Gold Prices Over 25 Years: Rise, Fall, Rise Again, and the Invisible Hands

Gold has always been a barometer of global economic confidence, swinging between a safe haven asset and a speculative instrument.

Over the last 25 years, its price trajectory has mirrored financial crises, central bank policies, geopolitical turmoil, and at times, outright manipulation by institutional players.

The gold market is a battlefield where governments, hedge funds, and bullion banks clash, often leaving retail investors puzzled.

1999-2011: The Great Bull Run

The late 1990s saw gold languishing below $300 per ounce, as central banks, particularly in Europe, were net sellers.

The Washington Agreement on Gold (1999) was meant to curb sales, yet gold remained under pressure.

However, as the dot-com bubble burst (2000) and 9/11 (2001) shook confidence in financial markets, gold began its steady ascent.

The real rally came post-2008 when the financial crisis shattered trust in fiat currencies. With the Federal Reserve and other central banks slashing interest rates and launching quantitative easing (QE), gold skyrocketed, peaking at over $1,900 in 2011.

The eurozone crisis (2010-2012) further fueled this rise as investors sought safety amid fears of sovereign defaults. During this period, many hedge funds and institutional investors entered the market, riding the wave of easy monetary policy and inflationary fears.

The Role of the World Gold Council

A key player behind gold's sustained price rise was the World Gold Council (WGC), a private body representing gold miners, which positioned itself as a public entity promoting gold.

The WGC conducted extensive research on how to drive gold prices higher and found that increasing gold’s appeal as an investment asset—beyond just jewelry—was the solution.

This led to the introduction of gold ETFs, which allowed institutional and retail investors to hold paper gold rather than physical bullion.

Simultaneously, the WGC played a major role in promoting gold demand in India, leveraging traditional small-scale gold-buying practices and transforming them into national-level events like Akshaya Tritiya.

These strategies ensured a consistent increase in gold demand, ultimately supporting higher prices.

2012-2015: The Crash and Exodus

Gold’s decline post-2011 was swift and brutal. As the Federal Reserve hinted at tapering QE (2013), the dollar strengthened, and gold tumbled below $1,200. Large funds exited, and the gold ETF market saw massive outflows.

It was no coincidence that during this time, central banks, particularly in the West, were regaining control over financial markets.

The advent of algorithmic trading further suppressed gold’s price, with sudden flash crashes occurring on thin liquidity.

China, however, saw the opportunity. The Shanghai Gold Exchange gained prominence, and the country ramped up gold imports and reserves. While Western investors were abandoning gold, the East was accumulating it, signaling a shift in power in the physical market.

2016-2020: The Rebound and a New Crisis

The Brexit referendum (2016) and Trump’s election (2016) reignited gold’s appeal. Political uncertainty, trade wars, and dovish Fed policies created a favorable environment. By mid-2019, gold had breached $1,500 again, and then COVID-19 struck.

The pandemic triggered unprecedented stimulus measures, sending gold to new highs above $2,000 in August 2020. While demand for physical gold surged, paper gold markets (futures, ETFs) saw wild speculation.

Here, manipulation became evident: massive short positions would appear in the COMEX market, dragging prices down despite strong fundamentals. This era saw many hedge funds and central banks discreetly re-entering the market, taking advantage of the chaos.

2021-Present: Manipulation, Geopolitics, and a New Era?

Post-pandemic, gold remained volatile. Rising interest rates and a strong dollar in 2022 pushed it below $1,700, but geopolitical tensions—Russia-Ukraine war, U.S.-China decoupling—kept demand alive. 2023-2024 saw a peculiar trend: central banks, especially from emerging economies, became net buyers while Western institutional players manipulated short-term price movements.

A notable pattern emerged: whenever gold seemed poised for a breakout, sudden large-scale futures selling would suppress it. This wasn’t retail action—it was strategic. The Trump tariff threats in 2024, for instance, provided hedge funds with the perfect opportunity to pump and dump gold, exploiting market fears for profit.

The Role of LBMA Market Makers and Hedge Funds

The London Bullion Market Association (LBMA) and its market makers play a central role in price setting. These institutions, along with major hedge funds, operate intricate arbitrage models across global exchanges. They take advantage of retail and industry participants between spot markets in Asia and futures markets in the West, ensuring control over liquidity and price movements.

Through these mechanisms, gold's price is often dictated not by fundamental supply and demand but by financial engineering. The growing disconnect between physical and paper gold markets raises concerns about true price discovery.

The Internet Revolution: CFDs, Online Platforms, and Retail Speculation

The advent of online trading platforms, CFDs (Contracts for Difference), and spot gold trading on a global scale has significantly increased market depth, liquidity, and volatility.

Retail traders, often with limited access to institutional data, have poured into the market, amplifying short-term price swings. While this has increased participation, it has also led to high losses among uninformed traders who lack access to timely information such as the Commitment of Traders (COT) report, which is often delayed and does not fully capture real-time positioning.

JP Morgan and Silver Manipulation

JP Morgan has long been accused of manipulating the silver market, consistently holding large concentrated short positions in COMEX silver futures. Several lawsuits and regulatory investigations have pointed to spoofing and price suppression tactics. Despite penalties, JP Morgan remains a dominant force in the silver trade, ensuring prices remain under control.

Goldman Sachs and Gold Market Influence

Goldman Sachs has played a crucial role in the gold market, often using its privileged access to market intelligence to front-run trades. The bank's analysts frequently issue bullish or bearish calls that influence investor sentiment, only to take the opposite side of the trade once markets react.

Rothschild’s Exit from LBMA in 2004

In 2004, Rothschild unexpectedly withdrew from the LBMA, signaling a shift in power in the gold market. Speculation suggests they exited because price discovery was moving away from London to New York and Shanghai, reducing their influence over the gold fixing process . What is the real story?

Warren Buffett and Silver ETF Holders

In the late 1990s, Warren Buffett accumulated a massive silver position, only to see his holdings later absorbed into silver ETFs. It is widely believed that the introduction of silver ETFs provided an avenue for institutional players to control silver prices while keeping physical silver out of public circulation.

Now, as inflation remains sticky and the global financial system faces structural challenges, gold is back above $2,000. But the question remains—who truly controls its price? The paper gold market is a game of leverage and perception, but the physical market, driven by central banks and Eastern accumulation, might soon dictate real value.

Gold’s future will depend on whether it remains a tool for financial engineering or finally transitions into a true monetary asset outside Western manipulation. Either way, the past 25 years have shown that gold’s real value is not just in price—it’s in power.

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