While continuing to recommend against buying gold to their clients, Goldman Sachs and HSBC took major positions in physical-hold-in-your-hand gold last week.
What’s most surprising about this development is that rather than purchasing physical gold for their customers, both institutions registered the gold for benefit of their own in-house account. According to SeekingAlpha:
On August 6, 2015, Goldman Sachs (NYSE:GS) and HSBC (NYSE:HSBC) took delivery of a sum total of 7.1 tons of physical gold. No, I have not made any typographical errors. And no, I am not talking about electronic paper claims. I am talking about shiny yellow metal stuff that you can touch and feel.
The gold bars were not purchased for bank clients. They were purchased for the banks themselves. How do I know this? They are designated by the exchange as being for delivery to the bank’s “house” accounts at COMEX, not to client accounts.
Goldman Sachs, alone, took 3.2 tons worth of physical gold bars. Yet, even as the firm builds its stockpile, Goldman tells clients not to do it.
When it comes to following the most successful investors, I have found it’s a good idea to ignore what they say, and simply do as they do. When such institutions take physical possession of their gold versus gold certificates, it says a couple things. First, they are buying gold regardless of portraying themselves as bearish on the precious metal. And second, they are taking physical possession of their gold, rather than purchasing certificates. One has to wonder what they know that we don’t.
What do you think? Is it time to guy gold? Leave a comment with your thoughts below?