A recent report that the Bank for International Settlements loaned billions of dollars backed by gold to commercial banks in recent months has sparked a rush of surprise, confusion and rumors in the gold world.

The news jolted gold traders, who were nervous about the sudden transfer of almost 20 percent of the world's annual gold production and the possibility of a sell-off, Britain's Daily Telegraph reported.

Most of the loans, known as gold swaps, were conducted with European banks in exchange for foreign currencies, mainly U.S. dollars, according to data released in the BIS's annual report, The Wall Street Journal recently reported.

In a tiny footnote in its annual report, the bank disclosed its unusually large holding of gold, compared with nothing the year before. The disclosure was a large factor in the correction of the gold price this week, which fell below $1,200 for the first time in more than a month, the Telegraph reported.

Concerns hinged on whether the BIS could potentially sell on this vast cache of bullion in the event of a default, flooding the market with liquidity. It appears to have raised $14 billion for whoever's been doing the swapping – serious liquidity in the gold market, the Telegraph reported.

The day after original reports about the swaps, BIS emailed a statement saying that the swaps had not been conducted with monetary authorities but purely with commercial banks.

This did nothing to quell the sense of mystery. It is almost inconceivable that a single commercial bank could have accumulated so much gold alone. And cynics have suggested that the whole affair still looks like a secretive European bailout that a single country wants to keep quiet.

In this case, one or more of the so-called bullion banks – which act as wholesale market-makers and include Goldman Sachs, Deutsche Bank, JP Morgan, HSBC, Barclays, UBS, Societe Generale, Mitsui and the Bank of Nova Scotia – would have agreed to act on behalf of a monetary authority, the Telegraph reported.

This would add an extra layer of anonymity. "So the BIS swaps look like a tripartite transaction," writes Adrian Douglas of the Gold Anti-Trust Association. "The commercial bank or banks made a swap with a central bank or banks and then the commercial bank or banks made a swap with the BIS."

It isn't clear what prompted the banks to borrow from the BIS instead of their central banks. "It's odd, but it could be bad," Andy Smith, senior metals strategist at Bache Commodities Group in London, told the Journal.

Analysts said the time of the swaps, most in January, coincides with a flare-up in worries about a sovereign-debt crisis in Greece spreading across Europe.