Wednesday, August 23, 2017

Bullion banks still dumping contracts to keep gold price down below $1300 even as big money starts to get back into sector

It is a recognized fact that as long as the Comex and LBMA have control over the paper pricing of gold, no matter how much money comes into the sector the metals will never realize their true price discovery.  However the continued manipulation by bullion banks to short the gold market doesn't appear to be hindering big money from starting to once again get into the sector, just as they did back in early 2016 when the price eventually shot up to just below $1400 per ounce.

As the gold price flirts with $1,300 a troy ounce for the first time since November, hedge funds are at odds with longer term investors, who have been pulling money from exchange traded funds betting on the yellow metal. 
The buying of gold futures contracts by hedge funds and other speculators has surged a record $19bn over the past month, spurred by concern over lofty equity market valuations and geopolitical tensions with North Korea, according to analysts. 
By contrast, gold-backed ETFs, which are more popular with longer-term funds and retail investors, have recorded outflows over the same period. 
That has raised questions about whether gold can build on this year’s 13 per cent rise and rally decisively beyond the $1,300 level. On Monday, gold had eased to $1,290.9. 
“Usually when gold has its strongest rallies, it’s when we see broader investor interest, we haven’t seen that in play at the moment,” said Suki Cooper, an analyst at Standard Chartered in New York. 
She estimated that hedge funds and other investors have bought a record 474 tonnes of gold over the past five weeks on the Comex futures exchange in New York. Worth around $19.3bn at current prices, buying only came close to such levels in Comex futures after the vote for Brexit, said Ms Cooper. Over the same time, holdings in gold-backed ETFs have seen 35 tonnes of outflows. - Financial Times


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