What Is The BIS And Why Does It Hate Gold?
September 18, 2017
Dennis Gartman is editor and publisher of The Gartman Letter, and strategic advisor of the AdvisorShares Gartman Currency Hedged Gold ETFs (GEUR & GYEN). He regularly contributes to AlphaBaskets and lends his institutional insight to educate advisors and investors about commodities and the forex markets, including about trading gold in different currency terms.
Regarding gold, Friday was again a day when the gold market bears ruled and they are continuing to put pressure upon prices Monday morning. We draw attention then to the chart of gold included this morning, paying heed to the trend line drawn. It is under assault and is indeed in danger of being broken to the downside. This will not negate the bull market that has been extant since late ’15, but it does put the market rather clearly upon the defensive.
Our friend, Mr. John Brimelow, has brought something to our attention this morning that we think worthy of note. John wrote earlier today that 3 GATA has produced another smoking gun: BIS gold swaps soar from zero to record high:
“Disclosures in the August statement of account published by the Bank for International Settlements indicate that during August the bank increased substantially its use of gold swaps.
An estimated 130 tonnes of new gold swaps were made last month, worth about $5.9 billion at the month-end gold price, and the total level of gold swaps at the end of August was close to 500 tonnes.
This is the BIS’ highest level of gold swaps recorded since the bank first reported the use of gold swaps in its annual report for the financial year ended March 31, 2010.
A review of the previous use of gold derivatives by the BIS reveals that the transactions in the year ending March 31, 2010, were far more substantial than anything done by the bank in the years immediately before.
The use of gold swaps reported by the BIS in recent times is summarized below:
March 2010: 346 tonnes; March 2011: 409 tonnes; March 2012: 355 tonnes; March 2013: 404 tonnes; March 2014: 236 tonnes; March 2015: 47 tonnes; March 2016: 0 tonnes; March 2017: 438 tonnes.
Gold’s friends are up against City Hall.
Our long standing readers/clients/friends know that we and GATA have often in the past been very much at odds; but for the moment we find this data very, very interesting. The BIS is trying… thus far vainly… to keep gold down. Do not underestimate their intentions.
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