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Central banks aren't out of the gold market rigging business yet
9:17a ET Saturday, June 7, 2025
Dear Friend of GATA and Gold:
While central banks lately have seemed to be losing their decades-long war against gold, or even coming over to the gold side, they are still secretly intervening in the market for purposes they won't explain.
That conclusion has to be drawn from the latest report from Robert Lambourne, GATA's consultant on the Bank for International Settlements. Lambourne said Friday that the May statement of account from the BIS, published this week --
https://www.bis.org/banking/balsheet/statofacc250531.pdf
-- shows, when deciphered arithmetically, that the bank's gold swaps rose to 32 tonnes in May from a mere 5 tonnes in April, an increase of 27 tonnes.
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Lambourne advised against making too much of this, since the great trend of BIS gold swaps, down 99% in four years as of last month --
https://www.gata.org/node/23855
-- remains in place, implying a reversal in central bank policy toward gold, a reversal that has coincided with the monetary metal's sharp rise in price since January 2024.
But even having reversed policy, central banks still may want to moderate gold's ascent and prevent what they may consider terrible accidents -- that is, price spikes showing the possibility of free markets as central banks lose control after decades of unfettered money and credit creation.
Lambourne speculates that the new gold swaps may involve a bullion bank that is custodian of a gold exchange-traded fund whose gold has been double- or multiple-counted. Maybe the ETF metal can't keep up with the various locations where it is supposed to be and needs to make occasional cameo appearances.
Overcounting gold has been the secret policy of central banking for decades, as confirmed by the secret March 1999 report of the staff of the International Monetary Fund, which described the necessity of letting central banks hide their leased and swapped gold, recording it as if it was still unencumbered in their vaults:
https://www.gata.org/node/12016
In any case GATA has long suspected that gold ETFs were, like the U.S. gold futures market, established to divert investment from real metal into mere derivatives that could create a vast, imaginary supply of gold as long as investors didn't get wise to the racket and demand delivery.
Of course lately there seem to have been many demands for delivery of gold, including heavy demands from central banks themselves. The major central banks, being members of the BIS, the hub of gold intervention, surely figured out long ago what was going on and, in taking delivery, have signified that they're no longer playing along with the racket and the U.S. dollar imperialism it was engineered to enforce.
Even if the gold purportedly held by ETFs is not double- or multiple-counted, it can't be accessed directly by ordinary investors. It can be touched only by the very bullion banks that have been assisting central banks in rigging the gold market. So people who place their money with gold ETFs in the hope of price appreciation may be taking the very risk that holding gold is meant to avoid.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
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