Dollar Drops to 19-Month Low Against Euro; Breaches $1.30 Level

[bart]

Re: Dollar Drops to 19-Month Low Against Euro; Breaches $1.30 Level

Bart is it possible the ECB's activities are moving the market? It looks too perfect. Or am I missing the boat entirely?

No question that they're a huge factor and have moved the market at times, and I think its safe to say that that's an understatement.

There are changes of +/- 2,000 tonnes in short periods and one tonne is about 32,000 troy ounces, which translates to about 64 million ounce buys & sells...

[jk]

Re: Dollar Drops to 19-Month Low Against Euro; Breaches $1.30 Level

No question that they're a huge factor and have moved the market at times, and I think its safe to say that that's an understatement.

There are changes of +/- 2,000 tonnes in short periods and one tonne is about 32,000 troy ounces, which translates to about 64 million ounce buys & sells...

it looks like they're trading not taking long term positions. or possibly they are gradually selling, as it seems there is a trend to lower holdings. it seems odd to me, though, that the ecb would be trading so much gold. i thought that the money market interventions of cb's were always more than adequate to generate profits. i also have the impression of the ecb as a conservative institution, but those moves make it look like a hedge fund throwing its market weight around.

i also note that the charts say holdings "including receivables." do you suppose the receivables are gold loans? if not, what else?

[bart]

Re: Dollar Drops to 19-Month Low Against Euro; Breaches $1.30 Level

it looks like they're trading not taking long term positions. or possibly they are gradually selling, as it seems there is a trend to lower holdings. it seems odd to me, though, that the ecb would be trading so much gold. i thought that the money market interventions of cb's were always more than adequate to generate profits. i also have the impression of the ecb as a conservative institution, but those moves make it look like a hedge fund throwing its market weight around.

i also note that the charts say holdings "including receivables." do you suppose the receivables are gold loans? if not, what else?

They're unofficially committed to selling their portion of the 500 tonne share of the Washington Agreement which has been about 100 tonnes per year if memory serves, and of course do make noise about the "barbarous relic"... but their actions sure do speak very loudly.

As you can imagine too, I'm carefully avoiding the "C" word (cartel, cabal or conspiracy) since this is data I've never seen anywhere else and don't want to unnecessarily color the "situation".

More sort of original research from the bat cave of bart... ;)

As far as the receivables, it could be loans or leases or swaps or even just "normal" dealings where the physical gold is not actually moved to the ECB's vaults.

[jk]

Re: Dollar Drops to 19-Month Low Against Euro; Breaches $1.30 Level

They're unofficially committed to selling their portion of the 500 tonne share of the Washington Agreement which has been about 100 tonnes per year if memory serves, and of course do make noise about the "barbarous relic"... but their actions sure do speak very loudly.

As you can imagine too, I'm carefully avoiding the "C" word (cartel, cabal or conspiracy) since this is data I've never seen anywhere else and don't want to unnecessarily color the "situation".

More sort of original research from the bat cave of bart... ;)

As far as the receivables, it could be loans or leases or swaps or even just "normal" dealings where the physical gold is not actually moved to the ECB's vaults.

there sure is something odd in those numbers. i wouldn't expect the sale of their portion of the 500 tons of net sales allocated to consist of 2 month swings in inventory of up to 2000 tons up or down.

i just realized what that chart reminded me of. it looks like a graph of the commercials' position in the cot report, selling the peaks and buying the valleys.

[bart]

Re: Dollar Drops to 19-Month Low Against Euro; Breaches $1.30 Level

there sure is something odd in those numbers. i wouldn't expect the sale of their portion of the 500 tons of net sales allocated to consist of 2 month swings in inventory of up to 2000 tons up or down.

i just realized what that chart reminded me of. it looks like a graph of the commercials' position in the cot report, selling the peaks and buying the valleys.

I'm not sure what to say - the Washington Agreement sales are only a small portion of the ECB's overall gold trading operations. They're two very different operations, but in the same market. I've known for quite a while that the ECB was a very large factor in the gold market much like various European banks in the '70s were, and the chart (with their own data) sure is a nice confirmation.

Good observation on the COT commercials chart similarities - no question of generally how successful that approach is.