Robert Lambourne: BIS gold derivatives down in March, back up in April

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By Robert Lambourne
Tuesday, May 8, 2018

The Bank for International Settlements has just published, on the same day, its monthly statement of account for March 2018 as well as its monthly statement for April 2018:

https://www.bis.org/banking/balsheet/statofacc180331.pdf

https://www.bis.org/banking/balsheet/statofacc180430.pdf

From these statements it is possible to deduce that during March the BIS reduced by about 165 tonnes its use of gold swaps and other gold-related derivatives, but subsequently in April the bank's use of gold swaps and other gold-related derivatives increased by about 60 tonnes.

It seems that the BIS is continuing to trade actively in gold derivatives and the amounts disclosed each month have been following an irregular pattern.

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The information provided in the BIS monthly statements is not sufficient to calculate a precise amount of gold-related derivatives, including swaps, but it appears that the bank's total exposure as of April 30, 2018, was 420 tonnes of gold.

This compares to estimates of 360 tonnes, 525 tonnes, 580 tonnes, 450 tonnes, 600 tonnes, and 570 tonnes, respectively, at the February, January, December, November, and October month-ends and an audited swaps figure of 438 tonnes as of March 31, 2017.

When it comes to its activities in the gold market, the BIS provides little information on what it is doing, why, and for whom. This lack of transparency fuels suspicion that the bank's trading is related to official efforts to suppress the gold price.

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Robert Lambourne, a consultant for GATA, is a retired business executive in the United Kingdom who studies the activity of the Bank for International Settlements in gold market.

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