Behind the Shine: The Dark Empire of Gold & Silver Markets

Gold and silver have always been seen as the most trusted stores of value. For thousands of years, families across India and Asia have bought these metals not as speculative assets but as symbols of security, culture, and continuity. Yet in the modern financial world, these metals have been taken far from the mines of Africa or the bazaars of Delhi and placed under the absolute price control of two financial capitals—London and New York. The irony is striking: the regions that consume, mine, and love gold the most have almost zero control over its pricing, while regions that barely use or hold the metal dominate the markets through digital contracts and leveraged trading structures.

It is precisely this distance between consumption and price control that has allowed the gold and silver markets to evolve into one of the most sophisticated long-term wealth extraction systems ever created. London’s LBMA and New York’s COMEX, supported by institutions with immense liquidity and political influence, shape global metal prices not through ownership of metal but through ownership of the pricing mechanism itself. India buys the physical metal; the West sells the paper version of it.

The geography of control

India, China, Turkey, and the Middle East buy almost 70% of the world’s gold every year. China is the world’s largest producer. India is the largest importer. Asia holds the cultural and physical dominance. Yet the price is discovered thousands of miles away in trading rooms in London, where barely any metal is exchanged, and in New York, where most gold exists only as futures and derivatives. The central power of the system lies not in who owns metal but in who has the authority to determine its price. Because Asia loves physical gold, and the West loves financial products, the global structure naturally favors the side that plays with leverage, electronic contracts, and settlement mechanisms.

How paper gold defeated physical gold

In the COMEX and LBMA systems, for every one ounce of real gold available, there are often one hundred or more ounces sold via paper contracts. This allows institutions to influence prices without needing to own the underlying metal. It is the equivalent of selling one hundred houses when you own only one—and doing it legally because the rules allow it. Paper gold is infinite; physical gold is limited. The side with infinite ammunition will always control the battlefield. Asian buyers believe they are investing in a secure commodity, while institutions in the West are trading a mathematical product whose price can be shifted by algorithmic trades, leveraged short positions, sudden margin rule changes, and coordinated liquidity withdrawals.

The volatility Circus

Institutions do not need gold to rise or fall; they only need it to move. Volatility is the fuel of the machine. When retail sentiment becomes too bullish, institutions flood the market with paper shorts. When retail panics, they reverse positions and buy aggressively. When participation fades, prices are inflated to pull new investors back in, only to shake them out again with sharp reversals. Gold and silver become not stores of value but tools of cyclical price manipulation driven by leveraged contracts and automated trading systems. This strategy resembles the functioning of casinos, betting apps, and even global stock markets. The difference is that gold and silver enjoy deep cultural legitimacy, which keeps retail investors returning no matter how many times they are burned.

Why Asia is the perfect extraction target

Asia, especially India, provides the raw material that the global gold machine needs: constant, unconditional physical buying. Paper contracts can be created endlessly, but real metal must be bought by someone. That someone is India. Whenever Western markets artificially inflate prices through aggressive futures activity, Asian buyers absorb the metal at inflated levels, allowing institutions to unwind their hedges at a profit. When prices fall, Asian buyers hold the loss for years because gold is an emotional asset here—nobody sells easily. The West books profits; the East holds expensive metal. This cycle has repeated through every decade since the 1970s.

When & Why America stopped suppressing gold

For years, the US had an incentive to keep gold boring because high gold prices undermine confidence in the dollar. But after 2008, when trillions of dollars were printed to rescue financial markets, the old approach stopped working. A suppressed gold market would have distorted global liquidity. So the strategy changed: instead of suppressing gold, the US financial system decided to monetise it. Wall Street realised it could make far more money controlling volatility and flows than controlling the long-term price level. ETFs, futures, options, arbitrage desks—all became instruments to turn gold into a fast-moving financial product, not a boring alternative to the dollar. America no longer fears gold; America profits from trading gold.

The institutions that dominate the machine
JPMorgan Chase is widely known as the largest player in global bullion markets, repeatedly appearing in CFTC investigations and dominating futures positioning.
HSBC handles enormous unallocated gold accounts in London and sets daily benchmarks that influence global pricing.
Citigroup and Goldman Sachs run large precious metals trading desks that drive algorithmic and macro-hedging flows.
Bank of America participates aggressively in structured gold lending and derivatives exposure. These institutions are not running illegal operations; they are simply using the rules to their advantage by controlling leverage, margin, liquidity, and market-making functions. The power imbalance comes from the fact that an Indian family buying gold for a wedding cannot compete with a bank placing billion-dollar hedged positions in microseconds.

The psychology of the small trader

Despite decades of disappointment, retail buyers continue participating because gold is emotionally anchored in culture. Traders believe they are performing technical or fundamental analysis, but in reality most are seeking experts who confirm their biases. They want certainty in an uncertain world, and gold feels like certainty. Social media amplifies this cycle by constantly feeding narratives of shortages, breakouts, conspiracies, and dramatic price targets. Every time retail gains confidence, institutions use the opportunity to increase volatility and extract liquidity. The sharpest minds can get caught because the system plays not against their knowledge but against their instincts.

Silver: the perfect trap

Silver behaves like the younger, wilder cousin of gold. Its market is thinner, more volatile, and more prone to violent rallies followed by brutal collapses. Every few years silver rallies 30–60% in a short time, igniting retail fantasies of an explosive bull market. But these rallies are often built on thin liquidity, speculative positioning, and aggressive short-term leverage. The same institutions that pump momentum also crush it through sudden margin hikes and coordinated selling. Retail enters during euphoria and exits in despair. Silver thus becomes the most reliable extraction tool in the entire commodities complex because it guarantees repeated cycles of hope and destruction.

The government’s role: warning without effect

Indian governments have always advised citizens to reduce gold consumption. Their concern is simple: massive gold imports weaken the rupee, increase current account deficits, and channel household savings into a non-productive asset. But the public never listens. India trusts gold more than banks, more than policies, and certainly more than paper assets. And this cultural loyalty is what keeps the global machine well-fed. The government warns against excessive gold buying, yet the same system ensures that global price discovery is shaped outside India, making domestic policy influence almost meaningless. The contradiction is tragic but predictable: Indians buy gold for protection, but the pricing system they depend on is controlled by the very markets designed to exploit their demand.

The system is not illegal—just brilliantly engineered

The gold and silver markets are not scams. They are simply designed in a way that benefits those who trade with information, leverage, and speed over those who buy for emotion, culture, or long-term tradition. The real issue is not manipulation; it is structural superiority. Western institutions have built a machine that extracts wealth slowly and elegantly from regions where gold demand is strongest. Everything is legal. Everything is regulated. But the outcome is the same: price control without ownership, profit without risk, dominance without physical metal.

The long-term truth

Gold itself is not a bad asset. For long-term holders who treat it as a store of value and not a trading instrument, it remains one of the few physical assets that cannot be printed, inflated, or defaulted on. The United States no longer has the old incentive to suppress gold because the financial system now profits more from volatility than stability. In the long run, gold may even do well because global debt and geopolitical uncertainty leave little space for fiat currencies to remain unquestioned. But the real bleeding will always fall on traders, jewellers, and ultimately governments. Traders will lose to volatility, jewellers will lose to sudden price swings and import costs, and governments will lose foreign exchange, tax revenue, and economic efficiency. The system does not punish those who hold gold patiently; it punishes those who enter the arena of price discovery without understanding who truly controls it.

by: Rajan Veda