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Gold Jumps After China Reveals It Bought Another 19 Tons In July
One month ago, when everyone suspected that the PBOC's dramatic, 57% jump in gold holdings after a 6 year silence, to a "record" 1658 tons would be a "one-and-done" event, meant to facilitate China's admission into the SDR, we disagreed. This is what we said:
... now that the seal has been finally broken after so many years, and since today's update indicates that Chinese gold numbers are clearly goal-seeked with a specific policy purpose - to boost confidence - we await for the PBOC to start leaking incremental gold holding data every month (and especially in months when the market crashes) which will bring us ever closer to what China's true gold holdings are.
One month later, this is precisely what happened, when overnight the People's Bank of China reported that even as the price of gold dropped once more in the month of July after the epic June drubbing (when China supposedly "bought" over 500 tons of gold), it added another 610,000 ounces of the yellow metal, or 1.1%, bringing its total to 53,930,000 ounces, or 1677 tons of gold.
Our view on China's disclosure (if not accumulation: this has already happened and now the PBOC is merely picking the right moments to gradually reveal what its true gold holdings are) of gold have not changed: expect every month to see a modest, incremental increase in its gold holdings.
And while last month, the market took China's announcement as a disappointing update - speculation had been rife that China has over 3,000 tons of gold - today the market is slowly waking up to what we said a month ago, namely that China's official gold holdings are far greater than what is revealed and that the PBOC will simply keep increasing month after month, now that both FX and gold play a very specific policy role in what everyone now realizes is a global currency war.
Sure enough:
CHINA BUYS ~19 TONS OF GOLD IN JULY.
Gold up 0.2% in London at $1,116.73/oz.
http://t.co/npB9KrIeHy pic.twitter.com/E7AS1CmNcs
— Eddie van der Walt (@EdVanDerWalt) August 14, 2015
And:
Putting what China has just done in very simple context: China announces an increase in its gold holdings of over 58% in the past two months... and then this past week it devalues its currency by nearly 5% in just three days.
Even the most brainwashed Keynesians should be able to figure out what is going on by now.
One wonders how long until millions of Chinese citizens, badly burned on the stock market bubble, decide it is time to put their savings in gold once again.
But while none of this comes as a surprise to us, or our readers, what was perhaps more notable, was the latest plunge in Chinese FX reserves, which tumbled from $3.694 billion to $3.651 billion, suggesting in July China sold, via Belgium, another $40 billion or so in Treasurys just before China announced its devaluation. Expect confirmation of the recent Treasury selloff by "Belgium" when the Treasury releases its next TIC data update.
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Buy Silver......................
PS In our inflationary world on a long enough time frame goods increase in fiat money terms as fiat money increases.
When looking at a graph in anything based in fiat ........................flip it and look at that chart going from left to right...........down.
That is the purchasing power decreasing.
tesla for sure.....
/
Tesla?
You mean the company that's never made a profit and relies on 20% of its income from government subsidies?
you new here?
Not exactly... Consider examining your "all time high" in not only gold, but other commodities in 1913 dollars, then compare the numbers over centuries. ROFL!!!!
Aluminum being a technological exception. Physical gold supply may someday increase in a similar fashion, even considering that risk I would much rather hold gold coins than any fiat trash.
Only gold is money.
The USSA is trading tulips.
Damic: Stop and take a deep breath. Please. The US dollar was issued in 1913. Today it's worth about $0.12. Are you saying I should go back in a time machine and come back to the future with bushel baskets of paper dollars? If so, explain. Thanks. You can exhale now.
where $0.12 come from? incorrect
more like $0.02 or less or lost maybe 98%
1913 farmland was few dollar acre and Ford car $600 and soon less
even from last US Silver coin melted dollar is 11x against dollar since 1964
think....then ask who gained other side?
I am talking about shares.
In 1913 you bought 1 dollar of gold, and I bought 1 dollar of S&P 500 (or whatever was back then). I also get the dividends!
Who made a better investment? you or me?
You can exhale now :)
If you bought and held the companies making ap the S&P 500 in 1913 (yeah, I know, it din't exist, but bear with me) you would now have approximately nothing, as most of them do not now exist.
"S&P500" is a manipulated stat, they're the 500 biggest companies at any given point, so of course it keeps going up, if one of them loses value it's automatically dropped and replaced with something that is increasing in value.
At least, that what my jaded sensibility assumes.
Lies, gold barely moved in euro/usd, or is this some old newsitem? a weekly wrapup?
You will slowly adjust to golds new role in the world economy. It will be steady and China holds the cards(tons).
The important thing here is not amplitude, but rather trend. The combination of buying some gold, selling some treasuries, and devaluing the yuan is a signal that China is closer to removing the long standing peg to the U.S. Dollar, and becoming a free floating currency. This is a move toward ending the dollar as a reserve currency AND think what will happen when the U.S. dollar weakens? Chinese products become more expensive in the U.S., more dollars flow to China in trade balance - but next time the Chinese will not have to defend their peg by buying Dollars and U.S. Treasuries. So what happens when the Dollar is weakening, as Treasury yields are climbing, everyone is selling Treasuries, and China does nothing to intervene and support its peg (and the Dollar).
^^^this, simply testing the waters. Sure, still plenty of domestic bullshit and bullying, but the Chinese are much better at taking orders when comared to the average sheep.
I can see why gold would spike. I mean, 19 tons is over $40 million dollars. Wow. My knees are shaking.
Yes, but consider this
"Chinese FX reserves, which tumbled from $3.694 billion to $3.651 billion, suggesting in July China sold, via Belgium, another $40 billion or so in Treasury"
Lets see: 19 short tons? That's 19 times 2000 pounds. That's 38,000 pounds. 16 oz. to a pound (troy and US oz. are pretty close, I'm not splitting hairs here). That's 608,000 ounces x say $1,200 an ounce. I'm coming up with a much different number than $40 million. 19 metric tons would be 670,205 ounces. Times $1,200 again: $804,246,000. How did you get $40 million? Tungsten?
For the hair splitters:
oz = t oz * 1.0971Sheep don't do math.
Arithmetic is a bitch.
What the hell are you talking about? Nineteen tons of gold is worth much more than $40 million dollars.
and i reckon that it is also worth a whole hell of a lot more than the COMEX spot price in security in the near future. the tide is beginning to go out.
A coming deflationary tsunami will send capital from Europe and the Far East to the 'safe haven' US, strengthening the dollar. When the economy in the US crashes ao under the higher dollar weight, then it's the time to buy gold. If you believe in future pain, disgust, panic, revolts, defaults, crashes etc any gold price is ok, just own it before the shit happens.
+100
Concur Fibo Nacci
That's true enough. Because when hyperinflation hits, which is what usually follows deflation, you won't be able to shovel enough paper to buy an ounce of gold. Case in point: Zimbabwe. When their currency was issued, one Zim dollar was equal to about $1.38US. What would you rather hold now? A truckload of Zim dollars (officially declared worthless) or just one single ounce of gold?
Do I get the truck too?
Yes, unfortunately, at that time, there won't be any supply availble. I spent a lot of time in the Soviet Union back in the 80's. The "official" price of many things was very low.
good point
Bought it cheap too.
There will be consequences.
if they say they bought 19 prob means they really bought 190, 19 is too small for a month of gold for china... it's chump change
I suspect the rally is due to the record number of short contracts on the CME being covered rather than a few tons that we know China buys every month, same as India and Russia and the 'stans.....
so china made a interesting sequence or a manual:
1st step, sell us treasuries
2nd step, purchase au
last step, devalue cny
Unless both sides of a Gold sale are reported I do not believe any of it. From what entity is all this gold being bought!? Worldwide Gold production only increases about 1.3% per year!
By the way, Fort Knox was last audited in 1953.
Tuco
As Jim Rickards has said the gold market is an inverted pyramid with a tiny amount of real gold supporting a vast amount of paper gold, eg ETFs.
Once Russia and China have bought enough real gold the pyramid topples over.
http://pro.moneymappress.com/MMRBSSH39PPM3/LMMRR899/?h=true
The people that didn't see 2008 coming say things are going well.
See what Jim Rickards has to say.
There are so many paper instruments that are total BS. When some describe the derivatives possibly being in the quadrillion range, thats a decent indicator of the world being toast. Dominos are set.
Thank You for being amongst the few to point out the Elephant in the Room that nobody wants to speak about, spare having to clean up its poo and tolerating the drama it will put on when it can't perform.
Most unregulated derivative garbage will not be able to perform when the SHTF. There's not enough $$ to clear it all, and even if there were, consider the mega-inflation created. Derivatives are good as long as the system doesn't break, but break they shall! The globe saw a preview in '08 and the next time the Fat Lady takes the stage, I expect far worse. At best, pennies on the dollar! There, it's said.
Many better sources than Money Map Press - they're completely FOS.
Rickard's has been associating with them, Casey, et al to sell more books. More power to him, but F**K Mo'MoneyMapPress.
Just netSearch Rickards to see what he has to say.
Jim will be proven so right on several points. The leverage of paper vs phyzz on gold is estimated now at nearly or just over 124:1
Rickards' position on a global currency war is just beginning to play out. Another very insightful Jim, Sinclair that is, sees QE to Infinity as the Fed ran out of wiggle room sometime back. I agree each subsequent QE will have less of an effect. It has so far! These idiot bank$ters and central planning elitists are delusional, short of WWIII that their plans can be workable going forth.
But then came Obummer, and hordes of undocumented "dreamers" for the existing muppets to allow their embarazada to freely birth and begin the economic "sucking sound" which Perot warned us over a score ago about.
Where I live, a town with a high Latino population percentage, high schoolers are tapped into what the Donald is saying. A pickup truck with high schoolers and the hashtag #TRUMP appeared on Main Street. No other national politician is showing this sort of inroads here. When I lived in Iowa, I had no problem seeing many factions supporting their candidates, it holding such a caucus. This reminds me of it, and it's quite interesting to watch going forth.
Preparing the American and European lambs for inevitable slaughter!...
The only thing that will slow down the "full eclipsing" are more fireworks in Eastern Europe and Asia which Georgy "Schwartz" Soros & Pals are fully prepared to do -with the help of the NATO contingent prepared to sacrafice EVERYTHING for them of course at ALL COSTS!!!!
China is buying gold while the US is printing worthless paper caller dollar.
As long as its denominated in dollars, US has nothing to fear.
You guys keep going on about the banks and the fed selling its gold, but if they have enough buy back power it really does not matter, they can use their inventory as a yo-yo. In fact, you would be stupid not to.
What I do believe, is that in this debt economy, and currency printing competition, gold is priced just right and a bargain at these prices. I don't think it can go much lower.
If they are manipulating it, they can only do so in increments and must always be weary about creating an inventory shortage, that can do the opposite and create a spike in the price. I think we are seeing close to the low at these prices, there have been lots of drops but the price keeps creeping back up.
It sounds like China dredged a river following a boating accident.
My guess is that not only will it dredge many more rivers but it will continue to have boating accidents.
I'm thinking Willie is right. The Chicoms will either slowly or quickly relwease their gold holdings and then settle Trade thru the gold window.
Zoom in on a $9 range chart and claim it is not just noise?
Gold is used extensively in electronics. My circuit boards are gold plated. My integrated circuits are full of gold bonding pads and gold wires.
High priced gold is not good for electronics.
A rigged stock market is not good for the economy.
If you want to lower the price of gold, do a better job running the economy. (When you catch them rigging it, you would be a fool not to buy gold. Their meddling only tells you where you should put your money.)
I have gold in my teeth and in my wedding band but that's not really the point or the issue, is it?
The amount of gold used per-chip, is minuscule compared to what was used before.
A "gold-top" Pentium PRO chip, has at least $15 worth of gold in it. A new XEON chip that sells for over $150 might have 75 cents worth.
value of all metalls ina PC is app. $5.
palladium, aurum, argentum, copper, platinum, zinc, tin, sillicon, gallium, etc.
you gonna separate them and weight. A PC of our days and a PC 20 years old.
The old PC would be maybe $20 worth, the todays box max $5.
I do not see whats the point you want to make?
The sam eis valid for smart phones and mobile phones.
The old ones yelded 1 once from 50 pounds.
the latest smart phones yeld the same one ounce from 300 pounds.
still crazy good for scrappers.
you need to turn one tone of or to yeld 1 gramm of gold.
Paper for 19 tons is what it should say.
Is this fantasy that China-will-introduce-a-gold-backed-currency-at-some-future-date-then-achieve-reserve-currency-status-somehow-making-us-whole-on-all-our-gold-bug-losses fantasy still alive??? China has told us that they don't have near the amount of gold that gold-bugs thought they did. And we don't have any idea how much of that gold is really tungsten. They've surprised us with random devaluations. And their economy, stock market, civil society and environnment are all collapsing. These are not the ingredients for a reserve currency. Admit that your gold is worthless and sell it already. We're in a deflationary environment for god's sake! You won't be able to buy moldy dog turds with your gold if you keep it.
You should be in cash. The paper kind. Stuff it in your mattress, bury it in the yard. Leave these predatory markets to the bankers who own them.
Jim Rickards thinks the West is suppressing gold so China can buy it.
This is all stage managed, they are all in it together.
No one believes more firmly than Comrade Napoleon that all animals are equal. He would be only too happy to let you make your decisions for yourselves. But sometimes you might make the wrong decisions, comrades, and then where should we be?
"Gold jumps!!!"
Checks the price of gold... Up 0.3%. Wtf?
0.3% of 1,000,000,000,000,000.00 (paper) is (wait for it).....no, overflow.
gold "jump" erased in 2 candles
slumped now
Once again ZH shows an incredible ability to call top and bottoms intraday.
Gold to 1100 yellenbux? I paid more for it five years ago.
I do not disagree with the numbers that Central Bank is releasing. For political or for financial reasons. The question that is not asked, and they are not volunteering is "how much gold does the people have"? The people are assets of the government. Who controls the currency is more important that who has possession of it. It's not like it is going to leave their border while it carries the death penalty for exporting it.
You would have known this two days ago if you went here : http://goo.gl/Yr9zcd
I posted this information on the 12th from Goldreporter.de