Alasdair Macleod details out the reasons why the West is now in dangerously short supply of gold bullion stores. Accelerating the West to East flow is the current broken price discovery mechanism for the metal – Alasdair shows how gold is substantially undervalued and why that undervaluation is likely to correct itself spectacularly, precipitating a financial crisis.
Posts Tagged: GOLD
Indian gold smugglers are adopting the methods of drug couriers to sidestep a government crackdown on imports of the precious metal, stashing gold in imported vehicles and even using mules who swallow nuggets to try to get them past airport security.
Stung by rules imposed this year to cut a high trade deficit and a record duty on imports, dealers and individual customers are fanning out across Asia to buy gold and sneak it back into the country.
Sri Lanka, Thailand and Singapore are the latest hotspots as authorities crack down on travellers from Dubai, the traditional source of smuggled gold.
In a sign of the times, whistleblowers who help bust illegal gold shipments can get a bigger reward in India than those who help catch cocaine and heroin smugglers.
“Gold and narcotics operate as two different syndicates but gold smuggling has become more profitable and fashionable,” said Kiran Kumar Karlapu, an official at Mumbai’s Air Intelligence Unit.
“There has been a several-fold increase in gold smuggling this year after restrictions from the government, which has left narcotics behind.” >> Read More
The Dollar’s fate lies in China’s Hand. Gold is the key to this fate. The Chinese Central bank’s fingerprints are all over the gold manipulation story.
The Chinese play the gold players like fiddles, rigging the price of gold lower to take in as much as they can.
Like Sun Tsu said, If you can win the battle without fighting, that is a good war. They’ve not fired a shot. They’ve used our currency reserves to buy up our gold.
The existence of our world reserve currency status will depend on how and when China shows the world what they hold in gold. That report is due in 2014. Once they show the world they have the gold to back their currency, the entire world will flock to the winner.
The fate of the dollar is almost entirely tied to China, its gold holdings and the value of gold once its real value is set.
$50,000 an ounce could become a real figure.
Internals were positive, with volume a bit lighter. Advances/declines were 5 to 3 on both exchanges, with up/down volume 7 to 4 on the NYSE and 3 to 2 on the Nasdaq. New highs/lows were 225/55 on the NYSE and 241/23 on the Nasdaq.
Leaders — Airlines (+1.74%), Biotechs (+1.66%), Chemicals (+0.82%), Oil (+0.81%), Banks (+0.74%), Defense (+0.74%), Insurance (+0.72%), Network (+0.67%)
Laggards — Gold/Silver (-0.86%), Homebuilders (-0.71%), Telecoms (-0.57%), Comp. Tech (-0.43%), REITs (-0.42%), Retailers (-0.30%), Metals (-0.28%), Utilities (-0.15%)
Treasury Yields — 6 Month: 0.08 %, 2 Year: 0.27 %, 5 Year: 1.35 %, 10 Year: 2.75 %, 30 Year: 3.84 %
Energy Prices — Crude oil: $94.84/barrel, Gasoline: $2.73/gallon, Natural Gas: $3.77/mmBTU
US Dollar Index — 80.711
Precious Metals — Gold: $1242.50/ounce, Silver: $19.85/ounce, Platinum: $1382.00/ounce
Indices sitting at all-time highs heading into T-giving holiday week — bet that doesn’t happen too often…
The 10 per cent import duty on gold and stringent import rules have resulted in huge quantities of the precious metal coming through unofficial channels into the country. Despite much lower levels of official imports — which averaged 10 tonnes in August and September — barring a few organised players, jewellers have not refused to entertain customers for want of gold.
Industry players and analysts tracking gold Business Standard spoke to were not in a position to specify the quantum of gold smuggled into the country. But back of the envelope calculations suggest 40-50 tonnes could have entered Indian borders unofficially after July. The availability of gold in general has been an issue and the country’s premier jewellery body has sent an SOS to the finance ministry to cut duty, arguing that since the 80:20 norms — to import 80 tonnes of gold for the domestic market, 20 tonnes have to be exported — is in place, no other controls are warranted.
In its gold demand trend report for the quarter ended September, the World Gold Council (WGC) said net imports fell 62 per cent to 85 tonnes. The council’s import data do not specify official or unofficial imports. Against this, official gross gold import data for the September quarter, according to the ministry of commerce, are 70 tonnes. A Gem and Jewellery Export Promotion Council (GJEPC) spokesperson said, quoting the council’s export figures, that exports of gold in the form of jewellery were between 35-38 tonnes during the period. The discrepancy in import data gives indication ofsmuggling, though the WGC prefers not to draw any conclusion from this. >> Read More
Global gold demand fell to a four-year low in the third quarter amid widespread investor disillusionment with the precious metal, according to data published on Thursday.
Many analysts and investors have proclaimed the end of gold’s decade-long bull run this year, as the metal has tumbled as much as 38 per cent from 2011’s record high amid heavy selling.
Gold demand was 869 tonnes between July and September, according to data published by the World Gold Council, an industry lobby group. That was down 21 per cent from a year earlier and the lowest since the third quarter of 2009.
The data cover investor buying of bars, coins and exchange traded funds, as well as demand from the jewellery and electronics sectors and central bank purchases of the yellow metal. >> Read More
Jim Willie’s Stunning Claim: The Game is Over. King Dollar is Dead! – Gold to $7,000 Silver to $250+03 November 2013 - 20:53 pm
Many analyst writers choose the Black Swan analogy to describe deeply ominous events in progress, with little forward notice. The analogy simply does not fit anymore, as an armada of black swans is more appropriate, spotted on regular and frequent sightings.
The US financial fortress died in September 2008.
The Grand Paradigm Shift is in progress. My sources indicate that 5000 metric tons of Gold bullion moved from London to points East between April and July 2012. The flow eastward never stopped. The pace has continued. The Gold bullion continues to be shipped in enormous staggering volume.
The agreements have already been made on the new Gold Trade Settlement system with its newly imposed Gold Trade Standard. They have agreed on a $7000/oz gold price, with a similarly exalted silver price of at least $250/oz.
Decisions have been made final. The implementation is slow but steady.
The game is over. The King Dollar is dead.
Click here for Jim Willie’s latest: The Game is Over:
If you traveled to the town of Kalgoorlie, in Western Australia, then headed about 25 miles north, you’d eventually reach a grove of large eucalyptus trees, some more than 30 feet tall, scattered across a dusty, arid landscape. Examining the dirt at your feet would reveal no trace of the gold deposits that lie roughly 100 feet underground, due to the thick layers of clay and rock that sit atop the precious metal.
But, scientists recently learned, if you peered closely enough at the eucalyptus trees—specifically, using X-rays to detect nanoparticles—you’d find that there’s gold in them thar leaves. As detailed in a study published today in Nature Communications, a group of researchers from Australia’s Commonwealth Scientific and Industrial Research Organisation has shown that plants can absorb gold particles deep underground and bring it upward through their tissues—a finding that could help mineral exploration companies mine for gold.
A diagram of the eucalyptus trees’ placement at the Western Australia site (numbers in tree reflect gold concentrations in parts per billion). Image viaNature Communications / Lintern et. al.
“In Australia, we’re faced with this problem of trying to explore through thick layers of sediments and weathered rock to reach valued minerals,” says Melvyn Lintern, an Earth scientist and lead author of the
study. “At the same time, we’d previously heard from mining engineers that, in some places, they’d found eucalyptus roots going down to 30 meters [98 feet] or deeper in the mines.” With this observation in mind, and the knowledge that plants can absorb and transport minerals from the surrounding soil and bedrock all the way up to their leaves, Lintern and his colleagues were struck with an idea: Why not test eucalyptus leaves to see if they could indicate underground gold deposits? >> Read More
Dear World Gold Council Executives;
As you very well know, the business environment for gold producers has been extremely challenging over the past few years. While demand for physical gold remains extremely strong, prices on the COMEX have fallen precipitously. This contradictory situation is the single most important obstacle to a healthy gold mining industry.
In my opinion, the massive imbalance between supply and demand is not reflected in prices because available statistics are misleading. It is not the first time that GFMS (and World Gold Council) statistics come under pressure from the investment community. In his now celebrated “The 1998 Gold Book Annual”, Frank Veneroso demonstrated the inconsistencies in GFMS gold demand data and proceeded to show how they grossly underestimated demand. The tremendous increase in the price of gold over the following years vindicated his conclusions.
For very different reasons, we are now at a similar pivotal point for gold. Over the past few years, we have seen incredible incremental demand from emerging markets. Indeed, so much so that the People’s Bank of China has announced that it is planning to increase the number of firms allowed to import and export gold and ease restrictions on individual buyers.1 In India, the government has been fighting a losing battle against gold imports by imposing import taxes and restrictions.2 Moreover, Non-Western Central Banks from around the world are replacing their U.S. dollar reserves by increasing their holdings of gold.3 >> Read More