2:37p ET Wednesday, October 8, 2025
Dear Friend of GATA and Gold:
For a few weeks now mainstream financial news organizations and commentators have been casting around for explanations for the extraordinary rise in gold prices and, to a lesser extent, silver prices this year. The consensus is that it is all a matter of geopolitical tensions, excessive government debt and money creation, the disruption and chaos of a second Trump administration, and central bank purchases.
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All this analysis leaves out something potentially much more compelling: the huge naked short position in gold long undertaken by the United States and United Kingdom governments in the implementation of gold and interest-rate suppression policy.
Of course geopolitical tensions, excessive government debt, and Trumpian disruption may have sparked central bank and some investor demand for gold, but as Federal Reserve Chairman Alan Greenspan testified to Congress in 1998, no "private counterparties" could ever corner the gold market as long as "central banks stand ready to lease gold in increasing quantities should the price rise":
https://www.federalreserve.gov/boarddocs/testimony/1998/19980724.htm [2]
So are central banks no longer ready to lease gold in increasing quantities against a rising price? Indeed, have most of the central banks that were participating in gold price suppression policy dating back to the London Gold Pool of the 1960s --
https://en.wikipedia.org/wiki/London_Gold_Pool [3]
-- withdrawn from gold price suppression because, as with the gold pool, they have run out of gold they are willing to risk losing?
Can the gold short derivative positions engineered by the U.S. and U.K. governments -- like gold leasing -- no longer be covered because there simply isn't enough gold available to those governments anymore?
The abrupt disappearance of the Fort Knox gold audit issue last March, just a few weeks after President Trump and Elon Musk were demanding such an audit, implied a belated realization that a serious audit would reveal surreptitious intervention in the gold market by the U.S. government through leases, swaps, and other mechanisms and would reveal that the U.S. gold reserve had been impaired.
Back in 2009 a member of the Federal Reserve's Board of Governors admitted to GATA that the Fed had gold swap arrangements with foreign banks and insisted on keeping them secret:
https://www.gata.org/node/7819 [4]
In 2012 GATA published the secret March 1999 report of the staff of the International Monetary Fund, which disclosed that central banks, in their gold reserve data, were refusing to distinguish between unimpaired gold and leased gold because such information would compromise their surreptitious interventions in the gold and currency markets:
https://www.gata.org/node/12016 [5]
Noting the sudden disappearance of the Fort Knox gold audit issue, Gold Newsletter's Brien Lundin speculated two weeks ago that maybe the increasingly frantic recent buying of physical gold was a matter of the U.S. government's trying to get its gold back:
https://www.gata.org/node/24135 [6]
Yesterday GATA's consultant on the Bank for International Settlements, the indispensable Robert Lambourne, noted that the annual report of the British government's Exchange Equalization Account, which includes the U.K.'s gold reserves, is two months late, that no clear explanation is being offered, and that earlier this year the Bank of England delayed delivery of custodial gold for weeks, pleading logistical problems in the bank's basement:
https://www.gata.org/node/24155 [7]
Has the Bank of England been putting custodial gold in play for price-control purposes and has it too been striving to recover it?
London metals trader Andrew Maguire told Kinesis Money's "Live from the Vault" program last week that the Federal Reserve is now the only central bank running a short position in gold and seems able to manage it only by covering at higher prices, not by delivering metal:
https://www.gata.org/node/24148 [8]
GATA's friend the Canadian market analyst and financial letter writer Michael Ballanger writes today that gold, as measured by the exchange-traded fund GLD, has been technically overbought for six weeks, the longest overbought stretch ever, which ordinarily would foreshadow a serious "correction." Ballanger writes, "While we can all listen to Peter Schiff and Rick Rule and the other slurry of gold gurus all telling us that 'it's different this time,' I will tell you that it is never 'different this time.'"
Indeed, ordinarily when a market gets as one-sided as gold seems today, a reversal is inevitable. Hope, as the saying goes, is not an investment strategy.
Even so, anyone who has observed and publicized government's corruption, deceit, venality, and arrogance with gold for as long as GATA has can't help but wonder whether gold is not as much overbought for six weeks as it is catastrophically oversold for six decades.
What if it is that oversold? And what if mainstream financial news organizations ever attempted actual journalism about gold and put a few critical questions to the Federal Reserve, the U.S. Treasury Department, the U.K. Treasury, and the Bank of England?
Unfortunately actual journalism about gold may be the biggest "hope trade" of all.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org [9]
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