It is important to the Federal Reserve’s low interest rate policy to suppress the bullion price. If the prices of gold and silver continue to rise relative to the US dollar, the Fed cannot keep the prices of bonds high and interest rates low. If the dollar is widely perceived to be declining in value in relation to gold, the price of dollar-denominated assets will also decline, including bonds. If the dollar loses value, the Fed loses control over interest rates, and the US financial bubble pops, with hell to pay.To forestall armageddon, the Fed and its dependent banks cap the price of gold.
This is from Paul Craig Roberts, former Assistant Secretary of the US Treasury and former associate editor of the Wall Street Journal at the lewrockwell.com