On March 26, 2020 HSBC reported they had lost north of $200 million in one day. This was their projected profit for the entire year of 2020. HSBC, along with JPMorgan / Chase, had been active in the gold market, in what can only be described as a “scheme”, in the exchange-for-physical (EFP) program between London and New York.
HSBC Holdings Plc lost around $200 million in one day in March because of disruptions to the gold market that caused prices to diverge dramatically in key trading hubs, according to a filing by the bank. The one-day loss was unusually large for a market in which the leading banks — which include HSBC and JPMorgan Chase & Co. — typically hope to make around $200 million in an entire year. It far exceeded the maximum loss anticipated by HSBC’s value-at-risk models.
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The bank described the loss as a “mark-to-market loss mainly associated with gold refining and transportation challenges.” It highlighted the “unprecedented widening of the gold exchange-for-physical basis,” which “affected HSBC’s gold leasing and financing business and other gold hedging activity leading to mark-to-market losses.”
HSBC declined to comment. Source
I’ll bet they declined to comment.
While this was happening Scotia Bank was shuttering their precious metals trading desk after more then 300 years of gold market activity. Scotia, it appears, closed their gold trading desk for the same reason HSBC lost $200 million in one day – EFP.
The move could mean more challenges for the gold market that has already seen a supply crunch and wide price spreads between spot and futures prices, analysts told Kitco News.
“The Scotiabank shuttering of its metals business is a sign of these historic times of markets upheaval. However, such is not a shock to the metals marketplace that has in recent weeks already seen many companies and mines so severely impacted by the Covid-19 pandemic,” Source
To be clear – Wuhan coronavirus is not the cause of Scotia or HSBC’s problem in the gold market. Their problems in the gold market stem from making bad bets that were called home. These bets, in the form of the EFP program, left both banks without gold, people demanding the gold they had on contract and the acquisition cost of gold getting out of balance with the contract. That’s what caused their problems
Gold The Secret Knowledge of the Financial Universe: Chris Powell
The past couple of months we have witnessed some unusual activity at the COMEX and LBMA. With coronavirus destroying every aspect of commerce around the world it’s not surprising to see unusual activities in every market. Tyranny has a way of making losers the biggest winners and winners the biggest losers.
Rob Kirby: Gold, Silver, ESF and the Collapsing Economy
Back on April 11 we ask about Russia’s decision to STOP acquiring gold mined in Russia. This is the first time in approximately 10 years that Russia’s central had not acquired gold.
We believe there is more to this decision than what is being reported. Why would Russia make this decision at the exact time when gold is most needed – and not only that why would Russia begin shipping gold to the rest of the world – at the exact time when gold is most needed AT HOME? It doesn’t add up. If Russia continues into the month of May, that will mean another 25+/- tons will be available. Continue Reading – Who Will Receive a Golden Gift From Russia?
Was it to send gold to London? Well, we can with confidence that Russian gold was sent to London because 2 bars were reported to be left behind from a shipment. Was this act a set up to announce to the world that Russia was in fact sending gold to London? How does one leave two gold bars – weighing in at a hefty 25 kilos (56 its 3.5 ounces) of gold out of a shipment? How does that happen?
The 25.5-kilogram cargo apparently fell off a dolly while being transported from Russia to London. It has since been shipped to the customer while airport security services are investigating the incident.
Staff at Moscow’s Sheremetyevo International Airport have found a case with two gold bars worth 57,9 million roubles, or $750,000.
A photo of the two gold bars lying next to the case has emerged on social media. They were reportedly supposed to be shipped to London but fell off a dolly in the loading area. This is where cargo loaders found them and handed them over to police.
It has been speculated that the bullion, which weighs 25.5 kg, belongs to the Krasnoyarsk Non-Ferrous Metals Plant, one of the world’s largest precious metals manufacturers. Source
This whole thing reeks to the high heavens.
