Rigged Gold

The desire of gold is not for gold. It is for the means of freedom and benefit.—Ralph Waldo Emerson

Magicians in the gold derivatives market (1) have long been engaging in creative sleight of hand, the extent of which is being exposed as a consequence of the Basel 3 regulatory change, which is requiring them to categorize their gold derivatives contracts under precious metals rather than exchange rates in their accounting statements (2).

Given that gold hasn’t been “money” since 1971, this begs the question of why gold derivatives have been categorized under exchange rates for so long, and whether doing so not only kept gold prices artificially suppressed, but also provided central banks advantages over other gold players as well as protection from the threat gold has posed to their monetary policies (3).

Given the geopolitical shifts, and the strengthening Russian-Chinese gold market (4) amidst the ongoing search for an alternative to the dollar as a global trade currency (5), it appears the West has realized that gold=strength and they must, therefore, “clean house” in order to mitigate the current rampant risks within their gold market (6).

A recent discovery of gold beneath Uganda’s soil, while likely exaggerated in amount (7), has the potential to strengthen the SCO’s geopolitical position, following the Ugandan government’s go-ahead for Chinese firm, Wagagai Gold Mining Company, to begin production (8).

Other countries appear to be walking down the golden road, with Zimbabwe returning to something similar to a gold standard in an effort to mitigate hyperinflation (9), while Switzerland has resumed gold purchases from Russia (10), continuing to ensure their domestic gold reserves are kept safe and sound (11).

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References

1. Report: JPMorgan Chase and Citibank Hold 90 Percent of All Gold and Other Precious Metals Derivatives Held by All U.S. Banks

2. Peter Hambro: BIS, Central Banks Are Rigging Gold Market Using Bullion Banks' Paper Gold

3. Basel III and the New Role For Gold

4. China and Russia in Close Cooperation aiming for Win-Win in Gold Markets

5. China and Russia Want to Replace US Dollar With BRICS Currencies

6. UNLOCKED: JPMorgan And Citi are 90% of The U.S. Gold Derivative Market

7. Uganda's Discovery Of '31 Million Tonnes Of Gold Ore' And What It Could Mean For World Gold Market

8. Uganda finds 31 mt of gold ready to be mined; signs up Chinese firm

9. Zimbabwe Central Bank to Offer Gold Coins as Inflation Ravages the Country

10. Russia exports gold to Switzerland for the first time since the war in Ukraine began as some buyers soften on self-sanctioning

11. Mystery: Swiss Central Bank Moved Its Gold From Berne to a Federal Bunker in Kandersteg