by Chris Powell, GATA:
Dear Friend of GATA and Gold:
Tocqueville gold fund manager John Hathaway’s new investor letter attributes the recent fall in the gold price to a bear raid by investment banks and hedge funds doing naked shorting.
“Gold was rarely, if ever, delivered to a buyer,” Hathaway writes. “Trades were settled in cash. The notional amounts of the transactions on many days exceeded annual mine production, absurd on the face of it. The motive was most likely to break the gold price for profit. The result is that short positions of these traders are higher than at the bottom in 2008, after which gold rallied 167 percent and mining shares 256 percent (basis XAU).”
Hathaway also acknowledges gold’s function as insurance against the failure of the policies of central banks and speculates that the Federal Reserve can’t return the German Bundesbank’s gold because the Fed has rehypothecated it into oblivion.
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