Craig Hemke at Sprott Money: Gold futures contract supply is virtually infinite


10:12p ET Wednesday, July 3, 2019

Dear Friend of GATA and Gold:

Amid the surprising recent rally in gold prices, Craig Hemke of the TF Metals Report, writing at Sprott Money, today cautions monetary metals investors about the nature of the gold futures markets, which are controlled by bullion banks with access to the infinite money of central banks.

From May 30 through July 1, Hemke writes, the gold price "rallied $105 from $1,285 to $1,390. That's an increase of 8.2%. However, over that same time the banks have increased the available float of Comex gold contracts from 443,231 to 591,164. That's 33.4%. ... How much might price have risen if the supply of contracts had been held constant? That's hard to say but it's quite likely that it would have been a tad more than 8.2%."

... Dispatch continues below ...


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That is, with the assistance of central banks, for which bullion banks often operate in the gold market, a potentially infinite supply of imaginary gold is always being created. As was observed years ago by market analyst Bron Suchecki, formerly of the Perth Mint, now of precious metals services group Pallion in Australia, the gold market is where banks that have little or no gold pretend to sell it to speculators who don't have the money to buy it.

And yet that is largely how the monetary metal's worldwide price is set and will continue to be set until people who want to own gold or see its price rise purchase only real metal and remove it from the banking system.

Hemke's analysis is headlined "Supply and Demand in Comex Digital Gold" and it's posted at Sprott Money here:

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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