Some Disturbing Revelations in the Gold Market ( is it being adversely manipulated?)

The price of Gold and Silver have simply been hammered over the past few weeks.  In fact some have mentioned that the drop in the yellow metal was the most this past October since 1983.  Now some fundamentals and events have definitely helped explain the dramatic price drop from its recent historic highs.  These include a considerable appreciation in the US$, precipitous fall in the price of Crude Oil, and expectations of a global economic slowdown.  However there still remain some positive factors that support the notion that Gold should be higher.

The positives include a growing pessimism in the value of major currencies in light of the recent injection of massive currency into the system to help prop up the banking system and general liquidity.  Additionally, there is the potential of significant inflation due to the weakening value of currencies.

Regardless of the above scenarios, there is a fundamental problem with the Gold and Silver markets.  That problem is that the cash market (e.g. price of Gold ounces) are much more expensive than what the paper market says.  In fact, it appears that the supply of cash (real gold) is becoming more scarce, which is driving the price up significantly.  So if the real cash market is in great demand, how can the paper market price keep going down? Something smells rotten here.