Robert Lambourne: Gold market intervention by BIS increased substantially in January

The Bank for International Settlements substantially increased its use of gold swaps and other gold-related derivatives during January, according to the bank's statement of account for the month:

https://www.bis.org/banking/balsheet/statofacc180131.pdf

This increase follows a large decline in the bank's gold swaps in December. In recent months the BIS has been actively trading gold derivatives.

The information provided in the BIS monthly statement of account 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 January 31, 2018, was 580 tonnes of gold. This compares to estimates of 450 tonnes, 600 tonnes, and 570 tonnes, respectively, at the 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. The lack of transparency fuels suspicion that this activity is related to official efforts to suppress the gold price.

-----

Robert Lambourne is a retired business executive in the United Kingdom who consults with GATA about the involvement of the Bank for International Settlements in the gold market.

* * *