The Sprott study's major conclusions:
--Central banks intervened surreptitiously in the gold market in the late 1990s to prevent a gold derivatives crisis that threatened the global financial system. This appears to have started around the time of the Long-Term Capital crisis and commenced in earnest after the post-Washington Agreement gold price explosion in 1999.
--At the root of this crisis was the speculative gold carry trade
. So much gold was borrowed from central banks at low interest rates and sold into the market that an uncoverable gold short position developed.
--Long-Term Capital Management was short approximately 300-400 tonnes of gold when it collapsed in 1998 and this position appears to have been assumed either by a counterparty bullion bank or a central bank.
--The Bank of England's well-publicized gold sales that began in 1999 were the result of a political decision designed to manage the price of gold.
--The U.S. Exchange Stabilization Fund (ESF)
and the Federal Reserve have been active in the scheme to depress gold prices. Information in the public domain suggests that such intervention started between 1994 and 1996. A 1995 Federal Open Market Committee transcript reveals that the ESF conducted multiple, undisclosed gold swaps. The unwillingness of the U.S. government to reveal the details of these transactions indicates that their purpose was nefarious.
--The gold market supply and demand model of GATA consultant Veneroso is far superior to the consensus supply estimates of GFMS Ltd.
--Central bank gold loans probably total far more than the consensus estimates of 4,000 tonnes - more likely 10,000-16,000 tonnes and as much as half the nominal gold reserves of central banks.
--International Monetary Fund accounting regulations have obscured central bank gold loans and make it impossible to discern exactly how much gold remains in central bank vaults.
--Gold industry executives are far more inclined to believe that the gold market is being manipulated than most market observers think.
--The gold price falls so much more often in the New York market than in other markets as to defy all probabilities.
--Most gold market statisticians have misinterpreted data on gold derivatives, and those derivatives have committed far more gold to the market than is generally acknowledged.
--Gold derivatives are increasing even as gold producers are reducing their forward sales, indicating that official-sector selling remains a major source of gold in the market and a restraint on the price.
--Central banks are manipulating the gold price because a rising price would expose their loose monetary policies.