Blanchard's latest Gold N/Ltr: Bundesbank Gold Loan Disclosure Supports Veneroso's Ground-Breaking Research
"Global Gold Market Deficit Is 700 Tonnes Larger Than Consensus Estimates -Aggregate Short Position Too Large To Be Covered"
NEW YORK, Nov. 12 /PRNewswire/
Noted international gold market analyst Frank Veneroso said today that Bundesbank disclosure of massive gold loans "confirms our view that the global gold market deficit is 700 tonnes larger than consensus estimates and that the aggregate short position in the gold market is too large to be covered... This is the beginning of a reappraisal of the gold market that will slowly unfold..."
Veneroso said that the very large amount of current gold forward sales, short sales and central bank gold loans is forcing a day of reckoning in which the demand for gold to cover all of these positions will overwhelm current supplies, greatly disrupt orderly markets and send gold's price soaring. This analysis springs from Veneroso's ongoing study of actual central bank gold loans which, he has included, are materially higher than official estimates.
Veneroso's research shows that official and private gold loans total 8,000 tonnes, far more than the 3,000 tonnes most analysts project. To put this in perspective, annual global production of gold is approx. 2,400 tonnes. This research has been developed and reported over the months in Gold Watch, a FAX advisory service published by Veneroso, and in Gold Newsletter, an investment newsletter published by James U. Blanchard III, based in Jefferson, Louisiana.
Germany's central bank, long recognized as one of the strongest supporters of gold in the central banking community, has just disclosed to a German newspaper that it has loaned on the order of 10 percent of its gold reserves to the market.
This admission, long suspected by Veneroso but not proven until now, supports his findings of huge central bank gold loans overhanging the market.
Regarding the recent crash of the gold price, Veneroso attributes "mad dog selling" by European central banks which are anticipating new gold sales rules and prohibitions to be established by the emerging European Central Bank in April 1998. European central banks are taking their last opportunity to dress up their books for admission to the European Monetary Union by selling gold.
The balance of Veneroso's research and findings will appear in a comprehensive new annual study of the gold market, The Gold Book, to be published by Gold Newsletter and Veneroso Associates in January 1998.
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