Robert Lambourne: BIS gold market intervention increased by 17% in July

Section:

By Robert Lambourne
Wednesday, August 8, 2018

Use of gold swaps and gold derivatives by the Bank for International Settlements, the gold broker for most central banks, increased by about 17 percent in July, according to the bank's monthly report:

https://www.bis.org/banking/balsheet/statofacc180731.pdf

The bank's June report is here:

https://www.bis.org/banking/balsheet/statofacc180630.pdf

The BIS' July Statement of Account gives summary information on its use of gold swaps and gold-related derivatives in the month. The information is not sufficient to calculate a precise amount of gold-related derivatives, including swaps, but the bank's total estimated exposure as of July 31 was about 485 tonnes of gold versus about 413 tonnes as of June 30.

... Dispatch continues below ...


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That is an increase of about 72 tonnes or 17 percent.

The increase came as there increasingly appeared to be a correlation between the gold price and the valuation of the Chinese yuan, both of which fell substantially during the month.

The BIS refuses to explain what it is doing in the gold market and for whom, engendering suspicion that it is helping one or more of its members to manipulate the currency markets through deception.

To place the bank's use of gold swaps in context, its current exposure of 485 tonnes is higher than the gold reserves of all but 10 countries.

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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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