goldcore.com / By Mark O’Byrne / January 29, 2013
The Financial Times has said that the Bundesbank’s move to repatriate 674 tonnes of the German gold reserves from Paris and New York to Frankfurt is a victory for openness, transparency and for those who have campaigned for transparency in the gold market for years.
The FT said that the move is important -
“not for what it says about Germany’s faith in French or American vaults; nor for the cost of shifting 674 tonnes of gold; but because it is a major victory for transparency in the gold market.”
The move by the Bundesbank to be more transparent about the location of gold reserves was welcomed by the FT and the FT’s commodities correspondent Jack Farchy noted that while central banks should not have to reveal their trading strategies to the world, there is a world of difference between this and –
“disclosing simple facts about your reserves – such as their quantity, where they are held, whether they have been lent or swapped, and so forth – with a delay if need be.”
The article concluded:
“That the Bundesbank has been nudged into this new-found transparency must be chalked up as a victory for the groups of investors – most prominent among them, the Gold Anti-Trust Action Committee, or GATA – that have for years been asking central banks to reveal their activities in the gold market.”
“If central banks wish to refute suggestions from such groups that their gold does not exist, or that they are scheming to manipulate prices, they could do worse than to follow the Bundesbank’s lead.”
Those who have dismissed the Gold Anti-Trust Action Committee or GATA as “conspiracy theorists” may now wish to apologise and acknowledge the documentation and evidence that GATA have amassed over the years.
GATA have long made a strong case that certain banks may have been manipulating gold and silver prices lower. In the same way that banks conspired to rig LIBOR and interest rates.
The CFTC in the U.S. has been investigating the allegations for some years but have yet to come to a conclusion or adjudicate, leading to concerns that their extensive and lengthy investigations will come to nought.
The FT article is an important development and may help bring about a free market in gold and silver prices. This should lead to a revaluation of precious metal prices to the higher levels that have been expected by more astute analysts for some time and which are merited due to the very strong fundamentals.
The inflation adjusted highs for gold and silver of $2,400/oz and $140/oz remain likely medium term price targets.