bullionstar.com / John Rubino / 21 Nov 2016
The following speech, by BullionStar precious metals analyst Ronan Manly, was given to an audience during a Precious Metals Seminar held at BullionStar’s shop and showroom premises in Singapore on 19 October 2016.
Good evening ladies and gentlemen, you are all very welcome to this event at BullionStar.
This evening, I will be discussing the topic of transparency versus secrecy in the gold market, and specifically looking at this transparency and secrecy by highlighting a number of areas of the gold market which claim to be transparent but which are in fact very secretive.
Transparency is an important concept in financial markets mainly because it encourages informational and market efficiency. Applied to the gold market for example, this would prevent larger gold traders having an information and trading advantage over the retail gold buying public such as ourselves. So transparency is not just an abstract concept, it has real world implications.
To illustrate this contradiction of transparency versus secrecy, I’ll look at two main sets of gold market participants:
– firstly the central bank or official sector, which includes central banks and organisations such as the International Monetary Fund (IMF) and the Bank for International Settlements (BIS),
– and secondly the wholesale London gold market as represented by the London Bullion Market Association (LBMA) and its bullion bank members.
I have chosen the official sector and the investment sector since together they represent two of the largest areas of gold ownership and gold activity globally, with central banks claiming to hold about 33,000 tonnes of gold, and bullion banks being the largest traders of gold globally.
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