The gold carry trade

The majority of gold carry trade transactions take place on the London Bullion Market - an over-the-counter market with little-to-no transparency, writes Nick Jones.

On July 24, 1998, Alan Greenspan stood before the House Committee on Banking and Financial Services and said, "Central banks stand ready to lease gold in increasing quantities should the price rise."

That is exactly what the gold carry trade consists of. It is the process in which central banks lease out gold bullion to be sold on the open market to suppress prices.

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