Monday, February 10, 2014

Gold news of the day February 10 , 2014 ..... Morgan Warns of Possible Physical Gold Shortage ....... GATA missives discussing China gold demand , gold manipulation and conrasting Venezuela's recovery of its gold in contrast to the flailing efforts of Germany !


Sprott praises GATA consultant Speck's 'The Gold Cartel'

4:22p ET Monday, February 10, 2014
Dear Friend of GATA and Gold:
On the weekly market review by Sprott Money News, Sprott Asset Management's CEO Eric Sprott explains his optimism about gold and silver prices and praises GATA consultant Dimitri Speck's new book, "The Gold Cartel," for detailing the largely surreptitious manipulation of the gold market by central banks.
Information about Speck's book is available at the Internet site of his publisher, Macmillan, here:
Sprott's interview is four minutes long and can be heard at the Sprott Money Internet site here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Gold demand in China at record

By Feiwen Rong
Bloomberg News
Monday, February 10, 2014
BEIJING -- Gold consumption and production in China expanded to records as prices that slumped into a bear market spurred sales of jewelry and bars, underlining a shift in global demand from West to East.
Usage surged 41 percent to 1,176.4 metric tons in 2013 from the year before, according to data from the China Gold Association today. Output rose 6.2 percent to 428.16 tons, making China the largest producer for a seventh year, the Beijing-based association said in an e-mailed statement.
China probably overtook India as the largest user last year, according to the producer-funded World Gold Council, which highlighted the eastward shift in global demand as holdings in exchange-traded products contracted by a record. Gold posted the biggest annual drop since 1981 last year as the U.S. Federal Reserve prepared to scale back monetary stimulus that boosted asset prices while failing to stoke inflation. ...
... For the full story:

Robert Fitzwilson: Gold manipulation continues but retreat may have begun

8:04a ET Monday, February 10, 2014
Dear Friend of GATA and Gold:
Market analyst Robert Fitzwilson tells King World News today that while the manipulation of the gold and silver markets is "alive and well," the manipulators seem to have begun another retreat with gold.
Fitzwilson concludes: "The effect of the suppression of gold and silver prices has been to pressure the mining companies to acquire funding primarily from the banks. The banks then apply pressure to the companies to sell their output at the artificially low prices. If prices for gold and silver are in the early stages of a secular rise, the companies will once again be able to generate working and exploration capital from production that will enable them to escape from the iron grip of the banks. Under those circumstances we would expect the outperformance of the sector then to be just as spectacular as was the artificially induced decline of last year."
Fitzwilson's commentary is posted at King World News here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Bron Suchecki: How bullion banks work together to minimize their need for bullion

7:45a ET Monday, February 10, 2014
Dear Friend of GATA and Gold:
London bullion banks have developed a pretty convenient system for rotating gold liabilities among themselves to minimize the need to move actual gold around or even to have gold on hand as they conduct our business. Further, we can fairly assume that if the system ever runs into difficulties, central banks, as former Federal Reserve Chairman Alan Greenspan told Congress in 1998, still "stand ready to lend gold in increasing quantities should the price rise." The London bullion banks' system is described by the Perth Mint's Bron Suchecki in commentary today at his Internet site, Gold Chat, headlined "Fractional Reserve Bullion Banking and Gold Bank Runs -- Interbank Buddies Business":
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Venezuela has its gold, if not toilet paper, but what about Germany?

12:34p ET Sunday, February 9, 2014
Dear Friend of GATA and Gold:
Responding to suggestions last week from Germany's Bundesbank that it must repatriate its gold slowly from the Federal Reserve Bank of New York for security reasons, possibly at a rate of no more than 1 tonne per week over six years --
-- GATA's friend and consultant R.M. recalls how fast Venezuela managed to repatriate its gold from the Bank of England and other banks over the same expanse of ocean in 2012.
The Bloomberg News story appended here reports on the arrival in Caracas on January 30, 2012, of the final shipment of Venezuela's gold, 14 tonnes carried on a single flight. Bloomberg quotes the president of Venezuela's central bank, Nelson Merentes, as saying: "In two months we've brought 160 tons of gold valued at around $9 billion back to Venezuela."
By contrast, the Bundesbank first planned to take seven years to recover 300 tonnes from the New York Fed. If Venezuela's pace had been adopted, the Bundesbank could have recovered those 300 tonnes in four months, and, if it has been so inclined, could have recovered its remaining 1,200 tonnes at the New York Fed in another 15 months or so.
R.M. calculates that Venezuela's final 14 tonnes were valued at the time at about $774 million, more eggs than most people would want to put in a single basket. But cargo planes, civilian and military, fly over the oceans every day, and civilian and military ships sail them every day with a safety record even better than that of cargo aircraft.
So one must suspect that security really isn't the reason for the slow pace of the Bundesbank's gold repatriation from the New York Fed -- that the reason is that, as fund manager, geopolitical strategist, and author James G. Rickards has speculated, the Bundesbank really doesn't want its gold back from the New York Fed and that the nominal repatriation is meant only to ease political clamor in Germany. Or one must suspect that, as many supposedly paranoid gold bugs believe, the German gold is no longer available, having been overcommitted in the fractional-reserve gold banking system of the Western central bank gold price suppression scheme.
Of course the latter explanation also could be why the Bundesbank might not really want its gold back any time soon. What an embarrassment, scandal, and financial loss the truth might be.
In any case, when it comes to gold repatriation, Venezuela, whose collapsing command economy lately has forced people to rush over to Colombia in search of basic foodstuffs and consumer items, mocks the famous German efficiency. Venezuela may not have toilet paper but it has its gold -- at least until it tries to raise money for toilet paper by leasing its gold to some agent of Western gold price suppression. Are Germany's gold certificates from the New York Fed worth more than toilet paper?
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
* * *
Venezuela Receives Last Shipment of Repatriated Gold Bars
By Nathan Crooks
Bloomberg News
Monday, January 30, 2012
CARACAS, Venezuela -- Venezuela today received the last shipment of gold bars in an operation that repatriated 160 tons of the South American country's reserves of the metal held abroad, said Nelson Merentes, president of the country's central bank.
Fourteen tons of gold arrived at the Caracas airport today on a flight from Europe, Merentes said. The gold bars were transported in a caravan, broadcast on state television, to vaults at the central bank, where street banners proclaimed "Mission Complete."
"In two months we've brought 160 tons of gold valued at around $9 billion back to Venezuela," Merentes said on state television from the Caracas airport. "Today marks the last day of the mission."
President Hugo Chavez in August ordered the central bank to repatriate the country's gold reserves as a safeguard against instability in financial markets. The South American country, which has the 15th largest holdings in the world, according to the World Gold Council, held 211 tons of its 365 tons of gold reserves in U.S., European, and Canadian banks as of August.
Venezuela will leave about 15 percent of its reserves, or around 50 tons, outside of Venezuela for financial transactions, Merentes said today. He said on Jan. 3 that the country would leave 15 tons of gold in banks outside the country.
A central bank report released in August showed that Venezuela held gold reserves with the Bank of England, JPMorgan Chase & Co., Barclays Plc, and Standard Chartered Plc among other banks.
"This was the largest type of operation to transport this type of metal in the last 15 years," Merentes said. "The repatriation of our gold was an act of financial prudence and sovereignty."

* * *

10 FEBRUARY 2014

Gold Daily and Silver Weekly Charts - Morgan Warns of Possible Physical Gold Shortage

All right I will confess up front, that during the day I have been watching recordings of the Winter Olympics curling matches which were held at Sochi earlier today. The women's match between the US and the Swiss was of particular interest, especially the strategy of the two teams led by their captains, Erika Brown and the legendary Mirjam Ott.

 I will not give anything away if you have not yet seen it. I will be watching the curling matches all week.  It is one of my few idiosyncrasies.  Most Americans have never heard of it.

The bit of controversy today is how much gold exactly is flowing from West to East, most specifically to China?

Bloomberg had a piece in print today about the record amount of gold that was imported by China last year through Hong Kong, exceeding 1,000 tonnes for the first time.  You may read it here.

What was even more interesting were the gold bullish comments that were made by two guests, one from Pimco and the other by Ed Moy, the chief strategist at Morgan Gold.  I include the interview below. He notes that there is concern about a physical gold bullion shortage.
"Quantitative easing has had a distorting effect on the price of gold...Overall when you look at gold, there are two separate pieces here. One is how the West looks at gold, and they have been investing in a lot of electronic derivatives and proxies for gold. Whereas the East has been buying a lot of physical gold. That demand has actually gone up. China looks like it bought 1,000 tonnes in 2013 making them the number one buyer in the world

Do you have a concern about a possible gold shortage? 


How ironic, now that JPM has hammered the paper price of gold down and covered their shorts, and are said by some informed analysts to be sitting net long gold.  Classic.

Koos Jansen has an even better, more comprehensive article discussing the China gold action through Shanghai. The Shanghai Gold Exchange delivered 2,181 last year.   And this may not include official gold purchases by the People's Bank of China.  You can read that piece here.

I still think that most of the mainstream media and analysts are still missing the big macro trend change in gold buying by the central banks, and the reasons for it.  And you know that I think that many of them do not get it, because they do not wish to get it.  It is dangerous to imagine that the status quo may change.

Gold is moving from West to East.  And the time is coming when all will be revealed, when the paper gold market freezes up in shock, and the call from the world is made, stand and deliver.