Markets have been manipulated to suppress the prices of gold and silver for over a decade ;

The gold markets
are selling the same bar of gold
to multiple buyers at the same time
because virtually none of the buyers
actually takes physical delivery
of the metal.

Instead, buyers have preferred
the "convenience" of taking a
few sheets of paper certificates
("paper gold") that can be
readily traded.

As a result, there can be
multiple paper claims on the
same physical bar of gold.

If and when buyers demand
to take actual possession of gold
rather than possession "paper gold,"
the physical/actual market for gold will
overwhelm the current fictional/paper
market; the supply of gold will be seen
to be a fraction of what's currently
reported; those who've been merrily
selling the same bar of gold to several
buyers will be jailed for fraud; and the
price and demand for actual, physical
gold will skyrocket
http://adask.wordpress.com/2010/05/10/gold%e2%80%99s-resurrection-as-money-2/

In a research note an analyst
for JPMorgan Securities Inc.,
John Bridges, more or less explains
why central banks hate gold -- for its
being a competitor with their
own forms of money.

The analyst, John Bridges, wrote:

"A German banker once told us
that gold normally trades like a
commodity.

However,
when investors lose confidence in
currencies, because the pool of gold
is so much smaller than the pool of
currencies, demand for gold can
effectively become unlimited.

We believe the European version
of 'QE' [quantitative easing] is
generating serious currency worries. ..."

That observation hints at why
Western central banks and the
International Monetary Fund backstop
the London Bullion Market Association
and the New York Commodities Exchange
in their sales of unlimited and largely
unbacked paper gold :

so that the world may be deceived
into thinking that the gold supply is a
lot larger than it is, so the world is
deprived of its traditional hedge against
monetary debasement, and so potentially
"unlimited" demand for gold can be met
with unlimited supply of imaginary gold,
thereby sustaining confidence in
government currencies and the
power of governments to inflate
and reap the profits and power
of the hidden tax of inflation
http://www.gata.org/node/8652