Is Gold and the U.S. Dollar Being Manipulated ?

With the increased volatility in the Gold Markets in the last few weeks, there has been some talk in financial circles that Gold and the Dollar are being manipulated . I think that markets have definitely been manipulated at certain times to avoid complete meltdowns in the system ( ex: the PPT that was put together after the ‘87 crash); however, in the case of Gold or the U.S. Dollar currently, I don’t believe there is any manipulation in the these markets.

Gold basically bottomed in 2001 at roughly $280oz.( shortly before the U.S. Dollar topped out in January, 2002) It has enjoyed an almost uninterrupted bull run for the last 7 years that was spawned by a historically low federal funds rates . These low interest rates slowly ignited inflation and the general bull run in commodities. The Fed has signaled to the markets that they are no longer going to pour gasoline on a “raging commodities fire” by continually cutting rates.  Also, recent economic news out of the Euro zone hasn’t exactly been rosy.

Remember, historically, bull markets start when no one is expecting them at all - and clearly most of the  world is short the Dollar.( and correctly so, for a long time) Gold is also way overdue for a meaningful correction/fibonacci retracement after rising nearly four fold. The jury is still out if this is the beginning of a cyclical bull market within a continued secular bear market for the Dollar. I suspect as long as we continue to have naysayers and extremely negative sentiment, the Dollar may continue an upward trend at least for the intermediate term.