The ‘Big Long’ Gets Bigger As Goldman And HSBC Gobble Up Tons More Gold

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Summary

Goldman Sachs and HSBC buy up a couple more metric tons of gold – now 9.23 tons and counting.

The Volcker rule does not, and never will, prohibit banks from engaging in proprietary trading in physical gold, silver, or platinum bullion.

The Volcker rule won’t go into effect against big-bank-owned hedge funds until June 2017.

When bank-funded and -controlled hedge and private equity funds are finally subject to Volcker’s rule, it should result in significant upward pressure on the price of bank metals.

What happens next is that the price of bank metals will rise considerably, even in the absence of a collapse of the worldwide bond bubble.

The Big Long was big already. It just got bigger. In the previous article, I noted that Goldman Sachs (NYSE:GS) and HSBC (NYSE:HSBC), had taken delivery of a staggering 7.1 metric tons of physical gold in August, 2015. Since then, they’ve gobbled up tons more.

As of Wednesday, Goldman Sachs bought 142,100 troy ounces (4t 419.8040 kg.) worth of physical gold bars into its proprietary trading account at CME, Inc. HSBC bought a total of 154,800 troy ounces (4t 814.8181 kg.). The two banks have now scooped up approximately 9.23 tons worth of hard metal.

These physical gold bars are headed into the banks’ own vault. That’s what the banks say. They are being purchased as a proprietary trade. That’s what the COMEX exchange says. We know this because commodities regulations require that clearing firms declare the intended ownership of such deliveries.

To better understand what I am talking about, let me explain a few things about how clearing houses work. All clearing brokers who are active at any CME, Inc. exchange, including COMEX, have both a house and a customer account registered with the exchange. The “house account” is the “clearing firm’s proprietary, non segregated trading account.”

You read that correctly. The words are “PROPRIETARY TRADING”! No, they are not my words, but the words…

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