Gold prices are being kept artificially low by Western Central Banks and "no one alive" has ever seen the true price of gold, according to Chris Powell, Secretary of the Gold Anti-Trust Action Committee (GATA).
GATA, an organization co-founded by Powells in 1998, claims that central bankers have been manipulating markets for decades, by overstating the amount of gold they hold in reserves to give the impression that there's abundant supply of bullion in order to depress prices. It argues that central banks are trying to control the price of gold because of bullion's influence on financial instruments, including currencies, government bonds and interest rates.
According to World Gold Council (WGC), an industry body, official reserves of global central banks have grown to more than $12 trillion in 2012 from $2 trillion in 2000. But Powell argues that at least 70 percent to 75 percent of the gold central banks say they keep in reserves does not exist.
"There's a vast imaginary supply of gold that's been created by Western central banks," Powell told Squawk Box Asia on Thursday. "It is simply just a paper claim on metal that's not there."
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In response to a query from CNBC on GATA's views, the WGC said, "GATA has its own views on the factors driving the gold price and the influence of gold market participants. The World Gold Council respects the right of GATA to hold these views but does not share them."