When short term gold lease rate turned negative in the second part of 2011 (Chart 1), we started to see price manipulation in the gold market. Each time the gold lease rate started to spike downwards, we saw a big decline in the gold (GLD) (PHYS) and silver (SLV) (PSLV) price afterwards. Low gold lease rates mean that lenders want to lend out their gold at all prices. High gold lease rates mean just the opposite, you will have to find more profitable investments to put that leased gold into use.
Why did gold prices go down and how does this connect to central banks leasing gold? What are Eric Sprott, Mike Maloney and Reginald H. Howe's take on this?
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