Although it may seem impossible to believe, because of the amounts of gold being reported, but no errors have been made. Far from electronic paper claims, the 7.1 tons of physical gold that were delivered to Goldman Sachs and HSBC on 6 August 2015 is a reality. This huge precious metals purchase was initiated for these banking giants while they reported a bear market in gold. Instead of bank clients being the buyers, the banks were storing the gold in their own corporate accounts. This confirmation was made by the fact that the bank’s house was the designated recipient as opposed to clients’ accounts.
These purchases seem rather odd due the fact that they advised clients to stay away from gold purchases due to its bleak future. This announcement by Goldman Sachs does not quite make sense as they chose to purchase 3.2 tons of the real metal. The explanation behind this conflicting move is attributed to the bear market approach that the company uses, not only when dealing with physical precious metals, but also when trading other commodities in the market.
Increasing Physical Metal Markets
Even though the paper market may be using numerous tricks to remain attractive, the physical gold market is still gaining popularity as more people want to trade with real metals. Rising demands are expected to surpass the current 1350 ton in 2015. It is expected that these numbers will increase in 2016 although this will not be a reason enough to stop exploitation through cheap paper market acquisitions. Usually, the mysterious dealer in gold bars will fix the physical demand problem temporarily regardless of other supplies and gold prices in the market.
HSBC made a statement that drifting towards Fed tightening and strengthening of the US dollar and low global inflation pressure weakens gold demand across the world. This statement was released after the realization that here was a 61% increase of gold bars being exported to India from April to May. It is surprising how HSBC failed to realize this fact, when India is a major export destination. The truth is that the bank’s executives were well informed hence the sanction of purchasing a huge amount of physical gold for their reserves.
HSBC purchased of 3.6 metric tons of gold from COMEX at very low prices. The gold was delivered to the bank’s house for storage. The gold in this article refers to gold bars and not paper gold or its equivalent. According to the trend being established, it is clear that bank executives are gold hungry. There is little to no belief in gold trusts. There is also the reluctance to use existing trusts as an alternative for raw metal gold.
The approach used by the banks is to acquire gold while advising clients of how bad of an investment purchasing physical gold would be, is a bit questionable. The reluctance by arbitrageurs to sell gold, regardless of gold prices, demonstrates a high level of tightness in the market. The logical conclusion would be that the large banks might be trying to control the price of gold.
In summary, COMEX design is a US-based financial market utility, a financial stability council creation. The Treasury is willing and able to drain stored gold from is reserves to salvage the situation. Despite the government’s effort, it is still difficult to understand why the two banks are doing major investments in physical gold. Perhaps these banks know something we do not? Whatever the case, when the largest banks in the world like JP Morgan, HSBC, and Goldman Sachs, start taking large deliveries of physical precious metals, people should take notice.
Many believe there will be another recession or financial crisis. Perhaps the banks are buying physical gold and silver to ensure they won’t collapse? Whatever the reason, the banks are not investing in ETF’s or futures. They are taking possession of physical precious metals. If these large banks believe precious metals will protect them financially, don’t you think you should do the same?
To start investing in gold or silver today, contact Capital Gold Group online at startwithgold.com, or call 1(800)510-9594.