http://www.silverdoctors.com/silver-shortage-intensifying-will-result-in-a-buying-panic/#more-22712
and here is a counterargument that price could go lower despite high physical demand......
http://www.tfmetalsreport.com/blog/4551/forewarned-forearmed
http://www.caseyresearch.com/gsd/edition/south-korea-adds-20-tonnes-of-gold-to-reserves-in-february/
SILVER SHORTAGE INTENSIFYING, WILL RESULT IN A BUYING PANIC
When it comes to real physical “hold in your hand” metal, there is NO ONE sellingand here is a counterargument that price could go lower despite high physical demand......
http://www.tfmetalsreport.com/blog/4551/forewarned-forearmed
Forewarned is Forearmed
Just because, as you know, I certainly don't have all the answers.
So, here's the deal. You know I'm always going to be long-term bullish and I'm always going to be intermediate-term bullish, too. I'm even almost always short-term bullish simply because the fundamentals are so overwhelmingly positive. To that end, when we get steep declines like we've had over the past four months, I'm always going to looking for The Bottom...that moment in time when it's safe to return to the water.
As you know, I'm currently:
- Closely watching the CoT every week
- Monitoring open interest changes daily
- Checking not just the charts but other technical indicators such as RSI and MACD
- Following other "commodities" for signs of bottoms and trend change
- Trying to get to the bottom of this "is it or is it not backwardation" deal
Because I am a strong believer that fundamentals ultimately drive markets AND an equally strong believer that The Bullion Banks actively manipulate and suppress price on behalf of global central banks, I see the current selloff as unsustainable. The never-ending fiat currency devaluation is leading to ever-increasing, global demand for gold and silver, particularly from creditor nations with substantial dollar reserves. I know this to be true and and this belief is reinforced by almost-daily media reports of central bank gold purchases. Bullion bank price suppression has now driven price to the point where future, significant selling seems unlikely.
It can happen, though.
Look, I stated about 75 words ago that I am a strong believer "that The Bullion Banks actively manipulate and suppress price on behalf of global central banks". Just who am I to say that they can't take price down even farther? In a post-MFG world where open interest (market participation and liquidity) has declined well over 30% from just 2-3 years ago, who's to say that the BBs can't do just about anything they want? Again, physical demand should prevent this but the italicized, operative word there is "should". I can't say for certain that it will.
To me, the main caution signal emanates from JSMineset. Santa has been warning for weeks that a "washout" that would "test the resolve of every bull" was coming. Heck, he's even formed this "Comet Gold Resistance Movement" in an attempt to give stackers the wherewithal to stand firm in the face of any coming volatility.
And then you've got Santa's old friend, Trader Dan, castigating me for searching for a bottom here and criticizing my efforts to find a bottom through the use of Sandeep's gold basis methodology. Not trying to reach too far here but, if Jim senses (knows?) that a major selloff is still coming, wouldn't you think he'd share that information with his old friend, Trader Dan? By calling me out, was Dan trying to save me the embarrassment of searching for a bottom just as the rug is pulled out from underneath the market?
And furthermore, what do you make of this? A learned and wise friend sent me this in an email earlier today. Because I haven't yet gotten permission from him to C&P and use his name, we'll just call this an "anonymous source". The wisdom and thinking here is pretty clear and must be fully considered:
"It is a matter of basic arithmetic/economics that there is a bullish and bearish scenario for both contango and backwardation. Putting aside which scenario I find most plausible, I find it alarming when commentators show no awareness of the existence of the other argument.
Specifically, backwardation in the current environment of falling prices is precisely what one would expect to see in a sector which is about to crash. The lower-and-falling futures price is telegraphing the collapse of the market.
I'm not meaning to single-out you and Andrew Maguire here, as this is something I'm seeing/reading everywhere. I just happened to be listening to your clip today. However, if the bankers should be successful in engineering another Crash-of-'08 collapse in metals prices, all such commentators will lose credibility.
Just like all the mainstream clowns in 2008, they will say they were "surprised" by the collapse of prices - despite the fact that futures prices were telegraphing that price-collapse through backwardation in a falling market.
Note backwardation in a rising market implies the opposite. It implies precisely what you, Maguire and others have been saying -- a "tight market".
Obviously metals prices should be going straight up given all the new-and-escalating money-printing. However, when we're telling people "what the market is saying" (these absurdly manipulated/fraudulent markets), at the very least we have to acknowledge what is being suggested: that bullion prices are about to collapse."
Specifically, backwardation in the current environment of falling prices is precisely what one would expect to see in a sector which is about to crash. The lower-and-falling futures price is telegraphing the collapse of the market.
I'm not meaning to single-out you and Andrew Maguire here, as this is something I'm seeing/reading everywhere. I just happened to be listening to your clip today. However, if the bankers should be successful in engineering another Crash-of-'08 collapse in metals prices, all such commentators will lose credibility.
Just like all the mainstream clowns in 2008, they will say they were "surprised" by the collapse of prices - despite the fact that futures prices were telegraphing that price-collapse through backwardation in a falling market.
Note backwardation in a rising market implies the opposite. It implies precisely what you, Maguire and others have been saying -- a "tight market".
Obviously metals prices should be going straight up given all the new-and-escalating money-printing. However, when we're telling people "what the market is saying" (these absurdly manipulated/fraudulent markets), at the very least we have to acknowledge what is being suggested: that bullion prices are about to collapse."
So, what's the point of all this? Let's go back to where this thread began. I don't pretend to have all the answers and I'm not going to try to convince you that I do. Oh sure, I'm bullish. Long-term, I firmly believe that the metals are going to be revalued multiples higher as a new, global financial regime overtakes the current, dollar-based system. In the very short term, however, nobody knows what's going to happen. We can guess at things based off of years of experience but the future, both short and long term, will be influenced by an almost infinite number of variables. I will continue to tell you what I think...that's my job. But it is your job to fully consider not just what I think but every other information source that you perceive to be valuable. My hope is that posts such as this will serve to keep you on your toes...diligent and vigilant, yet confident in your plans for The End of The Great Keynesian Experiment.
TF
http://www.caseyresearch.com/gsd/edition/south-korea-adds-20-tonnes-of-gold-to-reserves-in-february/
¤ YESTERDAY IN GOLD & SILVER
The gold price chopped around in about a five dollar price range through all of Far East and most of London trading on Wednesday. Then around 9:00 a.m. in New York, the price headed for its low of the day...$1,566.40 spot...which came around 9:45 a.m. Eastern time. The subsequent rally lasted until 11:00 a.m. Eastern, which was the London close.
That ended the rally...and the price got sold down until shortly before 1:00 p.m. in New York. From there, the price rallied throughout the entire electronic trading session, closing very close to its high of the day...which Kitco recorded as $1,586.10 spot.
Gold closed at $1,584.50 spot...up $9.10 on the day. Net volume was pretty decent...around 149,000 contracts.
In a nutshell, the trading action in silver was very similar to gold, except far more 'volatile'. Silver's 9:45 a.m. Eastern time low was $28.45 spot...and it's 11:00 a.m. Eastern high was $29.25 spot.
The silver price managed to close above $29...but just barely...at $29.04 spot. Volume was around 42,000 contracts.
Here are the platinum and palladium charts. Once again they acted like they were trading on some other planet.
The dollar index opened on Wednesday in the Far East at 82.07. From there it sank to its low of the day...81.94...at exactly 2:00 p.m. in Hong Kong. The subsequent rally lasted until minutes before 5:00 p.m. Eastern time, where it printed its high of the day at 82.60. From there it sold off a hair into the close, finishing the Wednesday session at 82.55...up 48 basis points from Tuesday.
Obviously there was no correlation between the dollar index and the gold and silver price action on Wednesday.
* * *
The CME's Daily Delivery Report showed that 58 gold and 23 silver contracts were posted for delivery on Friday within the Comex-approved depository. The major players were Jefferies, JPMorgan Chase and Canada's Bank of Nova Scotia. The link to yesterday's Issuers and Stoppers Report ishere.
There were no reported changes in either GLD or SLV yesterday...and the U.S. Mint had no sales report either.
The good folks over at Switzerland's Zürcher Kantonalbank updated their gold and silver ETF numbers as of the close of business on Tuesday. Their gold ETF showed a decline of 35,507 troy ounces, but their silver ETF showed an increase of 994,648 troy ounces. That's a lot!
The Comex-approved depositories reported receiving 406,382 troy ounces of silver on Tuesday...and they also shipped 498,192 troy ounces out the door. The link to that activity is here.
selected news and views......
With Legal Reserves Low, Bank of America Faces a Big Lawsuit
Bank of America has been underestimating its legal risks for years, and brazenly so, according to its critics. Is that strategy about to pay off with the Federal Reserve?
On Thursday, the Fed will release figures on how much capital the nation’s biggest banks must have to cover a “stress” situation. The following week, investors find out whether those banks will be able to return more of their capital to shareholders by paying dividends or buying back stock.
Last year, the Fed passed most of the big banks and let them pay out billions. Bank of America, sensing a request would be unwelcome, didn’t even ask. This year, however, Wall Street expects that Bank of America will get the green light.
This story was posted on The New York Times website at noon Eastern time yesterday...and I thank Phil Barlett for sharing it with us.
Obama asks Gensler to serve second term at CFTC
President Barack Obama has asked Gary Gensler to serve a second term as the head of the top U.S. derivatives regulator, a person familiar with the situation said, but Gensler has not yet decided if he will stay.
The 55-year-old Gensler would in any case remain the head of the Commodity Futures Trading Commission (CFTC) until his current term expires in December, the person said on Tuesday, speaking on the condition of anonymity.
But Gensler, known for his aggressive implementation of a Wall Street overhaul, was also interested in a position elsewhere in the administration, said the Wall Street Journal, which first reported the story.
I'm not sure whether we should be laughing or crying. This item first appeared in The Wall Street Journal yesterday...and was reprinted in this Reuters article that was posted on their Internet site at 9:00 a.m. India Standard Time. The first person through the door with this story yesterday was Washington state reader S.A...for which I thank him.
BOE’s King Says Government Should Split Up Royal Bank of Scotland, Accept Loss
“We’re four and half years on and there’s no sign of it going back to the private sector,” King told the Parliamentary Commission on Banking Standards at a hearing in London today. “That indicates we’ve not been sufficiently decisive in recapitalizing or restructuring it.”
RBS should be split into a so-called good bank that could fund itself and a bad bank, where loss-making assets would be transferred, King told lawmakers today. That would require the lender to accept losses on some assets, he said.
The government is pressing Edinburgh-based RBS to sell assets and bolster capital as it tries to recoup some of the £45.5 billion (US$69 billion) it pumped into the lender in the biggest bank bailout in the world. Chief Executive Officer Stephen Hester has cut assets by £907 billion, eliminated 36,000 jobs and scaled back the securities unit since he took over from Fred Goodwin. The stock still trades for less than the price the government paid for it.
This Bloomberg story was filed from London yesterday...and was posted on their website yesterday morning Mountain time...and I thank Manitoba reader Ulrike Marx for her first offering in today's column.
Ireland and Portugal set for debt deferral
Ireland and Portugal are to be given more time to repay their emergency loans with both countries seen as good pupils in following the imposed austerity programme.
An EU finance ministers meeting Tuesday (5 March) noted that "both countries have taken successful steps to re-enter the markets."
They discussed how best to help the two countries to "exit" their bailout programmes.
Officials from the European Central, European Commission and the International Monetary Fund - the so-called Troika - will now discuss how to "smooth" their debt repayments.
This article was posted on the euobserver.com Internet site early yesterday morning Europe time...and it's courtesy of Roy Stephens.
French and Italian debt chiefs warn on EU Tobin Tax
Both France and Italy have been keen advocates of the new Financial Transaction Tax (FTT) proposed by Brussels last month, claiming that it will raise money and curb speculation. But they may have overlooked the unintended effect on their own borrowing costs.
Maya Atig, acting chief of French debt agency, said the European Commission’s internal documents acknowledge that the FTT could drain liquidity in the bond markets by 15pc, an effect that would push up yield spreads and raise debt costs.
Brussels estimates that the tax will raise €30bn to €35bn each year for the eleven EU states taking part, but Mrs. Atig told a Euromoney conference in London that any revenue would offset “the extra costs that we might have to pay”.
This Ambrose Evans-Pritchard item was posted on the telegraph.co.uk Internet site yesterday afternoon GMT...and it's another story courtesy of Roy Stephens.
Egypt suspends parliamentary elections
An Egyptian court on Wednesday suspended the country’s parliamentary elections, scheduled for April 22, and referred the amended electoral law to the Supreme Constitutional Court for review, throwing the country deeper into political turmoil.
An Egyptian court threw the timetable for parliamentary elections due to start in April into confusion on Wednesday, ordering the cancellation of President Mohamed Mursi's decree calling the vote.
The Administrative Court referred Egypt's amended electoral law, under which the controversial lower house polls are due to be held, to the Supreme Constitutional Court for review.
This Reuters article was posted on the france24.com Internet site yesterday...and it's another offering courtesy of Roy Stephens.
Kuroda to Hit ‘Wall of Reality’ at BOJ, Ex-Board Member Says
Haruhiko Kuroda will have limited options for aggressive easing if he’s confirmed as central bank governor as more Japanese government bond purchases heighten the risk of a market bubble, a former BOJ policy board member said.
“Kuroda will hit the wall of reality,” Atsushi Mizuno, vice chairman at Credit Suisse AG in Tokyo and a member of the BOJ board from 2004 to 2009, said in an interview today. “Increased bond buying would cause over-dependence on the BOJ and that’s not healthy for the market. I see the risk of a JGB bubble.”
“My concern is that Kuroda is over-emphasizing a bit too much his will to end deflation without explaining his plan for an exit strategy,” Mizuno said. “From the start he will try to do something new, but I expect he will eventually return to an extension of the current policy framework.”
This Bloomberg story was filed from Tokyo yesterday...and posted on their website just after midnight on Wednesday Mountain time. I thank Ulrike Marx for bringing it to my attention...and now to yours.
Three King World News Blogs
The first blog is with John Embry...and it's headlined "Massive Silver Short Positions to Force COMEX Default". The next interview is with Jim Sinclair. It's entitled "Paper Markets to Disappear as Gold War Rages". Lastly is this blog with Richard Russell...and it bears the title "I've Never Seen Anything Like This in History".
South Korea adds 20 tonnes of Gold to reserves in February
Asia's fourth largest economy, South Korea added 20 tons of gold last month, the fifth purchase since July 2011, to raise country's gold holdings to 104.4 tons.
According to Korea's central bank, the Bank of Korea (BOK), country's gold reserves value hit $4.79 billion out of the total value of $320 billion.
The bank said the move was a part of it's efforts to diversify the portfolio of its foreign exchange reserves
South Korea renewed gold purchases in July 2011 after a gap of thirteen years. Since then it bought gold in November 2011, July and November 2012.
The only unknown is whether the gold is safe in their own vaults, or sitting in an unallocated gold account at the Bank of England. Obviously there is a big difference...and hopefully we'll find out some day. This must read story was posted on the bullionstreet.com Internet site late in the morning India Standard Time...and I thank Marshall Angeles for his final offering in today's column.
Jan Skoyles: The Mexican standoff -- gold, Banxico, and the Bank of England
Picking up on financial journalist Guillermo Barba's report last month about clamor for the Bank of Mexico's phantom gold reserves to be audited and Alasdair Macleod's calculation that the Bank of England can't be holding as much official gold as generally thought, Jan Skoyles of The Real Asset Co. in London today reflects on the dilemma facing central banks that get caught in their own or someone else's fractional-reserve gold banking system.
I found this story in a GATA release yesterday...and I thank Chris Powell for wordsmithing all of the above. The commentary was posted ontherealasset.co.uk Internet site yesterday.
Azerbaijan to increase gold reserves
In January this year, Azerbaijan acquired gold bullion for the first time in more than three years.
An additional 1 tonne of gold was purchased by the State Oil Fund of the Republic of Azerbaijan on March 1. This was temporarily stored in the vaults of the Central Bank of the Republic of Azerbaijan.
Around 17,422 kilo was included into the State Oil Fund of Azerbaijan (Sofaz) investment portfolio as of March 1, 2013.
In a repatriation process, Sofaz had started placing its gold reserves in the vaults of the Central Bank of Azerbaijan in Baku.
This short must read story, filed from Mumbai yesterday, was posted on themineweb.com Internet site...and I thank Ulrike Marx for sending it.
China's SGE to launch after-hours trading in Gold and Silver
In yet another attempt to gain further foothold in global futures trading, China's leading commodities exchange, the Shanghai Futures Exchange said it would launch after-hours trading this year including in gold and silver.
The exchange said it will further boost its international ambitions by expanding the list of futures contracts in the coming years, including crude oil.
The extended trading hours will bridge the gap between domestic investors and foreign markets, and will align the exchange with international practices, according to an SGE statement.
The Shanghai Futures Exchange has 10 trading categories, including gold, silver, copper and aluminum.
This short story is another one from the bullionstreet.com Internet site yesterday afternoon IST. It was filed from Shanghai...and I thank Ulrike Marx for this contribution as well.
¤ THE WRAP
It was an interesting day in both gold and silver during the New York trading session yesterday...and I'm not sure what to read into it, if anything. However, I was more than impressed with the performance of the shares in light of the price action...and it sure looks like a bottom was set on Tuesday.
The news that South Korea added to its gold reserves...and Azerbaijan is going to do the same thing, is certainly continued proof that a lot of the world's central banks are really getting serious about converting paper assets into the real deal...this despite the ongoing paper price antics on the Comex.
Nick Laird pointed out that both gold and silver were in slight backwardation going out about from a few months in gold, to a year in silver. We saw severe backwardation develop in silver several years ago...and it amounted to nothing, despite what the so-called 'experts' were saying at the time...so it remains to be seen whether it will amount to anything this time around. Ted Butler said back then that the 'powers that be' can manufacture backwardation if they wish to do so...and said it meant nothing...and he turned out to be the only one who really knew what he was talking about, much to my dismay.
Tomorrow we get the anxiously-awaited [at least by Ted and myself] Commitment of Traders data for the reporting week that ended at the Comex close on Tuesday...and I'll have a full report on that in this column on Saturday.
The price action was pretty dead in the Far East during their Thursday...and the same can be said about the first two hours of trading in London as well. Volumes are on the lighter side...and the dollar index is down about 22 basis points as I hit the 'send' button at 5:10 a.m. Eastern time.
It looks like another day where any significant price activity will occur during the New York trading session.
See you on Friday...or Saturday if you live just west of the International Date Line.
¤ THE WRAP
It was an interesting day in both gold and silver during the New York trading session yesterday...and I'm not sure what to read into it, if anything. However, I was more than impressed with the performance of the shares in light of the price action...and it sure looks like a bottom was set on Tuesday.
The news that South Korea added to its gold reserves...and Azerbaijan is going to do the same thing, is certainly continued proof that a lot of the world's central banks are really getting serious about converting paper assets into the real deal...this despite the ongoing paper price antics on the Comex.
Nick Laird pointed out that both gold and silver were in slight backwardation going out about from a few months in gold, to a year in silver. We saw severe backwardation develop in silver several years ago...and it amounted to nothing, despite what the so-called 'experts' were saying at the time...so it remains to be seen whether it will amount to anything this time around. Ted Butler said back then that the 'powers that be' can manufacture backwardation if they wish to do so...and said it meant nothing...and he turned out to be the only one who really knew what he was talking about, much to my dismay.
Tomorrow we get the anxiously-awaited [at least by Ted and myself] Commitment of Traders data for the reporting week that ended at the Comex close on Tuesday...and I'll have a full report on that in this column on Saturday.
The price action was pretty dead in the Far East during their Thursday...and the same can be said about the first two hours of trading in London as well. Volumes are on the lighter side...and the dollar index is down about 22 basis points as I hit the 'send' button at 5:10 a.m. Eastern time.
It looks like another day where any significant price activity will occur during the New York trading session.
See you on Friday...or Saturday if you live just west of the International Date Line.
http://therealasset.co.uk/mexico-gold-bars-banxico/
The Mexican standoff: Gold, Banxico and the Bank of England
Late last month it was reported that Mexico are going to organise an audit of their gold stored at the Bank of England.
Financial journalist Guillermo Barba, writes that that the Mexican Superior Audit of the Federation (“ASF” in Spanish) has made an official ‘recommendation’ that the Bank of Mexico “should “make a physical inspection with the counterparty that has the gold under its custody, in order to be able to verify and validate its physical wholeness and the compliance with the terms and conditions of dealing with this Asset…” It was verified by the ASF that this has never been done by Banxico.”
It turns out the Banxico, aren’t really even that sure how many gold bars they own.
Barba’s concern, along with many other individuals and countries, is that the gold may not even be there. In documents received by Barba, from Banxico, reference is made to the London Bullion Market Association which he finds ‘disquieting.’ This is of course down to the fractional reserve system which large bullion banks operate on. This can, of course, only survive if the countries don’t come running for their gold at the same time.
The gold stored at the Bank of England came under (weak) media scrutiny at the beginning of the year when Germany announced that it would be bringing back some of its gold, not from the Bank of England, but from Banque de France and the Federal Reserve.
At the time many speculated that the gold held at the Bank of England was not being returned to Germany as storage was not being charged for and it ‘made economic sense’. In case anyone was in any doubt as to the existence of the gold the Queen of England was rolled out for a photo-op, just to reassure any doubters around the world.
It’s clear that Queen Elizabeth II’s visit did not do enough to put the Mexicans’ minds at rest.
The news of Germany’s repatriation, and now Mexico’s audit request should not be big news.
The fact that it is news shows what idiots central bankers have been. These various central banks are now thinking maybe they should have paid better attention to the quality, location or even existence of the gold.
Gold bullion storage on Threadneedle Street
Historically it seems a gentleman’s agreement has been enough to guarantee the existence of your gold in another central bank.
Mexico has, according to official figures, 125 tonnes of gold bullion, 95% of which is held abroad and 99% of this is held on Threadneedle Street. The gold represents a mere 4% of Mexico’s reserves, and works out at just over 1.12g per capita.
Mexico doesn’t just hold gold abroad it’s also increasing in the production stakes. Whilst silver is the country’s mining cash cow, Mexico is also the world’s tenth largest producer of gold. By 2014, the World Gold Council (WGC) estimate it will be producing approximately 75 tonnes a year – an 80% increase in production since 2007. Between 2010 and 2011 gold production increased by 22% meaning Mexico had the world’s highest growth rate in terms of production. At present gold production only accounts for 0.38% of GDP.
Back in 2011, the country made headlines when they bought nearly 100 tonnes of gold between the February and March. At the time it was, and remains, one of the largest single, monthly purchases by a central bank in recent history.
The Bank of Mexico indicated that the decision to invest in gold was as part of a decision to divest the country’s reserves which had rapidly expanded from approximately $75 billion to $120 billion between Q1 2007 and Q1 2011.
Buying up gold reserves is one thing, it is often explained away by it being good practice to diversify the country’s reserves. But nowadays increasing numbers of people see that as showing a concern for currencies – whether your own or the dollar.
But to ask for an audit or to repatriate it makes it almost personal that one country to another doesn’t have any trust.
What’s made the Mexican ASF decide now is the right time to start asking questions about their gold?
Along with all other fiat currencies across the world, the Mexican peso is rapidly losing value. But not a significant amount more than the British Pound.
As we wrote a while back, in 5 reasons why a country would repatriate their gold, one of the reasons to start checking up on your gold is when you don’t trust the custodian country to look after their own currency. Recent developments in the British pound may go some way to explaining ASF’s move.
Perhaps Mexico foresaw the drop in the British pound, ahead of the Moody rating announcement and thought they should start paying more attention to their most precious assets. In fact this month gold is down against the MXN, compared to the pound in which it is up.
The Bank of England should be held solely responsible for the devaluation of the pound. Things are so bad, that the pound is only one of two currencies which is down against gold at the moment.
Despite the loss of the long-held and cherished triple-A rating, the Bank of England still remain set on weakening the British Pound, both the outgoing and incoming governor appear keen to carry on with QE, even discussing increasing it.
Can you trust the Bank of England?
Another reason we believe explains the investigations into gold holdings is that you don’t trust the gold might actually be there.
As Alasdair Macleod explained in a recent article, the Bank of England is one of the most trusted in the world and ‘oversees the largest bullion market by far.’
However, as Mr Macleod concludes (and Barba mentioned earlier), that , ‘on the basis of reasonable supposition it appears that the total amount of monetary gold at the Bank of England, including that of Germany, Austria and Mexico and the UK’s own stock, cannot be more than 3,320 tonnes, perhaps significantly less. The belief that the world’s central banks store a significant amount of their gold in London is therefore incorrect. This raises two interesting questions: where is it all, and does it actually exist?’
At the moment Mexico is at risk of non-payment, until the gold’s existence is at least verified and then brought back to home soil, how will they really know that their reserves are safe?
Mexico’s on-going gold investment
Last week it seemed we couldn’t read anything on gold that wasn’t declaring the end of the bull market. Yet when booming emerging economies are not only checking up on their gold, but also stocking up on it we have to wonder if these analysts in their dollar-funded towers really know what’s driving this bull-market.
Whilst the price might be lying low we should bear in mind that we shouldn’t just look at its price. We should also be looking at what the fundamentals to gold are doing. Central banks’ relationships with gold have been one of the top drivers for gold over the last few years, increasingly so. When they’re not buying up hundreds of tonnes, it doesn’t mean they’re no longer interested.
As chatter of currency wars hots up just look out for other central banks talking about getting their houses in order.
Do you think Mexico, or any other central bank, will be looking to bring their gold back? Let us know in the comments below
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