Gold
is being beaten up on the television set, in the newspaper, in the
interwebs as the dollar price is launguishing painfully low for bullion
bankers.
Here are the GoldSilver team's 4 near term datapoints:
1;
The Chinese took in at least a net 45.5719 metric tons (mt), or 1,607,500 troy ounces of gold via Hong Kong for the month of January;
taking in 51.303mt, yet sending back to Hong Kong some 7.731mt of gold
AND something they lump in the same category called “current coin.”
2;
The head of commodities at Standard Bank, Johannesburg, South Africa is seeing heavy physical flow in their proprietary index. Here in late January and again here on March 6th (Reuters).
3;
You
can see in the chart above, each time the price to loan gold is more
than the dollar rate, it says gold is more highly prized and has
presaged each recent run up.
This
is as high and prolonged of a period for net positive lease rates for
gold over the last 3 weeks, since that Fri the 14th when the paper price
ate it.
So they are scrambling to get big gold delivered, and we see Soros possibly acquiring physical from the GLD ETF in the news
(as he shorts the near option). To exchange GLD shares for the real
thing, he will need to do it through an authorized participant in
$13million lots; marvel in the convenience. So here is where the spare gold is coming from; which leads us to the last point we will discuss today:
4;
There have been net outflows in GLD since the 7th of February, and have amounted to a massive 93.17mt.
So
when "they" say gold is being sold, ask yourself to whom? Does the
physical gold simply disappear, valueless, or is there a buyer? Flows of
gold represent a change in the prefences of gold owners and non-owners.
Price
is not value, and price is decided most prominently by those who hold a
part of the enormous supply outstanding in the precious metals. It is
the investors "reserve demand” --their demand for a reserve of gold
coins-- that sets a dollar price for a certain quantity of physical
metal offered for sale. There is little investment supply offered up at
these uber low paper gold prices. This shortage signals limited
potential for any further, sustained, paper price decline.
Save safely. We close with a most timely quote. As Mike Maloney would say,
"Take part right now in the greatest wealth transfer in the history of mankind.”
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