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This week, the World Gold Council (WGC), which is a gold market development organization representing 32 of the world’s gold mining companies, published the latest quarterly edition of it’s well-known “Gold Demand Trends” research publication.

In the latest edition, which is titled “Gold Demand Trends Q3 2022”, the World Gold Council claims that during Q3 2022, “central banks continued to accumulate gold, with purchases estimated at a quarterly record of nearly 400 tonnes.”

And for my Next Trick

According to the WGC:

“Global central bank purchases leapt to almost 400 tonnes in Q3 (+115% q-o-q). This is the largest single quarter of demand from this sector in our records back to 2000 and almost double the previous record of 241t in Q3 2018.

It also marks the eighth consecutive quarter of net purchases and lifts the y-t-d total to 673 tonnes, higher than any other full year total since 1967.”

Specifically, the World Gold Council claims that Q3 2022 central bank gold demand was 399.3 tonnes, which is a massive 340% higher than Q3 2021.

**The infamous 399.3 tonnes of gold in question – Source WGC GDT Q3 2022**

Sounding impressive enough, the world’s financial media not surprisingly ran with the soundbite, publishing articles with headlines such as “Record central bank buying lifts global gold demand, WGC says” and “Central bank gold purchases set an all-time high” and “Central banks are buying gold at the fastest pace in 55 years”.

Until that is, you read a bit further and see that the World Gold Council added a caveat for Q 3 2022 central bank gold demand, saying that for “Q3 net demand includes a substantial estimate for unreported purchases”.

**Rabbit out of a Hat – Central bank gold demand data?**

Wait, what was that? The Q3 gold buying from central banks includes “a substantial estimate for unreported purchases”?…

…click on the above link to read the rest…

Russian Ruble relaunched linked to Gold and Commodities – RT.com Q and A

April 3, 2022

Russian Ruble relaunched linked to Gold and Commodities – RT.com Q and A

With Russia’s central bank having just profoundly altered the international trade and monetary system by linking the Russian ruble to both gold and commodities, the journalists at RT.com in Moscow asked me to write a Q and A article on what these developments mean, and the ramifications of these changes on the Russian ruble, the US dollar, the gold price and the global system of currencies. This article has been published on the RT.com website here.

Regular readers will recall that I have contributed to quite a few RT.com articles before, such as about Australian gold (see BullionStar here), US Treasury gold (see BullionStar here), Poland’s gold (see RT site here), China’s gold (see RT’s Spanish site here), why buy physical gold (see RT site here), and gold price manipulation (see RT site here).

However, since RT.com is now blocked and censored in many Western locations such as the EU, UK, US and Canada, and since many readers may not be able to access the RT.com website (unless using a VPN), my Questions and Answers that are in the new RT.com article are now published here in their entirety.

Who would have thought that citizens of ‘free speech’ Western countries would need a VPN to read a Russian news site?

Why is setting a Fixed Price for Gold in Rubles significant?

By offering to buy gold from Russian banks at a fixed price of 5000 rubles per gram, the Bank of Russia has both linked the ruble to gold and, since gold trades in US dollars, set a floor price for the ruble in terms of the US dollar.

…click on the above link to read the rest of the article…

Irish central bank raises gold reserves by 33%, worried by inflation

December 8, 2021

Irish central bank raises gold reserves by 33%, worried by inflation

Recently the Central Bank of Ireland joined the ranks of sovereign gold buyers, adding 2 tonnes of gold to its monetary gold reserves in 2 months, consisting of a tonne of gold bought in each of September and October 2021.

While in relative terms, the actual quantity of gold added by the Irish central bank was quite small, in percentage terms it was very substantial, since in August Ireland only held 6 tonnes of gold (supposedly held at the Bank of England), and as of the end of October Ireland now holds 8 tonnes of gold, i.e. a 33% increase (and a significant number for those in the know).

These latest monetary gold purchases by Ireland’s central bank are also notable because it’s not often that a central bank that is a) a Western European country, b) a Euro member country, and c) an OECD member country, buys monetary gold. In this instance, Ireland ticks the boxes on all three.

For example, during October 2021, while three of the four largest sovereign buyers of gold in the world were the notable gold aficionados namely Kazakhstan (6 tonnes), India (3.8 tonnes), and Russia (3 tonnes), the fourth, was Ireland (1 tonne), not what you would expect.

**Central Bank of Ireland’s gold reserves rose by 33% over September and October 2021**

What sparked the Central Bank of Ireland to add to its monetary gold reserves is unclear, because like all Euro puppet central banks and BIS lackeys, the Irish central bank thinks that it does not need to be democratically accountable when it comes to monetary gold.

On a Need to Know Basis – And you don’t need to know!

…click on the above link to read the rest of the article…

LBMA misleads Silver Market with False Claims about Record Silver Stocks

May 12, 2021

LBMA misleads Silver Market with False Claims about Record Silver Stocks

In a shocking retraction, the bullion bank dominated London Bullion Market Association (LBMA) has just announced that it has been overstating LBMA silver vault holdings by a massive 3,300 tonnes of silver.

This overstatement relates to the total quantity of physical silver bars that the LBMA claimed were being held in LBMA vaults in London as of end of March 2021.

These LBMA vaults in London are operated by three banks, namely the infamous JP Morgan, the equally infamous HSBC, and the maybe not so infamous ICBC Standard Bank, and three security vaulters, Brinks, Malca Amit and Loomis.

On 9 April, to much fanfare, the LBMA published updated monthly vault data for London vaulted silver bars, claiming that as of end of March 2021, total silver held in LBMA London vaults had risen by a whopping 11.04% during March from 1.125 billion ozs (34,996 tonnes) to 1.249 billion ozs (38,859 tonnes), i.e. an increase of 124 million ozs or 3863 tonnes.

LBMA even claimed that this surge in silver holdings meant that there were record stocks of silver in London, titling it’s press release, ‘Record Stocks of Silver in London Vaults – End March 2021’:

“As at end March 2021, there was a record stock of silver held in London vaults. In total there was 38,859 tonnes of silver, representing an 11% increase on the previous month, valued at $30 billion which equates to approximately 1,259,310 silver bars.”

This, it turns out, was not true.

However, for an entire month the LBMA let this fiction persist, before deciding to change its claim on 10 May when it released a statement saying that:

“A data submission error led to the publication of an incorrect aggregate figure for the total silver held in London vaults in March. The corrected figure is 1,143,194 Troy ounces (‘000s).“

…click on the above link to read the rest of the article…

Bullion Bank Nightmare as LBMA-COMEX Spread Blows Up Again

April 11, 2020

Bullion Bank Nightmare as LBMA-COMEX Spread Blows Up Again

The gaping price differential between spot gold and gold futures that has been plaguing the paper gold markets in London and New York for the last three weeks shows no signs of abating and is continuing to flare up.

In essence, the contango phenomenon we are seeing is one of gold futures prices trading far above spot gold prices, a sign of liquidity problems in the London gold market and a signal that something is completely broken between the world‘s two predominant “gold price discovery” trading venues – which both, by the way, trade paper gold.

As a reminder, London LBMA trades unallocated gold over the counter (OTC), a form of synthetic fractional gold derivative. The vast quantities of unallocated gold which are traded in London are then netted and cleared in an electronic clearing engine called Aurum by 5 LBMA bullion banks that comprices London Precious Metals Clearing Limited (LPMCL), namely JP Morgan, HSBC, UBS, Scotia, and ICBC Standard Bank). Allocation of physical gold is a totally separate process beyond clearing in Aurum.

COMEX trades predominantly cash-settled gold futures contracts on exchange and facilitates the trading of these contracts bilaterally. COMEX futures are 99.9% cash-settled and even those that result in delivery really result in warehouse warrants changing hands but the gold staying in the New York vaults of JP Morgan, HSBC and Scotia.

That the wide-open spread continues to persist is even more remarkable, despite the best efforts of the London Bullion Market Association (LBMA), CME Group (operator of COMEX) and the powerful London-New York bullion bank syndicate to throw all they have at the problem.

…click on the above link to read the rest of the article…

“Panic Stations”: What Are The LBMA And COMEX Trying To Hide?

April 3, 2020

“Panic Stations”: What Are The LBMA And COMEX Trying To Hide?

Between 1962 and 1968, a cartel of central banks from the US and Europe ran a price manipulation scheme in London, aiming to keep the price of gold at $35 per ounce. They did this by constant intervention into the market, pooling their gold reserves to sell down the market. Conceived and coordinated at the Bank for International Settlements (BIS) in Switzerland by the G10 central bank governors, the dirty work of actual gold market intervention was done by the Pool’s agent, the Bank of England gold trading desk in London.

The syndicate, known as the London Gold Pool was successful until it wasn’t, with the beginning of the end in early March 1968 as the huge run on gold became a tidal wave with sterling and US dollar weakness. On 10 March 1968, a Sunday, the consortium released a statement claiming that: “the London Gold Pool reaffirm their determination to support the pool at a fixed price of $35 per ounce”. At the same time, Fed chairman William McChesney Martin even vowed that the US would defend the Pool “to the last ingot”.

The Pool then proceeded to airlift hundreds of tonnes of gold bars from the US Treasury’s Fort Knox to RAF Mildenhall, which they dumped into the London market for the rest of the week (March 11 -14). With all the Good Delivery Gold siphoned off to the Market (actually a consortium of European merchant banks), the Rothschild and the Bank of England pulled the plug, and the London Gold Pool collapsed on the evening of 14 March 1968, ushering in an era of free market gold prices.

…click on the above link to read the rest of the article…

COMEX can’t find a 400 oz bar for its new 400 oz gold futures contract

March 31, 2020

COMEX can’t find a 400 oz bar for its new 400 oz gold futures contract

Update 31 March

After this article was published early morning March 31, New York Time (NYT), the CME has now completely removed the 400 oz gold bar category from its COMEX daily gold inventory report dated March 30, and reissued it without the new category. CME / COMEX censorship.

See original file – COMEX Gold_Stocks March 30 (for activity March 27)

And new CME censored version – COMEX Gold_Stocks March 31 -censored – (for activity March 27)

Introduction

With continuing problems besieging the tag team COMEX – LBMA paper gold markets where the front month gold futures contract (now June) continues to trade above the London spot price of price, the contango that emerged a week ago between the New York – London ‘gold price discovery’ duopoly shows no sign of abating.

NYLON (New York and London)

While the pricing suggests that the core ailment relates to bullion bank liquidity problemsfaced by market makers in the London ‘gold’ market, this didn’t stop the London Bullion Market Association (LBMA) rushing out a statement last Tuesday, March 24, in an attempt to shift focus to CME’s COMEX, saying that:

“The London gold market continues to be open for business. There has, however, been some impact on liquidity arising from price volatility in Comex 100oz futures contracts. LBMA has offered its support to CME Group to facilitate physical delivery in New York and is working closely with COMEX and other key stakeholders to ensure the efficient running of the global gold market.”

Notwithstanding that on Tuesday 23 March, the London market had seen gold bid-ask spot spreads blowing out to US$ 100 and LBMA market makers breaching their responsibility to actively provide two-way price quotations, the LBMA forged ahead with pinning the blame on COMEX, and bizarrely offered to support COMEX to ‘facilitate physical delivery in New York’.

…click on the above link to read the rest of the article…

German Government Escalates its War on Gold

January 15, 2020

German Government Escalates its War on Gold

In the run up to the end of the year during December, a remarkable sight emerged across Germany – long lines of customers queuing up outside the country’s precious metals shops and gold dealer showrooms.

Was it seasonal gift buying by Germany’s citizens, a population well-known for its love of physical precious metals? Or perhaps the onset of panic about negative interest rates in Europe’s largest economy?

As it turns out, panic it was, but of a different type, with the long lines triggered by the realization that from 1 January 2020, new national legislation was to take effect that would dramatically reduce the threshold on anonymous buying of precious metals from the existing €10,000 limit to a far lower limit of €2000, all under the guise of money laundering prevention.

With a staggering 9,000 tonnes of gold held by the German population, 55% of which is in the form of physical gold bars and gold coins and the rest in gold jewelry, Germany’s citizens are savvy about gold and are active savers and investors in the yellow precious metal. Add to this the fact that the German bullion market is one of the most sophisticated and developed in the world, supporting an extensive set of industry participants from banks and gold refineries, to nationwide gold dealers and distributors, to smaller regional and local bullion retailers.

Panic buying – We are being overrun

So when the German government throws up restrictions on such a fundamental right as anonymous buying of gold and other precious metals, Germany’s citizens were going to sit up and take notice and do what any rationale economic actor would do in the circumstances – buy as much gold as they can get their hands on before the 1 January deadline. Hence the queues and long lines outside the gold shops including some of Germany’s biggest gold dealers such as Degussa and Pro Aurum.

…click on the above link to read the rest of the article…

Quantum leap for banks as ABN AMRO questions gold price discovery

December 15, 2019

Quantum leap for banks as ABN AMRO questions gold price discovery

Earlier this week, an interesting article appeared on the website of the major Dutch bank ABN Amro, written by the bank’s currency and precious metals strategist, Georgette Boele.

The article, titled “A world with two gold prices?”, questions how, if gold is a safe haven asset, its price has not continued to reflect the ongoing crisis and stress in financial markets.

Boele then seeks an explanation of this puzzle in terms of a framework which consists of both safe haven gold demand and speculative gold demand, one of which reflects the purchase of physical gold (safe haven demand), and the other which speculates on the gold price via paper and synthetic gold products (speculative demand) which are not physically backed by gold.

This leads her to the observation that safe haven investors would not sell their physical gold in the midst of a crisis, as they “would think three times before parting ways with their gold”, and that it is speculative investors (those who are not invested in real physical gold) who are pushing the gold price around.

**ABN AMRO Amsterdam – Enlightened about the gold price?**

One Small Step

While the ABN AMRO strategist fails to address the reality of how the international gold price is really established, i.e. via gigantic trading volumes of fractional-reserve London unallocated gold and COMEX gold derivatives, she does take a quantum leap, at least for a prominent investment bank, when the penny drops that there are two separate things being traded. Finite tangible physical gold on the one hand, and paper gold synthetics on the other. Shouldn’t these two things have distinct prices? Boele then makes the jump:

“Let’s now go a step further. Suppose there are two gold prices: one for physical gold and one for all other non-physical gold products. How would these two gold prices behave?”

…click on the above link to read the rest of the article…

New COMEX Pledged Gold – Shrinking the Pool of Registered Inventory

November 14, 2019

New COMEX Pledged Gold – Shrinking the Pool of Registered Inventory

For those who have at times struggled to understand the difference between COMEX inventory categories ‘registered gold’ and ‘eligible gold’, now your head can spin even more, since the CME’s COMEX has just introduced a new category – ‘pledged gold’.

This pledged category was first noticed on the infamous COMEX warehouse gold stocks report late last week by Nick Laird of GoldChartsRUsfame, with the pledged gold column intriguingly populated with an entry next to the New York vault of bullion bank, HSBC. What did this pledged column entry mean, we wondered, and where did it come from?

After some digging on the CME website, the answer was revealed. Pledged is a new gold inventory category representing COMEX gold warrants which have been deposited with CME Clearing as performance bond collateral, in other words margin collateral. CME defines performance bonds as follows:

“Performance Bonds, also known as margins, are deposits held at CME Clearing to ensure that clearing members can meet their obligations to their customers and to CME Clearing.”

Before looking at how this relates to COMEX gold, a quick recap and some definitions are in order. Although COMEX gold futures rarely settle physically in gold, they are physically deliverable contracts which are capable of being settled in real gold. believe it or not. However in 2018, for example, COMEX gold deliveries totalled just 1.6 million ounces (51 tonnes), meaning that 99.98% of COMEX gold futures did not result in physical delivery, a Ponzi scheme if ever there was one.

But since 0.02% of COMEX gold futures do physically settle, at least by some shuffling of warrants between bullion banks, the CME has therefore approved the vaulting facilities operated by nine vault providers in and around New York City and Delaware, which it refers to as depositories or approved warehouses, which can store gold that can be used for contract settlement.

…click on the above link to read the rest of the article…

The only gold the US shows – A working vault at West Point

May 12, 2019

The only gold the US shows – A working vault at West Point

Every so often, US media coverage provides glimpses into the US Treasury’s gold reserves stored with the US Mint. While this coverage never documents any of the claimed “deep storage” gold of the US Treasury, it contains just enough suggestion for the populace to connect the words ‘gold storage’ and ‘US Government’, and then return to their daily routines, assuming that the US has the largest strategic gold reserves in the world.

Notably, these media features, which span mainstream financial media and coin / numismatic news sites alike, are also only ever limited to one single location where the US Mint stores gold, a ‘working vault’ at the US Mint’s facility in West Point, New York. Images of this vault will be familiar to some readers, images which contain various pallets of 400 oz gold bars in front of a US flag and the walls of the storage room strewn with many years of scribbled visitor signatures .

Such a media feature recently appeared on the WNYW network (Fox 5 New York) in April, when the Fox5NY crew took the trip about 2 hours north of Manhattan to the US Mint’s bullion depository at West Point.

Along with its bullion depository in Fort Knox, Kentucky, and its minting facility in Denver, Colorado, the West Point Mint, located adjacent to West Point military Academy, is one of the three claimed Mint storage locations for the US Treasury’s “deep storage” gold reserves, and according to the US Treasury, there are 11 storage compartments at West Point storing 54 million troy ounces, or 1682 tonnes, of United States Government owned gold reserves. Which would be just over 20% of the 8133 tonnes of gold that the US Treasury claims to hold.

…click on the above link to read the rest of the article…

Bank of England tears up its Gold Custody contract with Venezuela’s central bank

January 31, 2019

Bank of England tears up its Gold Custody contract with Venezuela’s central bank

In early November 2018, it first came to light that the Bank of England in London was delaying and blocking the withdrawal of 14 tonnes of gold owned by the Venezuelan central bank, Banco Central de Venezuela (BCV). At the time, Reuters and The Times of London both reported that according to unnamed British ‘public officials’, the delays were being caused by the difficulty and cost of obtaining insurance for the gold shipment back to Venezuela, and also due to “standard measures to prevent money-laundering“.

As I explained in a BullionStar article on 15 November titled ‘Bank of England refuses to return 14 tonnes of gold to Venezuela’, the explanations given to Reuters and the Times for the withdrawal delays were completely bogus, and that the real reason for blocking the BCV gold withdrawal was undoubtedly US and UK joint government interventions to stall the withdrawal. As I wrote at the time:

“The reasons put forward by official sources in the Reuters and Times articles for why Venezuela can’t withdraw its gold from the Bank of England are clearly bogus. The more logical and likely explanation is that the US, through the White House, US Treasury and State Department have been liaising with the British Foreign office and HM Treasury to put pressure on the Bank of England to delay and push back on Venezuela’s gold withdrawal request.”

As it turns out, this was an entirely correct prediction, since by 25 January, Bloomberg confirmed in an ‘exclusive report’ (two and a half months later) that:

…click on the above link to read the rest of the article…

Separating truth from fiction in China’s golden game of Poker

January 12, 2019

Separating truth from fiction in China’s golden game of Poker

This month the Chinese central bank reported that in December 2018, its gold reserve holdings increased by 10 tonnes, the first claimed increase in Chinese monetary gold holdings since October 2016.

Based on previous patterns reporting patterns, a two year hiatus in reporting gold holdings is not unprecedented for the Chinese central bank and its reporting agency SAFE. What is strange, however, is that after an extended absence of reporting, the Chinese are coming back to the table with not a lot to show for it.

It is extremely difficult to believe that the Chinese central bank has not been accumulating gold throughout the last two years. Having said that, the claimed 10 tonne gold addition in December is worthy of analysis in regards to its timing and what it may signal. However, it is also important to keep in mind that there is huge and justified skepticism about the true size of the Chinese State’s monetary gold holdings held through the People’s Bank of China (PBoC), and to this we can probably now add skepticism about the real accumulation pattern of PBoC gold.

A 10 tonne teaser

News of December’s central bank gold purchase was initially published on the web site of China’s State Administration of Foreign Exchange (SAFE) in it’s December 2018 ‘Official Reserve Assets’ report. Note that SAFE reserve asset updates don’t actually state the quantity of gold the PBoC holds but instead report a US dollar figure valued at the corresponding month-end US dollar gold price.

So for example, the PBoC’s gold holdings were valued at US$ 72.122 billion at the end of November, which at a month-end November gold price of US$ 1217.55 was 1842.5 tonnes, while the stated gold valuation at the end of December was US$ 76.331 billion, which at an end of December LBMA gold price of US$ 1281.65 was 1852.5 tonnes, i.e. a 10 tonne increase.

…click on the above link to read the rest of the article…

Bank of England refuses to return 14 tonnes of gold to Venezuela

November 16, 2018

Bank of England refuses to return 14 tonnes of gold to Venezuela

The Bank of England claims to be one of the largest physical gold custodians in the world, holding gold bars in vault storage on behalf of more than 70 central banks and a number of commercial (bullion) banks.

As a long-standing and well-known gold custodian, it should therefore be a simple matter operationally and logistically for any central bank customer from around the world to withdraw gold bars from the Bank of England and to have those gold bars sent overseas. These types of shipments have been happening at the Bank of England for hundreds of years.

Such an event would normally not generate any media interest nor even be known about in the public domain such is the secrecy and opacity of central bank gold transactions. For these reasons, the current case involving the Bank of England’s refusal to deliver Venezuela’s gold stored in London, and the way its been publicized, raises some questions and deserves comment.

HM Treasury and Fleet Street

So what exactly is the issue? On 5 November, the London headquartered Reuters news agency reported that the Venezuelan state, fearing sanctions, is attempting to repatriate 14 tonnes of gold from the Bank of England in London, but that this gold withdrawal and transport operation has not yet been actioned despite the withdrawal request being made by Venezuela nearly two months ago.

According to Reuters’ sources which were two unnamed “public officials with direct knowledge of the operation“, Venezuela’s gold bar withdrawal delay is being caused by the difficulty and cost in obtaining insurance for the gold shipment, and also because the Bank of England wants to know what Venezuela plans to do with its gold once it receives it.

…click on the above link to read the rest of the article…

LBMA Clearing and Vaulting data reveal the absurdity of the London ‘Gold’ Market

October 3, 2018

LBMA Clearing and Vaulting data reveal the absurdity of the London ‘Gold’ Market

The first day of each month sees the reporting of a number of statistics about the London Gold Market by the bullion bank led London Bullion Market Association (LBMA). These statistics focus on clearing data and vault holdings data and are reported in a 1 month lag basis for clearing activity and a 3 month lag basis for vault holdings data. Therefore the latest clearing data just published is for the month of August, while the latest vault holdings data is for the end of June.

While LBMA clearing data has been published for many years now, publication of vault holdings data by the LBMA is a recent phenomenon and only began at the end of July 2017. As the LBMA press release at the time stated:

“The physical holdings of precious metals held in the London vaults underpin the gross daily trading and net clearing in London. The net clearing is undertaken by the members of the London Precious Metals Clearing Limited (LPMCL).”

Although in both cases the data reported lacks any granularity and are just rolled up numbers, the two sets of statistics are useful in that they highlight the clear contradiction that exists between the huge volumes of fractionally-backed paper trading in the London Gold Market, and the relatively small quantities of underlying physical gold that sit in the gold vaults of the same institutions engaged in this ‘gold’ trading, quantities which are even smaller when Bank of England and ETF gold holdings are excluded.

**LBMA gold vaulting data report for end of June 2018: Published 1st October**

Vault Holdings – Underpinning ‘Gold’ trading

…click on the above link to read the rest of the article…

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