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No one can ask why gold isn't keeping up with central bank balance sheets
8:20p ET Tuesday, August 30, 3016
Dear Friend of GATA and Gold:
A market note by two market analysts for Deutsche Bank, publicized Monday by a few news organizations, including Business Insider (see below), observed that gold's price ordinarily correlates with central bank balance sheets but that lately it has not been keeping up with the vast expansion of those balance sheets.
Unfortunately if predictably, the analysts don't inquire into the seeming breakdown of this correlation, perhaps because such inquiry might lead them to the largely surreptitious intervention in the gold market by central banks and particularly their underwriting the huge gold derivatives business, in which paper claims to gold that doesn't exist take the place of ownership of real metal.
That central bank activity remains a highly prohibited subject among mainstream market analysts and mainstream financial news organizations alike.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
* * *
Gold Is Doing Something It Has Done Only Twice in the Past Decade
By Akin Oyedele
Business Insider, New York
Monday, August 29, 2016
Gold may be worth more than what traders have decided is the spot price.
There's a correlation between gold price changes and the rate at which central banks bought assets to expand their balance sheets, according to Deutsche Bank's Michael Hsueh and Grant Sporre.
And the pace of balance-sheet expansion — by 300% since 2005, according to the analysts — indicates that gold could be worth more.
They wrote in a note on Friday:
"Let us be clear; we are not saying that gold will trade up to $1,700/oz in the near term, but when viewed against the aggregated balance sheet of the 'big four' global central banks (the Fed, European Central Bank, Bank of Japan, and People's Bank of China), the argument can be made if we view gold as a currency, the metal is worth closer to $1,700/oz versus the spot price $1,326/oz." ...
... For the remainder of the report:
http://www.businessinsider.com/gold-and-central-bank-balance-sheets-2016-8
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