Its statement of account for October shows that the Bank for International Settlements continues actively trading in gold swaps. The BIS uses gold swaps and other gold derivatives to gain access to gold held by commercial banks. Recent swap levels remain much lower than they were in the second half of 2018, although the level of swaps as of October 31, an estimated 186 tonnes, was the highest recorded since February 28.
There is not enough information in the bank's monthly reports to calculate the exact amount of swaps, but based on the information in the BIS statement of account for October, the bank's estimated month-end gold swaps rose 58 tonnes, or 45 percent, since the 128 tonnes reported at September 30.
This compares with 162 tonnes at August 31, 95 tonnes at July 31, 126 tonnes at June 30, 78 tonnes at May 31, 88 tonnes at April 30, 175 tonnes at March 31, 303 tonnes at February 28, 247 tonnes at January 31, 275 tonnes at December 31, 2018, and estimates of 308 tonnes in November, 372 tonnes in October, 238 tonnes in September, and 370 tonnes in August 2018.
More background on the bank's medium-term history of using gold swaps is available here:
http://www.gata.org/node/18825
On February 3 this year GATA published comments from a former gold industry executive describing the activities of the BIS in gold swaps in earlier decades:
http://www.gata.org/node/18828
The former executive wrote: "Effectively this process created a supply of 'paper gold' -- sometimes but not always marked to market -- that had a depressing effect on the gold price."
The BIS refuses to explain its activity in the gold market -- its objectives and underlying parties in interest --
http://www.gata.org/node/17793
— and mainstream financial news organizations refuse to ask about it.
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Robert Lambourne is a retired business executive in the United Kingdom who consults with GATA about the involvement of the Bank for International Settlements in the gold market.
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