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Has The PBOC Taken Control of The Gold “Market”? – Craig Hemke

  • Has The PBOC Taken Control of The Gold “Market”? – Craig Hemke
    by https://www.sprottmoney.com/
    The evidence is mounting, and we invite you to consider the implications. First, a few items of background information. Perhaps these are unrelated, perhaps they are not.

    * In 2013, a major Chinese conglomerate called Fosun International purchased One Chase Manhattan Plaza from JP Morgan: https://money.cnn.com/2013/10/18/news/china-jpmorg… Why would this be significant? Because it’s the same property that houses a massive underground gold vault … that just happens to be directly across the street from the New York Fed:https://www.zerohedge.com/news/2013-03-02/why-jpmo…

    * Next, ICBC (Industrial and Commercial Bank of China) purchased the lease of DeutscheBank’s massive London vaults in early 2016. ICBC then petitioned to join JPM, HSBC, Scotia, Barclays and UBS as a member of the London Daily Fix process: https://www.telegraph.co.uk/finance/commodities/12…

    * Soon thereafter, ICBC also bought a massive London gold vault from Barclay’s:https://www.theguardian.com/business/2016/may/16/b…

    * Most recently, the World Gold Council announced the offering of a new gold ETF to supplement the existing GLD. The custodian of the gold for this new fund? You guessed it … ICBC:https://www.prnewswire.com/news-releases/icbc-stan… 

    Fast forward to the summer of 2018. Two weeks ago, our fellow columnist here at Sprott Money, David Brady, wrote an insightful piece regarding a new correlation for the global gold price—the USDCNY—which is the exchange rate of US$ to Chinese yuan. Though the PBOC maintains a “peg” for this rate, the rate is allowed to fluctuate if the PBOC deems it necessary. Before we go on, I urge you to read David’s column:https://www.sprottmoney.com/Blog/gold-the-chinese-… 

    Now consider this. Since the PBOC began to actively devalue the yuan versus the dollar four weeks ago, the price of COMEX gold has tracked the yuan nearly tick-for tick. This is clearly shown on the chart below. We’ve taken the USDCNY and inverted it to CNYUSD. This is shown in candlesticks. The price of the Aug18 COMEX gold is represented as a blue line.

    read more.

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July 12, 2018 - Posted by | Economics | , , ,

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