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Secret gold swap has spooked the market

Posted By admin On July 12, 2010 @ 12:24 pm In Featured Stories | Comments Disabled

Garry White and Rowena Mason
London Telegraph [1]
July 12, 2010

IT takes a lot to spook the solid old gold market. But when it emerged last week that one or more banks had lent 380 tonnes of gold to the Bank of International Settlements in return for foreign currencies, there was widespread surprise and confusion.

The news that a mystery bank has just pawned the family jewels gave traders a jolt nervous about the sudden transfer of almost 20pc of the world’s annual gold production and the possibility of a sell-off.

In a tiny footnote in its annual report, the bank disclosed its unusually large holding of gold, compared with nothing the year before. The disclosure was a large factor in the correction of the gold price this week, which fell below $1,200 for the first time in more than a month.

Concerns hinged on whether the BIS could potentially sell on this vast cache of bullion in the event of a default, flooding the market with liquidity. It appears to have raised $14bn for whoever’s been doing the swapping small fry on the currency markets, but serious liquidity in the gold market.

Denominated in euros, gold has fallen 8pc since the beginning of the month and is now trading at a seven-week low of 937 per troy ounce.

Full article here [1]

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URLs in this post:

[1] London Telegraph: http://uk.finance.yahoo.com/news/secret-gold-swap-has-spooked-the-market-tele-027221ec09bc.html?x=0

[2] Image: http://infowars-shop.stores.yahoo.net/post4rioffe.html

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[4] Gold Tumbles As IMF Reaffirms Plan To Sell 191.3 Metric Tons Of Gold Over Time in Phased “On-Market” Gold Sales: http://www.prisonplanet.com/gold-tumbles-as-imf-reaffirms-plan-to-sell-191-3-metric-tons-of-gold-over-time-in-phased-on-market-gold-sales.html

[5] Very Curious Activity in the Gold Bullion Market Leads to Speculation that Banks are Short Tons of Gold: http://www.prisonplanet.com/very-curious-activity-in-the-gold-bullion-market-leads-to-speculation-that-banks-are-short-tons-of-gold.html

[6] Secret Iran Gold Holdings Leaked: Tehran Holds Same Amount Of Gold As United Kingdom, And Is Buying More: http://www.prisonplanet.com/secret-iran-gold-holdings-leaked-tehran-holds-same-amount-of-gold-as-united-kingdom-and-is-buying-more.html

[7] Central Banks Net Buyers of Gold for 1st Time in 20 Years: http://www.prisonplanet.com/central-banks-net-buyers-of-gold-for-1st-time-in-20-years.html

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