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In Summary

This report has reached the conclusions that:

• Central Bank gold loaned into the market is a major source of supply.
• No statistics providing accurate levels of loaned and swapped central bank gold are publicly published by countries or the IMF, but instead “estimated” loan levels and impact are done by outside sources and those “estimated” levels vary from source to source.
• The levels of gold loaned in the market can significantly impact the price.
• Central banks actively manage their gold loans, but do not supply the market with this information.
• Bullion banks have significant advantages over the investing public in understanding the market impact of gold lending.
• Countries supply accurate (but not timely) information on gold sales and purchases.
• IMF reviews have shown that central bank accounting for gold reserves is inadequate.
• IMF reviews have suggested, but not yet acted upon, recommendations for changing the accounting treatment of gold reserves. If adopted, IMF accounting changes are the beginning to a new, transparent gold market.
• Finally, for the market to be transparent for all, central bank loaned gold levels need to be reported to ALL market participants on a quarterly, if not monthly basis. Loan information is available to be published; it is simply not required to be published. The IMF has the ability to make this requirement and change the gold market for the better for all participants. Blanchard and Company believes that this simple change to our market will allow all market participants to begin to realize not only greater gains in their gold investments, but the ability to make smarter decisions on when and how to invest. Gold has made incredible gains in the past few years in a market that is still not completely transparent; this change has the ability to increase those gains immeasurably.

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