On November 12, 2003, the BIS released its regular semi-annual report on the OTC derivatives of major banks and dealers in the G-10 countries for the period ending June 30, 2003
The total notional value of all gold derivatives, which had risen from $279 billion at mid-year 2002 to $315 billion by year-end, declined to $304 billion as of June 30 this year. Translated into estimated tonnes, these figures are as follows: forwards and swaps ($134 billion versus $136 billion at year-end 2002) and options ($169 billion versus $180 billion at year-end 2002) as reported in table 22A of the recently published December issue of the BIS Quarterly Review
Also released are the gold derivatives in tonnes held by U.S. commercial banks as of September 30, 2003, as reported by the Office of the Comptroller of the Currency
Held almost entirely by J.P. Morgan Chase, Citibank and HSBC USA, the total notional value of these gold derivatives rose in the third quarter to $80.9 billion from the roughly $70 billion level where they had been holding since year-end 2002. The third quarter increases were spread across all three major U.S. bullion banks.
So JPM increased its gold derivative position, eh? What do you suppose will happen if gold goes to $450?