Oh Really? LBMA To Reveal Size Of London’s Gold Market On November 20th
The LBMA has an initiative to make the gold market more “transparent”. Thanks, but this is too little, too late. We know how the gold silver markets work.
Here’s what the LBMA says they will do to accomplish this transparency…
From Reuters we learn we are about to get the “most accurate picture yet” on London’s gold market (bold added for emphasis):
The London Bullion Market Association (LBMA) will begin publishing data on November 20 that will provide the most accurate picture yet of the size of London’s gold trade, its chief executive said on Monday.
London is the world’s largest gold market but because most transactions are done bilaterally between banks, brokers and traders reluctant to reveal their activity, its true size remains a mystery.
The closest approximation is clearing data which suggest gold worth around $25 billion changes hands each day, but this data contains only transactions which reach settlement in London.
Let’s explore that a little further.
According to David Jensen’s research, in the 2011 liquidity survey, only 64% of traders even reported:
In 2011 Liquidity Survey, LBMA est’d for 1st time it’s daily volume of ‘gold’ trading @ ~ 10x daily net-settled amount.
Shocked the mkt. – but only 64% of its traders reported.
After 31 yrs, LBMA now to disclose its primarily unbacked #gold trade vol.https://t.co/RP0YWVIlW2
— David Jensen (@RealDavidJensen) October 29, 2018
Although even when they came clean they understated the level of London gold trading which is > $50T per year using the volume @ 10x daily net-settled estimate provided by the LBMA.#gold #LBMA
— David Jensen (@RealDavidJensen) October 30, 2018
More from the recent Reuters article regarding the coming November 20, 2018 LBMA transparency initiative.
The initiative is part of a push to make the gold market more transparent after accusations of price manipulation by banks and traders and pressure from regulators.
There are so many ways we can take this article with that sentence, but let’s just take it old-school with the late Adrian Douglas as he described the LBMA in 2010 at a CFTC hearing on precious metal price discovery.
Adrian Douglas’ posthumous March 2010,
on #LBMA at a #CFTC hearing on precious
metal price discoveryThen CFTC chairman #GaryGensler
and others snickeredBoth #Gold #Silver prices
rocketed shortly thereafter
into 2011LBMA leverage on Nov 20, 2018 ? https://t.co/sKytimhldg pic.twitter.com/6URUxXBuCR
— James Henry Anderson (@jameshenryand) October 30, 2018
Just two summers ago the LBMA’s CEO described their market as being potentially ‘shark’ infested ink colored water.
Who doesn’t want to swim in that kind of market, right?
#LBMA CEO
on now reporting fractional reserved #Gold #Silver #Bullion
underlying their shark infested trading and ‘price discovery’ waters. pic.twitter.com/FFB6ABJmec— James Henry Anderson (@jameshenryand) August 1, 2017
So the LBMA is just going to start coming clean with fully disclosed data after all of these years?
Sure they are…
Bloomberg already blurted a bit on
derivative leverage required in 2014Others also studied the price discovery hole,
most concluded similar thingsPrices for #Gold #Silver day to day have
been based on severe leverage
only a fraction of the real thingshttps://t.co/oAFQksIzAa pic.twitter.com/Ew3M1cz4KC— James Henry Anderson (@jameshenryand) October 30, 2018
For a deep 20 minute dive on unallocated LBMA gold derivatives and other undeliverable gold ETF stooges who pay large annual fees to own them.
Have a listen to Ronan Manly as he picks apart some of the sordid over-leveraged LBMA gold market facts in fine detail.
In short, stick with bullion, avoid the derivatives.
The Hunt Brothers would likely suggest the same, having learned the hard way that leveraged derivative casinos (e.g. COMEX) can and do change their rules, overnight.
