My interpretation of this is that OCC is saying that the 1,071% increase in PM derivatives is just a change to the accounting system. And if you believe that I have a bridge to sell you .... Given the high level of inflation, the crashing stock market, the housing market that just fell off a cliff, and the bleak future for food, I would say bullion banks are taking extra ordinary measures to make it look like nothing is happening in the gold market. Buy with both hands.
We checked the previous OCC report for the quarter ending December 31, 2021. It showed that at year-end 2021, JPMorgan Chase had reported only $28.182 billion in precious metals derivatives versus $330.123 billion three months later – a staggering increase of 1,071 percent.
There was a footnote that attempted to explain the bizarre picture of what was going on in the gold market. It read as follows:
“Beginning January 1, 2022, the largest banks are required to calculate their derivative exposure amount for regulatory capital purposes using the Standardized Approach for Counterparty Credit Risk (SA-CCR). Under SA-CCR gold derivatives are considered precious metals derivative contracts rather than an exchange rate derivative contract resulting in an increase in reported precious metals derivative contracts compared to prior quarters….”