Very interesting a big jump in Gold swaps by the BIS (Bank of Int Settlements) after Golds rise after March 2016. They had 0 balance on the books.
The use of gold swaps by the BIS increased in the financial year ended March 31, 2011, with 409 tonnes of gold swaps reported. As this chart will show, that was the peak amount reported by the bank prior to this year:
March 2011: 409 tonnes.
March 2012: 355 tonnes.
March 2013: 404 tonnes.
March 2014: 236 tonnes.
March 2015: 47 tonnes.
March 2016: 0 tonnes.
As the table shows, the use of gold swaps by the BIS fell considerably up to March 2016, when the use of swaps appeared to have stopped.
There is not enough information in the monthly reports to calculate the exact amount of swaps, but based on the information in the BIS' December 2016 statement of account, the bank's gold swaps likely stood in excess of 480 tonnes as of the end of the calendar year.
This is the BIS' highest level of gold swaps recorded in recent times.
Either these swaps were used to manage the market or to help some banks with financial stress??
www.ft.com/cms/s/0/3e659ed0-9b39-11df-baaf-00144feab49a.html
Here are excerpts from the article:
"Some analysts speculated that the swap deals were a surreptitious bailout of the European banking system ahead of last week's publication of stress tests. But bankers and officials have described the transactions as 'mutually beneficial.' ...
"'The client approached us with the idea of buying some gold with the option to sell it back,' said one European banker, referring to the BIS.
"Another banker said: 'From time to time central banks or the BIS want to optimize the return on their currency holdings.'"
It is notable that none of these comments in the FT article focused on the gold market itself but implicitly accepted that gold was being used as collateral to support dollar loans to commercial banks.
An alternative explanation -- that the swap transactions were initiated by the BIS to place more unallocated gold in the hands of certain central banks -- seemed plausible, since the gold market was tight at the time.