“Somebody Big Is Sitting On The Gold Price”

Arabianmoney.net posted a conversation with Ross Norman, who is the CEO of Sharps Pixley, the London-based bullion broker with roots that go back to the late 1770’s.  What makes this admission astounding, and was overlooked by Arabianmoney, is that Ross Norman was at one time a gold trader for the Rothschild family at NM Rothschild.  In other words, he has access to the “wizard” behind the curtain that controls the London Buliion Marketing Association.

Here’s who it is, Ross, and I’m sure you already knew:

I am on an email distribution list operated by Gijsbert Groenewegen, who many of you may know from his articles posted on 321gold, Goldseek and Gold-Eagle.com.   Interestingly, Gijsbert sent out an email this morning with very interesting analysis from someone on his list who is an expert in the precious metals market.  The reader had just finished pouring over the latest BIS annual report, which was released in June.   Here’s his commentary:

Last week I scanned through the Bank of International Settlement’s 2014/2015 annual report, which came out in late June.  While I don’t have any investable conclusion from what I noted, I was impressed with how important gold is to its operations.   I don’t think the general gold market pays much attention to the BIS, but after going through the report, it was clear to me the BIS has the potential to have a major influence on the gold price, and that would certainly be true relative to the currencies it owns and manages.

If one considers that the BIS is the banker to central bankers  — 60 listed in total – then it is understandable that 95% of its deposits are denominated in currencies (74% USD, 13% euros, and 6% sterling) and the rest is gold (about USD$13.8 bn).  If the BIS role is to facilitate capital flows and smooth out FX, it makes a lot of sense that gold is central to its function.  It certainly appears prevalent in the annual report.

To me, it appears that gold is sort of a relief valve to some of the functions the BIS undertakes.   The BIS owns 108 tonnes of gold and accounts for 443 tonnes as off-balance sheet gold.  Also noteworthy is presence of gold derivatives.  Of the SDR 437.19 billion total notational derivative financial  instruments (1 Special Drawing Right = USD$1.40 ) —  gold related options, forwards, and swaps make up 30%; while interest rate swaps account for about 60%.  Its net gold investment assets account for 16% of its equity.   Gold is about 6.5% of assets and about 5% of liabilities.   I figure about 12% of its profits came from its gold transactions.

If there is one financial institution capable, willing and basically obligated ( per the 60 central banks it represents!) to influence the gold price, it is the BIS.  If they are not influencing the gold price / FX, then the 60 member banks are not getting well served!!

Between the above analysis and Ross Norman’s interesting admission, I think it’s pretty clear who the 600 lb. gorilla is in the gold market.  Which means that the Fed and the U.S. bullion banks are de facto manipulating the gold market on a daily basis, as the they are subservient to the BIS.

If nothing else, it certainly explains this:

GOLD_Q1SilverOTCderivs1

You can get into contact with Gijsbert here: LINK

11 thoughts on ““Somebody Big Is Sitting On The Gold Price”

  1. Gold is about 6.5% of assets ……. yes, at its current USD price. I’m expecting a rise in both. That would be a market signal that the CB’s are seeing bullion based liquidity in the market place, which may be the catalyst that takes the lid off the gold price .

    Bankers think in terms of liquidity and flow, first ! Not price. Need evidence ? That’s exactly why floating fiat currency was developed in the first place, whether the liquidity was to be applied to debt (fiat currency) or whether it was to be applied to assets such as gold and silver and their fully scalable liquidity.

  2. Ok, if a 600lb gorilla is sitting on the gold price then how or
    what will make the gorilla move ? It seems the BIS and the
    central bankers have gold on lock down.

  3. Off topic but worth mentioning concerning the TTP-

    New Law Quietly Doubled Reporting Penalties, and Nobody Noticed

    http://www.taxnotes.com/tax-notes-today/penalties/new-law-quietly-doubled-reporting-penalties-and-nobody-noticed/2015/07/10/14908536

    (You have to pay to read the whole article on tax notes)

    In a nutshell, when the Trade Preferences Extension Act (TTP) was passed, hidden/buried in the bill was the change in the law that doubled the penalties for businesses failing to file correct information returns.

    A condensed version free to read
    http://www.millerchevalier.com/NewsEvents/IntheNews?find=150208

    I wonder what other surprises are hidden in this law/nail-in-the-coffin of open and free government.

  4. When Bob Chapman was alive I remember him saying that the largest personal holder of Gold on th planet were the Rothchild’s. I believe he said that they owned about 23% of the above ground Gold ever mined. He went on to add that his estimates was closer to 26% hmmmmm. He also stated that ” do you think the Rothchild’s want $,1200.00/oz Gold ? No. They want $8,000.00/oz Gold “.

  5. This rigging is possible only by an artificial inflation of the supply of gold through the use of paper derivatives, options, futures, synthetic naked shorting and fractionally-backed ETFs.

    What can be done? One could wait for a ‘credit event’ to start a panic into real metal. Perhaps they will run out of real metal, a la 1968. Or for an economic collapse to so pressure the manipulators, making it difficult for them to keep all the plates spinning in the air simultaneously. Perhaps for a ‘force majeure’ declaration by one of the key dollar-denominated paper gold playpens, such as the COMEX? For the entire wash-and-rinse paper gold operation of the US banks to become so minimally profitable as to be abandoned?

    Nothing can be done by individuals about a 600 lb. gorilla unless he has an 800 lb. one in his corner. China may be about to start a yuan-denominated physical gold contract, though I doubt that will have much effect with the yuan pegged to the dollar. (That dollar peg is, however, increasingly anachronistic…!)

    We are left with awaiting the collapse of the Global Ponzi, which IS a certainty though we can’t know the timing.

    My prescription? Needed: a lengthy, slow, grinding stock BEAR MARKET.

    1. All this talk about fiat currencies and pegs to gold. Why not keep it all very simple and move to gold as a currency ?

      1. Yes. You make gold a currency by forcing every Govt to limit their currency issuance to the value of the amount of gold they own. You need currency issued as a proxy for that gold in order to have fungibility of the currency. The problem is once fractional banking is allowed, it de facto blows up the currency peg to gold.

  6. Dave,

    Came across a really interesting theory. The idea is that the BRCIS lead by China and Russia are buying physical Gold & Silver to back there trade. We all know about that and the SCO ( Shanghai Cooperation Agreement ). But the artificially low prices are being done to discourage any mine development by the West thru the COMEX/LBMA paper manipulation. The response is that China and Russia are subsidizing there mines in order to keep them open and guarantee future supply. This makes a lot of sense. Once the day comes and the COMEX is found wanting then the pricing mechanism ends up in Shanghai. And that is when we will see higher prices for the metals. Or we’ll all be turned into glass. Whichever comes first.

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