A Gold Oddity

Sun, Jun 15, 2014 - 5:59pm

Here is a news item from Zerohedge :

Link to the rest of the article: https://www.zerohedge.com/news/2013-03-24/another-gold-shortage-abn-halt-physical-gold-delivery

Please note the date of the article in Zerohedge was 24 March 2013.

So this sounds like gold that was in trust for clients had been rehypothecated, nay let us not use weasel-word bankster-speak, let us use English instead. How about: "stolen"," illegally converted to title of another party" instead? Alas I do not know the terms of the gold account contracts, so I can not be sure what was allowed and legal, or disallowed and illegal, or what was just shady sharp practise! So I must refrain from characterizing what was done last March to the gold account holders' gold. All I can surmise (from the bank's own letter) was that the gold was gone, or seemed to be so, and paper settlement would replace the obligation, or was that it?

So pretty soon the anti-bankster oriented alternative media jumped upon this news released .... err ... from ABN AMRO .... and did what they do best.

Now Dear Reader, if you receive news that a large bank can not deliver the gold (entrusted to them by their customer clients) back to those clients upon demand, well you might think that the gold is gone, and some freshly printed notes will be offered to clients instead, whereupon the clients would have to enter the gold market and purchase "their" gold back. It seems a reasonable and bullish way to interpret such information, doesn't it?

Well, let us look at the gold price in the period following this news release.

Here is a chart of what happened next:

Yes that is some coincidence isn't it? And 1600 minus 1200 = 400 which is a lot of money which changed pockets. A whole lot of money.

Now at this stage I should mention that people who made investment decisions based upon a letter written by a bank, and found in the public media (and there were a lot of them) may have learned something from how their trading system subsequently panned out. Something about what is and what isn't actionable information and what is and what isn't bait laid by the covert sales departments of large corporate entities who make money from trading assets. Maybe that letter was not for the adressees. Maybe it was for the public.

Still, Reader, I leave it up to you to figure out cause and effect in the byzantine world of gold pricing, and I will focus instead on a slightly different facet of the story than who made how much and how back in 2013. Let us look more towards the present.

One of the things which follows an investment pro selling at the top or a significant high, is that the pro usually gets interested in buying back the asset after the price has fallen by a large amount. They like to buy at the bottom, or near a significant low.

So if a lot of gold got sold to .. .err, the public .... at the beginning of a 200 dollar decline, then it might seem reasonable that when gold stops falling it might just be a teeny bit possible that maybe somebody is buying their gold back at a lower price.

So now I bring this little interview from Kitco. The first 4 1/2 minutes are quite relevant:

Investment Demand Higher In Switzerland Than China: Jeff Christian | Kitco News

...." 144 million ounces of gold that came into Switzerland that stayed there".......

But, but, but ... why don't they want us to know this? We received no letter from the banks this time ! What would they do in silence?

Sherlock Holmes once solved a mystery based upon "the dog that didn't bark".

Here is an excerpt:

Quote: Gregory (Scotland Yard detective): "Is there any other point to which you would wish to draw my attention?"

Holmes: "To the curious incident of the dog in the night-time."

Gregory: "The dog did nothing in the night-time."

Holmes: "That was the curious incident." :Unquote

I can't remember if the dog's name was provided in Sir Arthur Conan Doyle's book, but, tongue in cheek, could it possibly have been called "Accumulation"?

Caveat emptor readers! It's just another gold market tale!

Argentus Maximus

The author posts daily commentary on the gold and silver markets in the TFMR forum: The Setup For The Big Trade. More information about the author & his work can be found here: RhythmNPrice.

About the Author


Jun 15, 2014 - 6:11pm

Whaaat? Nobody wants first?

I bet that if I rehypothecated my real estate by applying for, and obtaining multiple mortgages using one property as collateral, that they would toss me in jail. but what' is the problem? If I can keep up my end of the deal by earning fiat with the borrowed money and keeping my obligations...

Yet they can sell gold warehouse receipts to multiple clients, lets say, 30 to one. Lets hope two of those 30 don't ask for their physical.

Jun 15, 2014 - 6:16pm

I promise

I won't be a rehypothecator! Thanks for more to ponder AM

Swift Boat Vet
Jun 15, 2014 - 6:23pm

Interesting find my friend

I keep wondering when big, smart money in the west will build up or begin a replentishment of gold. That is if any of the gold sold the last year or two was actually their own. Knowing TPTB's code of ethics and morals, they probably never sold an ounce of their own personal stash. Sell all gold but their own! What do you think?


Jun 15, 2014 - 6:42pm

Great stuff Argentus

A gold oddity indeed.

Ooh, what a coincidence.

Spot-on Sherlock .

Jun 15, 2014 - 7:13pm


Since becoming a member of this site I watch no TV. All the mystery intrigue and entertainment imaginable are to be found following the story of gold. Excellent post!

sierra skier
Jun 15, 2014 - 7:22pm

I'm sure glad all of these

I'm sure glad all of these folks are taking care of 'our gold' and cashing us out when we decide to close out our accounts and ask for our physical.

Jun 15, 2014 - 7:31pm

Curiouser and curiouser

Are the Swiss to be trusted?

Jun 15, 2014 - 7:38pm

as the cycle completes

Only Silver and Gold are Money. And so it was.

but then it started... with people using paper that represented their gold, (that was being held for them)

paper usage grew and matured, and became the norm.

for a time paper thrived in spite of it's fatal flaws, great fake markets and economies with glorious charts and polished narrators!! ...but the weight of natural law was always pulling until the best years were past.

declining in place, it's demise only became more and more obvious.

and as it ends... people are using paper to represent their gold. (that is being stored for them?)

Only Silver and Gold are Money. And so it will be.

Jun 15, 2014 - 7:43pm

WTF!? Christian blowing hot air!

Nice post, AM, thank you!

How I would very much love to hear Koos Jensen's opinion/critique of the "facts" put forth this interview!

"Chinese investment demand was about 43,000,000 ounces [1,219 Metric Tons] cumulatively from 2008 to 2013." (my emphasis). That is a LOT LESS than the numbers we've been hearing from people like Koos and Eric Sprott.

"So, if you look at it from 2008 through 2013, it comes down to about 147,000,000 ounces of net imports, about 4,000,000 ounces were used in jewelry and watches, so you have about 144,000,000 ounces [4,082 Metric Tons] of gold that came into Switzerland and stayed there. So, investment demand in Switzerland is much higher than the demand in China, and, much more importantly, Switzerland is not running out of gold, and, in fact, it has, since 2008, added about 10% of global private investment holdings of gold in Switzerland alone."

Below is the graph presented in the interview. If Christian is right in this regard, there is lots of hoarding going on...

[Edit, sorry, for whatever reason, I am not successful in uploading the dingy dang darn file!!]

Jun 15, 2014 - 7:44pm

Gold Prices to Rise Further Amid Middle East Tensions

  • View Photo

    Gold prices are set to rise further next week with geopolitical tensions in the Middle East expected to boost the precious metal's safe-haven status.

As many as 16 of 24 analysts polled in a Kitco Gold Survey said they expected gold prices to trade higher next week, while three predicted that prices will drop and five forecast prices to trade sideways.

However, analysts also said that traders are heading towards the energy market, and away from precious metals, in their pursuit of safe-haven assets.

In addition, the US Federal Reserve's monetary policy statement and Fed chief Janet Yellen's press conference, on 18 June, will influence gold prices.

Kevin Grady, owner, Phoenix Futures and Options, said developments in Iraq this week supported gold.

But traders are using crude oil as a safe-haven play, and not gold, partly because the yellow metal is nearing the technical chart resistance, he added.

Afshin Nabavi, head of trading at MKS in Geneva said: "I think the Iraq situation shook everybody up. Oil rallied sharply and we were able to push gold higher.... But I'm not convinced that we won't see more downside. I think you can cautiously sell rallies if we get to $1,280.

"Thirteen hundred is the big resistance. If we don't find any more news then we'll probably go back to $1,240. There's the FOMC next week; that's worth watching. That could change things quickly. And it's another reason why I would sell rallies."


Subscribe or login to read all comments.


Donate Shop

Get Your Subscriber Benefits

Private iTunes feed for all TF Metals Report podcasts, and access to Vault member forum discussions!

Key Economic Events Week of 8/19

8/21 10:00 ET Existing home sales
8/21 2:00 ET July FOMC minutes
8/22 9:45 ET Markit Manu and Svc PMIs
8/22 Jackson Holedown begins
8/23 10:00 ET Chief Goon Powell speaks

Key Economic Events Week of 8/12

8/13 8:30 ET Consumer Price Index
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Labor Costs
8/14 8:30 ET Philly Fed
8/14 9:15 ET Ind Prod and Cap Ute
8/14 10:00 ET Business Inventories
8/15 8:30 ET Housing Starts & Bldg Permits

Key Economic Events Week of 8/5

8/5 9:45 ET Markit services PMI
8/5 10:00 ET ISM services PMI
8/6 10:00 ET Job Openings
8/8 10:00 ET Wholesale Inventories
8/9 8:30 ET Producer Price Index

Key Economic Events Week of 7/29

7/30 8:30 ET Personal Inc/Spending & Core Inflation
7/30 10:00 ET Consumer Confidence
7/31 8:15 ET ADP employment
7/31 2:00 pm ET FOMC Fedlines
7/31 2:30 pm ET CGP presser
8/1 9:45 ET Markit Manu PMI
8/1 10:00 ET ISM Manu PMI
8/2 8:30 ET BLSBS
8/2 10:00 ET Factory Orders

Key Economic Events Week of 7/22

7/23 10:00 ET Existing home sales
7/23 10:00 ET Richmond Fed Manu Idx
7/24 9:45 ET flash Markit PMIs
7/25 8:00 ET Count Draghi/ECB policy meeting
7/25 8:30 ET Durable Goods
7/25 8:30 ET Wholesale Inventories
7/26 8:30 ET Q2 GDP first guess

Key Economic Events Week of 7/15

7/15 8:30 ET Empire State Fed Index
7/16 8:30 ET Retail Sales and Import Price Index
7/16 9:15 ET Cap Ute and Ind Prod
7/16 10:00 ET Business Inventories
7/17 8:30 ET Housing Starts and Building Permits
7/18 8:30 ET Philly Fed
7/19 10:00 ET Consumer Sentiment

Key Economic Events Week of 7/8

7/9 8:45 ET Fed Stress Conference, three Goon speeches
7/10 8:30 ET CGP Hump-Hawk prepared remarks
7/10 10:00 ET CGP Hump-Hawk House
7/10 10:00 ET Wholesale Inventories
7/10 2:00 ET June FOMC minutes
7/11 8:30 ET CPI
7/11 10:00 ET CGP Hump-Hawk Senate
7/11 12:30 ET Goon Williams
7/12 8:30 ET PPI

Key Economic Events Week of 7/1

7/1 9:45 ET Markit Manu PMI
7/1 10:00 ET ISM Manu PMI
7/1 10:00 ET Construction Spending
7/2 6:35 ET Goon Williams
7/3 8:15 ET ADP June employment
7/3 8:30 ET Trade Deficit
7/3 9:45 ET Markit Services PMI
7/3 10:00 ET ISM Services PMI
7/3 10:00 ET Factory Orders
7/4 US Market Holiday
7/5 8:30 ET BLSBS

Key Economic Events Week of 6/24

6/25 10:00 ET New Home Sales
6/25 1:00 pm ET Chief Goon Powell
6/25 5:30 pm ET Goon Bullard
6/26 8:30 ET Durable Goods
6/27 8:30 ET Q1 GDP final guess
6/28 8:30 ET Personal Income and Consumer Spending
6/28 8:30 ET Core Inflation
6/28 9:45 ET Chicago PMI

Key Economic Events Week of 6/17

6/18 8:30 ET Housing Starts and Building Permits
6/19 2:00 ET FOMC Fedlines
6/19 2:30 ET CGP presser
6/20 8:30 ET Philly Fed
6/21 9:45 ET Markit flash June PMIs

Recent Comments

by Turd Ferguson, 8 min 9 sec ago
by SteveW, 22 min 15 sec ago
by bruinjoe, 24 min 36 sec ago
by Marcus, 47 min 7 sec ago
by kkingchiro, 57 min 18 sec ago
by lakedweller2, 1 hour 6 min ago

Forum Discussion

by sierra skier, 2 hours 34 min ago
by NW VIEW, 3 hours 36 min ago
by Porros, Aug 21, 2019 - 5:00am
by sierra skier, Aug 20, 2019 - 5:12pm
by zman, Aug 20, 2019 - 4:53pm