In an interview, the mining and movie mogul revealed that gold prices have been "manipulated" for decades by central banks, in particular the US Federal Reserve, in order to maintain the dominance of the US dollar in the global monetary system.
“It's no secret that ever since the US abandoned the dollar's peg to gold in 1971, they have been trying to slow down the rise in the price of gold in order to maintain the superiority of the US dollar. This dominance is important for keeping interest rates low at home, important for curbing inflation expectations, important for a variety of reasons,” says Fiore Group CEO.
Due to the high "leverage" in the precious metals market, gold is very vulnerable to "spoofing" and other forms of trade manipulation, Giustra explained. He believes that the Federal Reserve System is one of the main players and organizers of major price manipulations in the precious metals market.
However, they cannot manipulate and lower the price of gold forever: “They cannot continue this game forever. There has never been a manipulation that lasted forever. At some point, everything comes out. Given the current relationship dynamics between the US, China, Russia and the rest of the world, I think we may see this opportunity sooner than expected." Giustra believes that China will introduce a central bank currency backed by gold, and then the manipulation should ease.
He also spoke about the possibility of major changes in the monetary system: “I suspect that there must be a reset of the global monetary system, which has already lost its balance. The US dollar is grossly overvalued relative to its trade deficit and I think this needs to be corrected. China and Russia are likely to join forces to devalue the dollar during this new global reset.”