I don't know the facts --- I am speculating, and not without good reason, that when the repayment time comes the CB will accept cash in lieu of gold. Sure, it will then be reflected as a gold sale but the bank does not know that prospectively.
If you have read my posts I have said repeatedly that the same gold is then sold TWICE -- once by the miner/speculator and once by the CB, in lieu of the gold repayment. In any event, the actual figures reflect CB sales as the smallest component of total gold supplies.
There's nothing dishonest about receiving cash, at market value, for an asset. It is terribly simple, as you say. That's why I don't know why you are arguing with me.
My concern relates both to how the banks receive payment or repayment, and to the actual short position. For months/years I have heard how very short the market is --- amounts quoted range between 3000 and 14,000 tonnes. Yet, despite increasing jewellery and investment demand (ex WGC), I do not see any impact of apparent short covering on POG. So, I wonder (1) just how short the market actually is and (2) whether some means exists for short covering other than purchase on the market. Clearly, if miners have sold forward then that amount of production is unavailable but, as far as I can see, there is no reduction in production in the quoted statistics --- only an increase. So, I am speculating that the shorts are able to by their gold loans back for cash.
If you have an answer I would appreciate you telling me. |
