Have Central Banks Really Become Net Sellers Of Gold?

Or are financial journalism and market analysis merely failing again?

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

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12:41p ET Tuesday, October 27, 2020

Dear Friend of GATA and Gold:

According to the old saying, sometimes attributed to Mark Twain, there are three kinds of lies: ordinary lies, damned lies, and statistics.

Of course not all statistics are lies, but statistics always need to be challenged when the entities issuing them have an interest in spinning them a certain way, as government almost always has such an interest.

So while it is understandable, given the slovenliness and corruption of mainstream financial news organizations and market analysts, it is still disappointing that central bank gold statistics are routinely accepted without question, even as it is the longstanding policy of the primary compiler of these statistics, the International Monetary Fund, to fudge the numbers.

That is, according to the March 1999 secret report of the IMF’s executive staff, the agency’s central banks are authorized to conflate gold in their vaults with gold they are lending. The acknowledged purpose of this fudging is to prevent the world from discerning just how much central banks are manipulating the gold and currency markets:

http://www.gata.org/node/12016

Lately there have been many reports asserting that central banks have become net sellers of gold after many years of being net purchasers. For example:

https://www.ft.com/content/09b0a30f-2997-4e8a-92bf-f9eb61952b92

https://seekingalpha.com/article/4381477-central-banks-become-net-seller…

https://www.miningweekly.com/article/central-banks-net-sellers-of-gold-o…

But as that IMF report suggests, central banks are never more misleading than they are with gold. Indeed, the location and disposition of national gold reserves are secrets more sensitive than the location and disposition of nuclear weapons. For nuclear weapons can only destroy the world while governments understand that control of gold is control of the valuation of all capital, labor, goods, and services — control of nearly everything:

http://www.gata.org/node/13310

While the recent news stories and market commentaries assert that central banks are now net sellers of gold, the authors of those stories and commentaries don’t really know that. They know only what central banks report doing. And of course nobody questions this, though throughout the years central banks have both sold or leased gold and acquired gold secretly. China has gone as long as five years acquiring gold without reporting the acquisitions to the IMF.

The gold data is especially ripe for questioning now in light of the assertion a few days ago by London metals trader Andrew Maguire that China has begun bypassing the London bullion market in its acquisition of gold and has begun acquiring unrefined gold directly from mines in Africa and South America:

http://www.gata.org/node/20606

Maguire identified no sources for his assertion, but any financial news organization that wanted to get serious with its reporting about gold and central banking could easily pursue the issue by inquiring with central bankers, gold traders, gold mining companies, and customs agencies. Of course few such sources might want to go on the record, but some might comment confidentially.

At least news organizations and market analysts could acknowledge that while government statistics may not always be damned lies, they also aren’t always necessarily the truth either, especially on a subject as sensitive as gold.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
[email protected]

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