“Gold Is A Physical Safe Asset” Says Central Bank of Korea

Tyler Durden's picture

From GoldCore Gold Bullion

“Gold Is A Physical Safe Asset” Says Central Bank of Korea

Today’s AM fix was USD 1,703.00, EUR 1,300.79, and GBP 1,057.90 per ounce. 
Yesterday’s AM fix was USD 1,706.75, EUR 1,305.35, and GBP 1,058.65 per ounce.

Silver is trading at $33.15/oz, €25.46/oz and £20.67/oz. Platinum is trading at $1,597.00/oz, palladium at $681.00/oz and rhodium at $1,075/oz.

Cross Currency Table – (Bloomberg)

Gold fell $18.50 or 1.08% in New York yesterday and closed at $1,696.70/oz. Silver slid to as low as $32.66 and finished with a loss of 1.88%. 

Gold futures selling after midnight in New York, when European and American traders are away and Tokyo's gold trading is quiet after lunch, drove prices down $10/oz in only one minute. More than 3,000 gold-futures contracts changed hands at 12:47 a.m. New York time, and the market's quick slide triggered an automatic, 20-second trading halt in February gold futures, said the operator of the Comex. 

According to Dow Jones, preliminary exchange data showed that trading volume from 12 until 1am was over 6 times the average of the last month.

Gold has recovered from the fall yesterday and overnight and is tentatively above $1,700/oz. 

There was no fundamental driver of the price falls yesterday or today. It may have been momentum traders selling as the short term trend is now down. Yesterday stop losses were breached at $1,710 & $1,700 which led to further falls.

Support is now at the early November lows of $1,673/oz – seen just before Obama’s election.

The stalemate between the US Congress and the White House has some players waiting on the sidelines.

Important on the horizon is the Fed meeting next week December 11 and 12th, the latter including a summary of economic projections and a press conference by the Chairman. In the minutes released after the last meeting, the US Fed layout a threshold strategy where the Fed would maintain near zero interest rates based on an economic variable such as employment rates at 7.5%.  

The crux of the issue FOMC members is deciding whether that variable should be given with numeric or verbal guidance. Since, Operation Twist is expiring at the end of the year; information is necessary as to when it will be replaced with QE4.

The Bank of Korea increased gold reserves 20% last month to diversify investments, boosting holdings for the fourth time since June 2011 and underscoring increased demand by central banks according to Bloomberg. 

The bank added 14 metric tons in November, bringing the total to 84.4 tons, the bank said in a statement today. By value, holdings increased about $780 million to $3.76 billion, equivalent to 1.2% of total reserves, the bank said.

“Gold is a physical, safe asset,” the Bank of Korea said in the statement. The precious metal “is a way of diversification, which helps reduce investment risk in terms of foreign-exchange reserves management,” it said.

The Bank of Korea bought 16 tons in July, 15 tons in November 2011 a further 25 tons over a one-month period from June to July last year.

Gold 1 Year – (Bloomberg)

Russia Favors Gold Over Sovereign Bonds 
Russian Finance Minister Anton Siluanov speaking to reporters yesterday said that gold is seen by Russia’s central bank as a “rather stable” asset amid global monetary easing.

The world’s biggest energy exporter saw gold and foreign exchange reserves rise to $524.3 billion in the week to Nov. 23 from $522.2 billion a week earlier.

At the end of 2011, Russian foreign exchange reserves (including monetary gold, special drawing rights, reserve position at the IMF and foreign exchange) were at $498.6 billion.

They remain the world’s fourth biggest after China, Japan and Saudi Arabia. More than 41 percent of its currency reserves were in euros as of Sept. 30 but the Russia central bank is gradually reducing its exposure to the dollar and the euro.

Silver 1 Year – (Bloomberg)

Separately, China and Russia pledged to further strengthen their economic and financial cooperation at a bilateral dialogue between the two countries' said finance ministers on Monday.

Chinese Finance Minister Xie Xuren and his Russian counterpart Anton Siluanov co-chaired the Fourth Russia-China Finance Ministerial Dialogue, during which the two sides discussed a number of bilateral and international economic and financial issues, according to Xinhua.

The two sides exchanged views on the global macroeconomic situation, policies and measures to promote sustainable economic growth in both countries, as well as the fiscal regime and tax framework.

The two ministers also discussed how to strengthen international financial cooperation between China and Russia.

Central banks in South Korea, China and Russia realise gold bullion is a safe haven asset.

The majority of retail investors and the general public in the most of the world, and especially the western world do not ... yet. 

(Bloomberg) -- Gold ETP Holdings Climb to Record for 13th Straight Session  
Amount in exchange-traded products backed by the metal rose 0.1% to 2,627 metric tons, data tracked by Bloomberg showed.

For breaking news and commentary on financial markets and gold, follow us on Twitter.


Gold near 1-month low, U.S. budget talks drag - Reuters

Gold futures pare losses, regaining $1700 – Market Watch

Sudden Selloff Mars Gold – Wall Street Journal

Bank of Korea Raises Gold Holdings as Central Banks Buy – Business Week


Video: Gold Seen to Triple on World Economic Deterioration - Bloomberg

The Final Denouement of Paper Currencies – Max Keiser

The Picture For Silver Is Exceptional – King World News

With this volatility, is gold still a safe haven? – Market Watch

When Currency Wars Become Trade Wars... - Zero Hedge

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
smlbizman's picture

although the silver prices have been pounded down....an ounce of silver on ebay continues to trade from 38. to 40. per ounce with lots of bids....i think this demand may coincide with the recent volume numbers just put out about mint sales...i would think that ebay is a better indicator of pricing.  the buyers on ebay do not have a pricing model of lets say apmex, so i think it is a better indicator of current actual pricing....so when paper gets trampled and i get that fuck all you cocksuckers in charge felling , i go to ebay and see 2012 eagle proofs for 70+, regular eagles for 40....perspective re-adjusted  immediatley....than again i could be wrong...

GetZeeGold's picture



Why is Ebay taking advantage of the stupid masses? We should demand Senate hearing on this!

goldfish1's picture

"The main reason to be bullish on the US$ gold price is that the ignoramuses at the upper echelons of the Fed truly believe that they can help the US economy by conjuring money out of nothing. The weaker the economy becomes the more money they will create, and the more money they create the weaker the economy will become"

-- Posted Wednesday, 5 December 2012

Steve Saville at Goldseek

chubbar's picture

Apmex was advertising silver maples for $2.60 or so over spot yesterday. I don't think we are at the phsical/paper divergence just yet. I do expect we'll see it sometime in 2013 though.

Thisson's picture

Don't forget to back-out all the fees, commissions, and shipping charges.  Trading with ebay/paypal has a lot of transaction costs.

Ookspay's picture

Bloody Heathens clinging to their ancient relics, how quaint.

Harlequin001's picture

“Gold is a physical, safe asset,” - and a fat lot of use it is at 1.2% of assets.

Might as well not bother...

or double up, many times.

moriarty's picture

Is it now in Korea? If not they do not own it.

whopper's picture

Not according to Bubblevision, they claim gold is a risk asset. Those gooks need to get with the Fed program

ParkAveFlasher's picture

This "we love gold" stuff is becoming an everyday thing.  I can dig it.

Sudden Debt's picture

And so the second Korean War started...


NidStyles's picture

You don't say....

TheCanadianAustrian's picture

Wake me up when the market says the same thing.

MeanReversion's picture

And right now as we speak we have the 8AM gold dump.

GetZeeGold's picture



Jumping the gun this morning I see.

Quintus's picture

Headfake this time?  Maybe.  Let's see what develops.

Silver Garbage Man's picture

This trend is going to continue. More central banks and big money moving into the metals. If you are already in, good for you....if you are not in then you better get with the program. The day will come that you are too late.

905ozs's picture

The Koreans eat dogs....Ben better not visit

Sudden Debt's picture

North Korea DID announce that they found THE LAIR OF UNICORNS!!!


they piss rainbows and crap 50 ounce gold bars...




radix46's picture

I wonder how much silver they bought? Ooops, none.


Gold AND silver? I don't think so.

Thisson's picture

Silver is not money; it is a money substitute.  Central Banks don't need money substitutes - they can already print their own.


holdbuysell's picture

“Gold is a physical, safe asset,” the Bank of Korea said in the statement.

But, but, but...the US Federal Reserve Central Bank's Chairmen Ben Bernanke says it's held because it's 'tradition'.

Mercy, the veneer on the lies/half-truths is getting thin.



Karlus's picture

Morning spankdown underway. I like how they do it before US market opens to punk the markets...

Zgangsta's picture

I see the 8am PM dump is running on schedule again today.

Confundido's picture

The manipulation is obscene...$1,705 must not be crossed.

Iam Yue2's picture

The sell off over the past twenty four hours was people positioning themselves ahead of the FDI vote in India, which has been today won by the government.  This will lead to a rapid appreciation in the rupee and a subsequent fall off in the demand for Gold.

For Gold it is India that matters, and if you have not been aware of the FDI vote and its significance, one wonders if you should be trading in the metal!

Quintus's picture

What about the sudden random selloffs on November 27th, 28th, 30th?  Were they also all about Indian votes?

Will the sudden random selloffs today tomorrow and Friday also be related to India?

cranky-old-geezer's picture



You mean massive naked shorting?

Don't forget, there's the fantasy paper market and the real physical market. 

Unfortunately the fantasy paper market sets the "spot price".

With unlimited (printed) currency and fantasy markets moved by currency, Fed can manipulate anything up or down.

This morning it's pushing gold down and pulling USD up.

Long as USD is reserve currency, Fed is the most powerful institution on the planet.  Don't fight the Fed, you'll lose.

Al Huxley's picture

I would say 'fortunately the fantasy paper market sets the "spot price"'.  If I can continue to trade fake money savings for real money savings at an artificially depressed exchange rate, while continuing to pay daily expenses with fake money (so I don't have to spend the real money) I definitely can't complain. 


Gold down, USD up is only bad for people who either think that trend can continue, or who are leveraged in the paper market.

oddjob's picture

Dont play their game, and you can't lose. Stop all consumption other than basic needs. Spend nothing. Convert all excess in savings into physical metals. Leverage nothing. Next week when you get more paper do the same thing.

Confundido's picture

Well, you have to explain to simple people like ourselves what will foreign direct investment do for Indians to decide that gold is not to be a store of value. And you must explain too, why the possible appreciation of the ruppee, in USD terms, has anything to do with the relation between the USD and gold. Finally, you must explain why that would also cause massive manipulative sell offs at key levels.

barwar's picture

Excellent post Paulo!  Keep it up.

Thank you Tyler Durden for providing such a great forum to foster critical thinking. 

midtowng's picture

It wasn't but a couple years ago that the BoK said they didn't want to have anything to do with gold. I wonder why they changed their story?

Thisson's picture

Because now they want to sell and take profits.  Duh.

cranky-old-geezer's picture



Central banks in South Korea, China and Russia realise gold bullion is a safe haven asset.

The majority of retail investors and the general public in the most of the world, and especially the western world do not ... yet.

Don't let western world leaders fool you.  They want you to view their fraudulent fiat currency as gold, while they silently get all the gold.

Western world people have got to be the dumbest sheep on the planet, believing everything govt says.  They're being looted into poverty, they don't even see it, and if they saw it they wouldn't believe it.

Karlus's picture

I have a gold Mastercard, does that count?

Snidley Whipsnae's picture

Anyone remember this from 1998?

"South Korea has exported the first shipment of 300 kilograms of gold collected in a public campaign to help the country out of its economic crisis. The nationwide campaign - led by large business groups including Daewoo, Samsung and Hyundai - began on January 5, and involved ordinary Koreans donating personal gold treasures, which have been melted down into ingots ready for sale on the international markets. Kate Liang looks at the phenomenon of public self-sacrifice to save an economy in trouble"


Manthong's picture

Has anybody bothered to ask if South Korea has taken delivery of any gold?

Where and how is this alleged gold stored and accounted for?

zilverreiger's picture

South Korea and China signed a 45B$ inter trade deal in their own currency against USD.




Bansters-in-my- feces's picture

Yup...I see gold has had its morning smackdown.

dbTX's picture

"Gold is a physical safe asset"  Ya think? Not exactly news.

redd_green's picture

I think fertilizer is a better asset, myself.   Im loading up on turds, myself.  You can't get tomatoes to grow with gold, but you sure can get a lot to grow with the right manure!