Gold prices are moderately lower and scored a nine-week low in early U.S. trading Friday, in the wake of a stronger-than-expected U.S. jobs report that was just issued. Also, a rallying U.S. dollar index that hit another 11.5-year high Friday remains a bearish “outside market” force working against gold and silver. April Comex gold was last down $10.40 at $1,185.70 an ounce. May Comex silver was last down $0.213 at $15.92 an ounce.

Gold futures rose past $1,170 an ounce in electronic trading today, extending gains from the regular trading session as the U.S. dollar took a hit in the wake of the Federal Reserve statement, which signalled that the central bank was ready to take modest steps toward rising rates.

After regular metals trading on Comex closed, a statement from the Fed showed that the central bank dropped the word “patient” from its guidance on interest rates but also scaled back expectations on how fast it will move, indicating the first rate hike might not take place until September.

Though the price of gold has seen a significant drop over the last two years from it’s all time highs of about $1900 per ounce, many experts and analysts believe that western central banks and their colleagues at major financial institutions have been manipulating the price. The rampant manipulation is believed to stem, in part, from the formerly Rothschild owned London Gold Fix, an organization made up of five large banks that make a daily determination of what the price of gold should be.

It is this unilateral control by western banks that recently prompted the Chinese to create their own Shanghai Gold Exchange. What separates the two is that the Chinese will be using their currency, the Yuan, as the reserve rather than the U.S. Dollar. Moreover, unlike their European counterparts, the Chinese will be trading in actual physical dollars.

It is this process by central banks in the west that will ultimately lead to the destruction of the paper gold market as it exists today.

The banks operating in these paper markets do so with gold that they don’t own. They trade in paper receipts. The reason that’s a problem is that there are anywhere from thirty to fifty “owners” for every ounce of gold out there.

Craig Hemke of the TF Metals Report discusses the western gold scheme in a recent interview with The Daily Coin and says that when the music finally stops there are going to be a lot of people who think they own a certain amount of gold but all they’ll really be holding is a worthless paper ticket:

The problem is easy to see. Should just two people show up claiming the same ounce of gold one of them is coming home empty handed.  What Craig Hemke describes is a scenario where as many as fifty different people are going to claim ownership for the same ounce of gold. The same is likely true for the silver market.

And now that the Chinese are dealing directly with physical gold it is only a matter of time before the entire scheme collapses. In fact, the Chinese and Russians know it’s coming and that’s why they’ve been furiously purchasing gold on the open market.

The solution should be obvious: If you invest in gold make sure you hold the physical asset in your hand.