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If bullion banks are trading for governments, their nominal cash losses don't matter
5:40p ET Friday, June 4, 2021
Dear Friend of GATA and Gold:
Alasdair Macleod's weekly gold market report for GoldMoney concludes today that the bullion banks are having trouble closing their short positions on the New York Commodities Exchange and that their attack on the metal this week did not help them much, since "managed money" traders did not substantially increase their long positions.
So the banks, Macleod writes, are "deepening their losses" in gold futures.
... Dispatch continues below ...
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Macleod adds: "This does not mean the attack on gold and silver will be over in a matter of days -- only that it is very unlikely to yield significant closure for the Swaps. Furthermore, it is worth noting that since last Thursday, 57.6 tonnes of gold and 377 tonnes of silver were stood for delivery on Comex."
Macleod's analysis is headlined "The Empire Strikes Back" and it's posted at GoldMoney here:
But what if the bullion banks whose Comex positions are studied by market analysts for clues to the direction of the gold price are trading not for their own accounts but for government or central bank accounts? In that case any losses, at least in terms of government-issued money alone, are of no concern, since governments and central banks can create money to infinity and indeed have been doing so lately.
In that case the only thing that matters is government's loss of enough of the metal it needs for market rigging.
After all, the manager of the Comex, CME Group, long has maintained its Central Bank Incentive Program, providing discounts to governments and central banks for surreptitious trading all contracts offered on CME Group exchanges:
https://www.gata.org/files/CMEGroup-CentralBankIncentiveProgram-Feb2019.pdf
The program requires these government and central bank trades to be cleared through a broker approved by the exchange. That provides camouflage for government and central bank trades and such trades are never announced or otherwise publicized. Mainstream financial news organizations never inquire about such trading, since market rigging by the U.S. government particularly, conducted by the Treasury Department's Exchange Stabilization Fund and fully authorized by the Gold Reserve Act of 1934, as amended --
https://home.treasury.gov/policy-issues/international/exchange-stabilization-fund
-- is considered a matter of national security, no matter how many millions of people it deceives and cheats.
In itself all this isn't exactly proof that the bullion banks carrying money-losing positions in gold futures are trading for the government. But that this is almost certainly happening is established by the repeated refusal of the U.S. Commodity Futures Trading Commission, the regulator of the Comex, to answer, even for a member of Congress, whether it has jurisdiction over manipulative trading undertaken by or at the behest of the U.S. government:
That's why the bank position reports to which gold and silver market analysts pay so much attention may not really mean much. Indeed, if governments are heavily trading a market, ordinary "technical analysis" by financial experts hardly means anything either, and those experts would be out of business if this was widely understood -- which is why so few of them address government intervention.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
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