although based on the analysis contained in this article above, the ‘moon shot’ could represent a return that is larger than 1,507%.

Nevertheless, what remains are multiple unanswered questions relating to:

  • will the manipulation end?

  • how will the manipulation end? and

  • when will the manipulation end?


The analysis outlined in this article provides substantial supportive weight to the allegations of severe price manipulation and suppression of the silver market. Market manipulation carries significant consequences to stakeholders within the silver market as well as to the broader economy.

While criminal charges have been brought against JP Morgan Chase for allegations of spoofing, this has not to date had any material impact on the international silver spot price.

How will market manipulation end and when remain unanswered questions, yet the fact that market manipulation is occurring bolsters the case for acquiring physical silver given the current global economic, financial market and banking context.

John Adams is the Chief Economist for As Good As Gold Australia

This article is the sole opinion of the author and does not constitute professional financial advice.


[1] The 1980 spike in silver prices coincides with the famous attempt by the Hunt Brothers to corner the silver market and the 1970s episode of stagflation. As noted in a 29 May 1981 report to the US Congress by the Commodity Futures Trading Commission (CFTC), several commodity trading exchanges including the COMEX took specific actions to limit the buying of futures contracts the Hunt Brothers and other entities who were cornering the silver market (One of these actions was the introduction of ‘Silver Rule 7’).

[2] Note that under various pre-Keynesian schools of economic thought, inflation is defined as the increase in the money supply as opposed to the contemporary Australian definition which is an increase in the Consumer Price Index as measured by the Australian Bureau of Statistics. For the purposes of this article, inflation is taken to mean an increase in the money supply.

[3] Given that physical silver has historically acted as money within economies and societies that have operated on a silver monetary standard, the per ounce price of silver should be calculated through dividing the quantity of money by the quantity of above-ground stockpile of physical silver.

[4] See footnote 1 above.

[5] See p66, Table V-1 of the CFTC report as mentioned in footnote 1. This estimate is based on the 1979 Handy and Harman world silver stock estimate.

[6] Data from the 2019 World Silver Survey published by the Silver Institute indicates that the above-ground tradeable supply of 0.999 fine physical silver is 2.5 billion ounces. See p37 of the following link:

[7] Note that a 2019 estimate for above-ground tradeable supply of 0.999 fine physical silver has yet to be produced by the Silver Institute.

[8] Note that these estimated prices would be higher if the above-ground physical silver stockpile for communist countries was incorporated into the 1979 Handy and Harman world silver stocks estimate.

[12] The breaking of the paper silver market was one of the arguments listed in my 2018 article: “Will Physical Silver Change Your Life”.

[13] See YouTube interview between Egon Von Greyez and Darryl and Brian Panes from As Good As Gold Australia at the following link:

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