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Russia, Korea And Central Banks Accumulate Gold On Dip Below $1,600/oz
Gold edged lower today and sentiment remains poor due to the recent price falls.
Later today the markets will digest the outcomes of policy meetings of the ECB, Bank of England and Bank of Japan. Ultra loose monetary policies are set to stay which will support gold. Indeed, the British government may be set to hand Carney in the BOE even more powers which will usher in even looser monetary policy.
Central banks are among the shrewd investors who buy gold bullion on dips. It was reported that South Korea bought 20 tonnes of gold last month rumoured to be below the $1,600/oz mark. This is the first purchase this year for South Korea, after they purchased 30 tonnes in 2012. Previously they purchased in July 2012 at the same price levels.
IMF World Gold Holdings – (Bloomberg)
When gold was weak during May to July of 2012, central banks actively bought nearly 71 tonnes.
Russia and Kazakhstan’s bought 12.2 and 1.5 tonnes in January, but until the IMF reports official activity, may help the very poor sentiment towards gold today. Central banks utilize gold bullion to diversify their holdings and limit their foreign exchange exposure.
Gold Reserves of Russia – (Bloomberg)
South Korea’s FX reserves ranked 7th in the world at the end of January. However, their gold reserves remain a tiny fraction of their overall foreign exchange reserves which were valued at $327.4 billion in February.
Gold Reserves of South Korea – (Bloomberg)
“The Bank of Korea’s gold buying is part of the long-term diversification of currencies and assets in foreign-exchange reserves,” it said in the statement. “It is of no great importance to try to gauge if it’s
profitable or not based on short-term price swings.”
The World Gold Council noted that central banks increased gold buying 17% to 534.6 tons last year.
Smart, prudent money continues to accumulate, particularly on the dips, while the unfortunate 'dumb' money continues to sell on weakness as seen in the significant liquidation in ETF positions in recent days.
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NEWS
Gold struggles to pierce range, US growth hopes weigh - Reuters
Gold Declines for First Time in Three Days on U.S. Data, Dollar - Bloomberg
China's SGE to launch after-hours trading in Gold & Silver – Bullion Street
U.K. Gold Hallmarking at Lowest Since at Least ’07 on Price Gain - Bloomberg
COMMENTARY
Video: Good To Own Gold and Silver For Long Term - CNBC
Dow Record Nice, $3,000 Gold Nicer: Rosenberg – Market Watch
Paper Markets To Disappear As Gold War Rages – JS Mineset
Gundlach Likes Silver As "The Great Debasement" Will Continue For Years (Not Months) – Zero Hedge
»
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North Korea, please store our gold underwater, and all in one place, we don't want it to get ruined by radiation
seems if they're buying in tons the price would be going up. Are they selling tons of future paper gold and if so when does it all catch up to reality?
Just wait until you see South Korea's Vespene Gas accumulation graph!
So the guys who run central banks are immoral, corrupt, idiotic fools... but when they buy gold they're "Smart, prudent money"... got it
Even idiots have their moments of brilliance.
Great stuff. What are we to make of a situation where former communists are buying gold while the American government is stockpiling bullets?
Bullets probably will likely outperform even gold this decade.
"Would they conspire to wreck the Main Street economy to harvest any PMs left out there in the greedy paws of hapless muppets?"
How can you even ask such a question? For the most part they are all very successful patriotic Americans who would never...,
oh wait...
Are CB's and/or soverign nations buying more physical gold?.HELL yes.They are not stupid, paper claims cannnot back paper.(that why they are taking delivery, gotta have possession to HEDGE other currencies.)KEEP a close eye on PUTIN, he is heading to put Russia back center stage in the World.
We get to start worrying again, he is likely the strongest LEADER in the world at present, and his backgound is known to all.
“It is of no great importance to try to gauge if it’s profitable or not based on short-term price swings.”
If we could get our minds out of immediate gratification mode, we could make better financial decisions, too.
Unfortunately, we have to eat. Could it be that the dire economic conditions we are seeing are another tactic in the war on hard money? Would they conspire to wreck the Main Street economy to harvest any PMs left out there in the greedy paws of hapless muppets?
Thinking along that line...
of these "Central Bank" purchases;
1. Are they buying physical bullion, or ETF's, or COMEX contracts?
2. If they are buying "physical", do they actually take delivery?
3. If they are not taking delivery, then all they have is another paper promise.
http://www.youtube.com/watch?v=tqyxXX3Ra4A
anyone know a chart that values a currency (in ounces of gold) that is its number of outstanding notes verses it's countries gold holdings??
Some currencies are coverd here:
http://pricedingold.com/
There is no "buying" by Central Banks. This bullshit is all a bunch of fucking smoke and mirrors. They LIE for a living. What makes you think one Central Banker is more virtuous than another? There is no real pricing in the Gold market because there is no physical delivery demand. When the physical delivery demand returns then we might see what the REAL price is. With enough fiat digital paper contracts you can pretty much create whatever rigging you want.
Are you telling me that central bankers are not taking physical delivery of gold purchases?
If you are then at least America is not on her own in having someone as clever as Bernanke.
what makes you think that no one is taking delivery? are the french and the amurkins ass-raping mali to steal some GLD paper shit? can they push the price back to $253? they wish. only in their dreams.