BIS’ Activity In Gold Market Continues To Diminish

Recent activity in the gold market is much reduced…

by Chris Powell of the Gold Anti-Trust Action Committee (GATA)

Robert Lambourne: BIS’ activity in gold market continues to diminish

By Robert Lambourne

The statement of account for May 2019 of the Bank for International Settlements, published this week, indicates that the bank is still trading gold swaps, which the bank uses to gain access to gold held by commercial banks. But the statement indicates that bank’s recent activity in the gold market is much reduced from its activity during the second half of 2018.

There is not enough information in the monthly reports to calculate the exact amount of swaps, but based on the information in the bank’s just-published statement of account, the bank’s gold swaps are estimated to be 78 tonnes as of May 31, compared to 88 tonnes at April 30, 177 tonnes at March 31, 303 tonnes at February 28, 247 tonnes at January 31, 2019, 275 tonnes at December 31, 2018, and 308 tonnes in November, 372 tonnes in October, 238 tonnes in September, and 370 tonnes in August 2018.

The statement of account for May 2019 of the Bank for International Settlements, published this week, indicates that the bank is still trading gold swaps, which the bank uses to gain access to gold held by commercial banks. But the statement indicates that bank’s recent activity in the gold market is much reduced from its activity during the second half of 2018.

There is not enough information in the monthly reports to calculate the exact amount of swaps, but based on the information in the bank’s just-published statement of account, the bank’s gold swaps are estimated to be 78 tonnes as of May 31, compared to 88 tonnes at April 30, 177 tonnes at March 31, 303 tonnes at February 28, 247 tonnes at January 31, 2019, 275 tonnes at December 31, 2018, and 308 tonnes in November, 372 tonnes in October, 238 tonnes in September, and 370 tonnes in August 2018.

More background on the bank’s medium-term history of using gold swaps is available here:

http://www.gata.org/node/18825

On February 3 this year GATA published comments from a former gold industry executive describing the activities of the BIS in gold swaps in earlier decades:

http://www.gata.org/node/18828

The former executive wrote: “Effectively this process created a supply of ‘paper gold’ — sometimes but not always marked to market — that had a depressing effect on the gold price.”

The BIS refuses to explain its activity in the gold market — its objectives and underlying parties in interest —

http://www.gata.org/node/17793

— and mainstream financial news organizations refuse to ask about it.

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Robert Lambourne is a retired business executive in the United Kingdom who consults with GATA about the involvement of the Bank for International Settlements in the gold market.

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