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China Buys Another 14 Tons Of Gold In October As FX Reserves Unexpectedly Rebound

Tyler Durden's picture




 

Overnight, China's PBOC released its updated October reserve asset data via the State Administration of Foreign Exchange. There was one surprising and one less surprising disclosure.

The less surprising one was that, as we forecast in July when the PBOC admitted that during a 6 year silence in which it did not report any gold purchases and during which it had been feverishly accumulating gold, that "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 which will bring us ever closer to what China's true gold holdings are."

Today we got yet another confirmation of this when China reported that its total gold holdings as of October 31 had risen to a record $63.3 billion, up $2.1 billion from $61.2 billion at the end of September, and an increase of 14 tons based on the month-end LBMA gold fix price, to 1,722 tons. This represents the fifth consecutive month in a row in which China has added to its gold.

 

This was not surprising: we expect China to continue to "announce" monthly additions of 10-20 tons of gold indefinitely, not only because the PBOC/SAFE/CIC fungible gold inventory is far greater and as a result this is merely the PBOC deciding to slowly reveal its true holdings (especially since the price of gold continues to slide even on months when China and/or Russia are aggressively buying physical), but because in China's attempt to get an IMF stamp of approval it wants to show a diversified asset base.

The more surprising finding in the reserve data is that while consensus was expecting China's FX reserves to dip once more, from the $3.51 trillion reported at the end of September, especially with an unprecedented intervention spree by the PBOC after the Golden Week and in the last days of the month, China returned to its old bag of tricks of massaging FX data when instead it reported that FX reserves had increased to $3.53 trillion.

 

How is this possible, and is China openly fabricating data? Not at all. As RBC' Hong Kong-based currency strategist Sue Trinh told Bloomberg,  "China's spot reserves don’t give the you the full picture since it does not account for the forward book. China, along with many other EM central banks, has been making increasing use of its forward book for intervention activity."

As a reminder, we explained in detail precisely how China has shifted from FX intervention in the spot market, which would impact reserves directly, to forwards.

For those who missed it here, again, is:

"Capital Is Still Flowing Out Of China, Here's How Beijing Is Hiding It"

Earlier this month, we asked if the market was being deceived about the pace of capital outflows in China. 

Our concerns came on the heels of a rally in EM FX and other assets that may have been fueled by a “better-than-expected” read on China’s reserve drawdown in September. The figure came in at “just” $43 billion, which of course made no sense because on one measure, outflows totaled more than that by the middle of the month. 

This is important because as we outlined three weeks after the deval, the monthly read on China’s FX reserves has to a certain extent become the new risk on/off trigger for the market which means that if the data is unreliable or otherwise opaque, then investors will be operating with bad information. That is, what we really want to know is how much pressure there is in terms of capital outflows, and to the extent that China’s official FX reserve data doesn’t capture that, the data isn’t a useful indicator of where EM is headed on a more general level.

As Goldman began to discuss in September, Chinese banks appear to be absorbing some of the outflows using their own books. Here’s how they explained the situation last week: 

Given possible PBOC balance sheet management (e.g., short-term transactions and agreements between with banks, e.g., forward transactions, FX entrusted loan drawdown or repayment), we interpret the FX reserves data with caution, as it might not give a complete picture of the FX flow situation. The large gap between today’s data and the other PBOC data for September suggests that banks might have used their own spot FX positions to help meet some of the outflow demand, although banks’ overall FX positions might still have been squared with the PBOC via forward agreements.

In short, our argument has been that much like the NBS will obscure any weakness below 7% in China’s GDP data, the PBoC will do “whatever it takes” (central bank pun fully intended) to make sure that the market doesn’t get wind of the fact that there’s still a tremendous amount of pressure in terms of capital outflows.

Now, the word is apparently out. Here’s Bloomberg:

The People’s Bank of China and local lenders increased their holdings in onshore forwards to $67.9 billion in August, positions that would boost China’s currency against the dollar. The amount is five times more than the average in the first seven months, PBOC data show. The positions are part of a three-stage process to support the currency without immediately draining reserves, according to China Merchants Bank Co. and Goldman Sachs Group Inc.

 

Standard central-bank intervention to support a currency generally involves selling dollars and buying the home tender. In this case, China’s large state banks borrowed dollars in the swap market, sold the U.S. currency in the cash spot market and used forward contracts with the central bank to hedge those positions.

 

"If you can intervene without actually diminishing your reserves, it’s somehow viewed as better," said Steven Englander, global head of Group-of-10 foreign exchange-strategy in New York at Citigroup Inc. Such central-bank activity "may not look quite as dramatic as the sale of reserves, and they may prefer that optically," he said.

 

 

Using derivatives for intervention had the benefit of delaying any decline in the PBOC’s $3.5 trillion trove of foreign-exchange reserves, helping calm investors rattled by an economic slowdown and a slumping stock market. It was also faster as the monetary authority’s managers didn’t have to liquidate assets such as U.S. Treasuries to raise the dollars needed for direct yuan purchases.

 

Major Chinese banks borrowed dollars in the onshore swap market in late August and September, and then undertook "heavy dollar selling" in the spot market, said Frank Zhang, head of foreign-exchange trading at Shenzhen-based China Merchants Bank. 

The PBOC then came in to offset, or "square", the positions with the banks, essentially taking on their trades onto its own balance sheet, according to Goldman Sachs.

 

On a practical level, buying yuan forwards means the PBOC wouldn’t drain yuan liquidity out of the system as it would otherwise by buying its own currency in the spot market. Policy makers cut interest rates and the reserve-requirement ratio in August, partly to replenish the funds drained during intervention.

 

"If you have a transaction that settles down the road, the actual liquidity impact in the short term may not be as dramatic," said Citigroup’s Englander. "Down the road you can’t avoid it."

In the simplest possible terms (although really, this isn't that complex a transaction to begin with), they're just kicking the can in an effort to control the optics around the deval, which would be fine if everyone realized what's going on, but rest assured they do not, because no matter how many Bloomberg or WSJ articles are published on the subject, the market (or the machines) will still read the headline figures and make a snap judgement about the extent to which the pressure on the yuan has mitigated. 

At the end of the day, the takeaway is simply this: the narrative around Chinese capital outflows is extraordinarily important right now, and indeed, it's influencing the Fed's reaction function. Even as Beijing doesn't necessarily want the Fed to raise rates, the PBoC doesn't want to lose complete control of the narrative either, which is why you can expect to see more efforts on China's part to mitigate near-term FX reserve burn, even if it means stacking the deck against the yuan down the road. And really, who can blame them? The entire world is involved in the largest can-kicking experiment of all time, so why should China's central bank be any different?

* * *

Of course, the headlines on Monday will be that China's reserve liquidation has stopped, when instead it has merely shifted into the swap market because as Citi's Englander says "If you can intervene without actually diminishing your reserves, it’s somehow viewed as better." As Goldman explained previously, "to assess the overall FX-RMB trend, including in the offshore RMB (CNH) market, other FX data sets such as the position for FX purchase would be useful supplements—these are not affected by valuation effects and include FX settlement between the onshore banking system and offshore banks, although they do not account for forward transactions." Data on the position for FX purchase covering the PBOC should be out in mid-October, and similar data covering the whole onshore banking system (PBOC plus banks) should be released at around the same date.

For now, however, we expect the spin to be that China has finally managed to get its FX devaluation under control and is no longer liquidating bonds (which is bad news for the ECB), potentially serving to catalyze the next move higher in stocks.

As for China's ongoing accumulation of gold, we expect it to get no coverage in the press at all.

 

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Sat, 11/07/2015 - 10:06 | 6761305 Oldballplayer
Oldballplayer's picture

Gold bitchez....

Cheap Gold....

Sat, 11/07/2015 - 10:24 | 6761347 VinceFostersGhost
VinceFostersGhost's picture

 

 

 

China revalues gold......in 3, 2, 1

 

Germany called....they still want their freakin gold back.....as in all of it.

Sat, 11/07/2015 - 10:48 | 6761380 Bokkenrijder
Bokkenrijder's picture

When, if ever, will people here realize that China just makes up the numbers as they go along?

Sat, 11/07/2015 - 10:57 | 6761395 Berspankme
Berspankme's picture

yeah, thank goodness we get honest numbers from DC and the EU

Sat, 11/07/2015 - 13:04 | 6761657 Save_America1st
Save_America1st's picture

The REAL phyzz PM market is very soon going to explode.  China has by most expert analysis over 20,000 tonnes of gold; some say a lot more than that.  And China is also the worlds biggest miner of gold and NONE of it gets away from them.  They mine somewhere around 500 or more tons of gold a year and have been doing so for decades.  So let's just stop thinking that they don't have at least 20,000 to 30,000 tons of gold.

And that might not even be factoring in the massive amount of gold the Chinese people have accumulated since the Chi-Coms started allowing them to buy and hold gold and silver again. 

China is using it's own 1.3 Billion population to accumulate more phyzz gold and silver than can ever be calculated at this point. 

Just wait in the years to come when they start trying to either use that gold in a "civil" way as the "new" monetary system...or wait until they confiscate all that extra gold from the Chinese people.  I don't think they will do that, but what if they did????  Either way it flips the entire dollar monetary system on it's ass.  And it's pretty much toast right now as it is, right??

Let's just say we all know what just China has is a whole lot more than what they're telling the world now....by far.  They have no reason at this time to spook everyone w/ the real amount when they can say 3000 tons or so and make it work for them.

I would think that also means their silver phyzz holdings are gargantuan as well.  China doesn't even need to admit these amounts in order to destroy the PM paper market.  That wouldn't even be in theirs (or any of ours) best interests still right now. 

Let the criminaly manipulated, fraud paper market continue to wreak havoc on the phyzz price of silver and gold.  FINE BY ME!!! We just need to keep stacking phyzz on the cheap.

Knowing a thing doesn't necessarily mean we have to stop it....and we don't have to stop the manipulation right away.  Take advantage of it just like all the countries like Chiner, Indier, and Russer are doing, and just like the fucking scumbag elitists and CB's and all the other scumbags like Soros and Buffet are doing.  This is the whole point of stacking phyzz!

The scumbags are keeping the paper prices low and steady so they can secretly stack as much PHYZZ as they can.  They're scooping up whatever is being mined and whatever old metal is still above ground.  Not to mention they are using the ciminal, fraud paper markets to naked short as much PM's as possible to keep phyzz cheap enough at these levels right now so that the tech and MIC companies can continue to produce their electroncal bullshit and weapons as "cheap" as possible while continuing the war machine and electro-business process for as long as possible. 

AND....also not to mention that by keeping phyzz prices low they can continue to run their criminal bankster fiat Ponzi scheme. 

BUT!!!!   It's a fucking dance on a tight-rope at 30,000 feet and both ends are beginning to fray, bitchez!!!  lol

So just sit back and keep stacking phyzz and other essential supplies. 

There's really no such thing as BTFD when it comes to phyzz PM's.  Just budget yourself the best you can w/ the dry powder that you can allocate comfortably for phyzz at regular times.  That's it.  That's the fucking secret in a fucking nutshell, bitchez!

Just keep stacking.  That's all there is to it.  Plain and fucking simple. 

All this other bullshit is just a distraction to keep you from getting out of the bankster system and from stacking. 

Sat, 11/07/2015 - 13:32 | 6761720 milking institute
milking institute's picture

In addition to the 20 000 estimated Tons of gold held privately in India,with the indian gov in a full tizzy trying to get it's hands on      http://www.tfmetalsreport.com/blog/6860/indias-convoluted-gold-scheme

Sat, 11/07/2015 - 13:41 | 6761744 38BWD22
38BWD22's picture

 

 

Save_America1st

Nicely done.  Be your own central bank.

+$55,000

 

Sat, 11/07/2015 - 14:28 | 6761827 tenpanhandle
tenpanhandle's picture

No need for China to confiscate its peoples' gold.  They offer a 50% to 100% premium to buy citizens gold and print more yuan to pay for it.  New printed money could be backed by the very gold that it purchaced.  Result would be to provide a massive stimulus to economy at the street level, cause all the world's gold to flow into China, create a large increase in the yuan money velocity in China and potentially create or augment a large middle class in China that can then start filling the ghost cities.

 

Then they can print more yuan to "buy" (officially acknowledge) all China's hidden gold hoard at the higher (reset) gold price and end up with the new world reserve currency, gold backed.

Sat, 11/07/2015 - 11:23 | 6761443 Bill of Rights
Bill of Rights's picture

Isn't it all made up anyway? " what difference does it make "

Sat, 11/07/2015 - 11:05 | 6761406 FireBrander
FireBrander's picture

Wealthy Chinese take great risk in getting thier money out of China...and once out, they don't buy gold.

They would rather sink $400,000 into a 400sqft ghetto shack in LA than buy 23lbs of gold.

What's the message there?

Sat, 11/07/2015 - 12:42 | 6761631 Spitzer
Spitzer's picture

Maybe they aren't as smart as you think they are. They probably don't realize that credit pushed prices there. So they think the price is stable. But when the credit gets pulled so will the value of their investment. 

Sat, 11/07/2015 - 13:04 | 6761671 milking institute
milking institute's picture

"they don't buy gold"  and you know this how? you have first hand info on all their financial transactions,do they write you?  keep us up to date!

Sat, 11/07/2015 - 14:20 | 6761810 nidaar
nidaar's picture

"the message here" is they are speculators, like the wall street scumbags or the banksters of fed. And they don't speculate only in the housing market...

Sat, 11/07/2015 - 14:37 | 6761840 tenpanhandle
tenpanhandle's picture

That's because the wealthy Chinese have become, (in their accumulation of wealth in this fucked upside down economic situation) westernized i.e. Keynesianized and now hold the same disdain for gold that their round-eyed brethren have.  This does not make them right or smart, just conditioned.  They will eventually see their folly.

Sat, 11/07/2015 - 11:27 | 6761457 FireBrander
FireBrander's picture

"revaluation" is a great way to quickly steal wealth from everyone.

Let anything real (gold, silver, tulips) threaten government issued "money"..oh boy...step back and watch with amazement at how swiftly and absolutely that "real thing" is attacked and destroyed by government.

Sat, 11/07/2015 - 10:59 | 6761387 FireBrander
FireBrander's picture

"China Buys Another 14 Tons Of Gold"..and the price FALLS!

Government numbers are all BULLSHIT!...unless it shows they're "buying gold"...then "Government Numbers" are Gods' Truth!

Geesh! Look at China's history...Whenever they begin "heavily investing" in anything, THE END IS NEAR for that "thing"!

Coal

Oil

Copper

Rare Earth

Minerals

Domestic Real Estate (Ghost Cities)

Foreign Real Estate ($1,000,000 fix-er-up-er 'garages' in Canada)

US Treasuries

If China wants to buy something, SELL IT TO THEM, sit back and eventually you'll be able to buy it back from them for half price or less!

China is contrarian indicator...run with them, but be aware there is a cliff in the distance and they will go over it at full speed!

 

Sat, 11/07/2015 - 11:20 | 6761435 sam i am
sam i am's picture

 

evidence that Ukraine shot down MH17

http://thesaker.is/7-11-2015-ukraine-military-report/

Sat, 11/07/2015 - 11:22 | 6761441 silvermail
silvermail's picture

Now is a great moment to Moscow and Beijing to present claims to the United States for the immediate exchange of paper US Treasuries for physical gold!

Sat, 11/07/2015 - 11:30 | 6761470 FireBrander
FireBrander's picture

UST is not backed by gold; it's backed by "FAITH"...LOL...stupid Chinese fucks exchanged all those TV's for a promise of...well, I'm not exactly sure what.

Sat, 11/07/2015 - 14:42 | 6761855 Four chan
Four chan's picture

the banking jews enslave the world with fiat, there's really no nice way to say it. unfortunatly they used the good name of we the people to do it.

Sat, 11/07/2015 - 14:46 | 6761861 tenpanhandle
tenpanhandle's picture

I did not downvote you though I disagree that they (Chinese) are stupid.  What they traded for was a bit of control of the faith value of the dollar and therefore the ability to manupulate or potentially destroy it.  Who are the real idiots here.  In my opinion, Americans selling their country's soul for cheap tvs getting brainwashed through these same tv's by their own govt. into believing it's all good and that dollar faith will go on forever no matter how much they debase the priviledge. 

Sat, 11/07/2015 - 13:39 | 6761739 milking institute
milking institute's picture

Just for fun: one metric ton of gold visualized...     http://demonocracy.info/infographics/world/gold/gold.html

Sat, 11/07/2015 - 10:15 | 6761313 JustObserving
JustObserving's picture

its total gold holdings as of October 31 had risen to a record $63.3 billion, up $2.1 billion from $61.2 billion at the end of September, and an increase of 14 tons based on the month-end LBMA gold fix price

Gold is now $35 million a ton.  Gold holdings up $2.1 billion means China bought 60 tons of gold not 14 tons.  Of course, significant price increase from September to October may explain that difference of 46 tons.

The last honest Fed chairman explains why US is always attacking gold:

Paul Volcker: Gold Was the Enemy

“Gold was the enemy to me because that was a speculative vehicle while I was trying to hold the system together. [The speculators] were on the other side.”

Then and now, the gold price is viewed as the inverse price of the confidence in the system. If gold is high, it usually means something is amiss. In Volcker’s time, the high inflation and budget deficits of the 70s propelled gold from a low of $35 before 1970 to a high of $668 in 1980.

http://www.theepochtimes.com/n3/1299447-paul-volcker-gold-was-the-enemy/

Sat, 11/07/2015 - 10:39 | 6761367 achmachat
achmachat's picture

$2.1 billion is indeed 60 metric tons of gold.

There's some weird math going on in this article! I wonder what "currencies" the rest of that amount was bought in.

Sat, 11/07/2015 - 10:56 | 6761390 Latitude25
Latitude25's picture

Must be the total from the last few months when they started announcing monthly additions although the article clearly says it was one month.

Sat, 11/07/2015 - 22:09 | 6762813 The Ingenious G...
The Ingenious Gentleman's picture

I think this article is wrong.

According the Hong Kong Census and Statistics Department, China imported 97 tons of gold through Hong Kong alone last month.

http://www.bloomberg.com/news/articles/2015-10-27/china-gold-imports-climb-on-pre-holiday-buying-lower-prices

http://www.reuters.com/article/2015/10/27/china-gold-imports-idUSL3N12R3AM20151027#UUBFE8bAz8TSLE9u.97

Sat, 11/07/2015 - 10:14 | 6761321 Chupacabra-322
Chupacabra-322's picture

Cha, chink!

Sat, 11/07/2015 - 10:19 | 6761334 cowdiddly
cowdiddly's picture

You buy 14 tons and what do you get? Another day older with zero debt.

Dang Chinese Barbarians.

Sat, 11/07/2015 - 10:22 | 6761342 NoDebt
NoDebt's picture

That's not what they did.  Read further down.

 

Sat, 11/07/2015 - 10:52 | 6761386 Bokkenrijder
Bokkenrijder's picture

"You buy 14 tons and what do you get? Another day older with zero debt.

Dang Chinese Barbarians."

"Zero debt?!" China is FULL of (bad) debt! China will need every single Troy Ounce (kilo bar) to prevent their whole fraudulent financial world (stock bubble, housing bubble, all financed with cheap money) from imploding and the people occupying Tienanmen Square again. China is another civil war waiting to happen!

Sat, 11/07/2015 - 13:42 | 6761566 cowdiddly
cowdiddly's picture

Its bad debt in fiat money. That goes poof SO WHAT

I have watched the gold market close for 20 years. I watch the daily flows from Shanghi, Comex and ETF inventories and Swiss refining numbers ect..

You can multiply that stated gold nunber by a factor of ten by my best guess estimates. I and many others think they have probably amassed enough to nuke the pesky little dollar at anytime they so chose. This massive amount of gold has gone somewhere and if you believe anything stated in this article is factual, then I have a bridge to sell you.

The Chinese invented Fiat. And you think you are going to beat them at this game? LMAO you have been played sucka.

And Keep laughing at those ghost Cities and infrastruture China built for far into the foreseable future. Cause guess what? Its hard tangible assets. AND IT COST THEM NOTHING. They will let the Yuan go down the toilet, they are just milking out the last drops while the getting is good, THEN POOF. And so what if it does go POOF, cause hey i got this empty Apt building and want to take out a loan in the new shit dollars, and start the whole charade over again. The cities, shipping terminals, bullet trains, the factories, The skyscrapers- they are worth trillions upon trillions and don't go POOF. Then they just dropped the one child policy and in 20 years they are full. Thats your future gaurantee of GDP. You guys and your plans on making the next QTR? PFFFFT They look out 5yr,10yr. 100 yr plans.

Feeling like the mark at the Poker table yet? HA.

They are not worried about a stupid fiat currency mate, yours or theirs. Just keeping up appearance.

They just did in 30yrs what took the rest of the world 300. Wanna play fiat bitchez?

But keep on believing the mainstrem hype of how bad China is sinking while our own countries in reality circle the drain.

Sat, 11/07/2015 - 13:49 | 6761754 38BWD22
38BWD22's picture

 

 

You may overestimate China.

The concrete doors of the new lock in that part of the Canal are leaking water.  Already.

Those new cities have buildings that need maintenance that they are likely not getting.  Open to the weather, food-stalls, squatters, etc.  Where will those squatters go when their toilets stop working?

 

Sat, 11/07/2015 - 14:51 | 6761767 cowdiddly
cowdiddly's picture

You ever meet a Chinese policeman or look at how their court system works? There is a reason you see zero squatters in the pictures of these places. They.ve been dealing with squatters for the last 6000 yrs.

But to answer your question on where the squatters will go? Well last I heard it was LA. and Vancouver. The first one who makes it to OKLa , can have this cow patty I run, if he brings enough fiatski ying yuans.

But yea they might have to fix a  broken pipe or paint a wall. A chinese Plumber/Painter makes what, 10 Bucks a day? Pfffft.

Nice bearings you got there friend, where did you manage to find those things? Lol

Peace-just cuttin up

Sat, 11/07/2015 - 10:19 | 6761336 nmewn
nmewn's picture

I'll believe it when they submit to an independent audit, until then, it's just numbers on a ledger.

What does Vice Public Security Minister Meng Qingfeng have to say about this "rumor"? ;-)

Sat, 11/07/2015 - 10:36 | 6761364 VinceFostersGhost
VinceFostersGhost's picture

 

 

The reason we have all those guns at Fort Knox.....is to keep people from looking in there.

 

We haven't audited that place in decades....and I can guarantee you it's not gonna happen tomorrow.

Sat, 11/07/2015 - 11:07 | 6761409 Grimaldus
Grimaldus's picture

Thank you. I mean really, "china reports" ???? Like what they say is the truth?

It should be "china lies again". They are almost as bad as any progressive.

 

 

 

Grimaldus

Sat, 11/07/2015 - 10:23 | 6761346 NoDebt
NoDebt's picture

Can kicking, China-style.  All the cool fiat kids are doing it.

Sat, 11/07/2015 - 10:30 | 6761354 franciscopendergrass
franciscopendergrass's picture

When they remake the movie Goldfinger, the villian will be Chinese.  The movie will be renamed Gord Finga.

Sat, 11/07/2015 - 11:40 | 6761494 mijev
mijev's picture

Bitcoin finger doesn't quite roll off the tongue so easily.

Sat, 11/07/2015 - 10:34 | 6761363 Omega_Man
Omega_Man's picture

Hopefully soon the US dollar will be worthless and there will be no more money for the CIA and US Gov to make trouble in the world. USA will implode with civil strife and descend into hell as punishment for all the bad things they have done to mankind. 

Anything that Gold or nations like China can do to bring this more quickly is welcome. 

Hopefully the end game is to bring the US dollar to zero... so get some gold and silver to protect your wealth and be able to trade. 

This evil US BS money they create and then use as a weapon and to steal goods and the world's resources needs to be outed for what it is. Pure shit like the people who create it and spread it around to bribe people, and use it for evil deeds. Hopefully the US people will wake in time and destroy these people... but it is doubtful. 

Sat, 11/07/2015 - 10:45 | 6761374 Seasmoke
Seasmoke's picture

Unfortunately. USD is closer to $198 than Zero. I think we might be on the wrong side of the fight holding Gold. The winners get to write History.

Sat, 11/07/2015 - 10:54 | 6761392 Omega_Man
Omega_Man's picture

it could go supernova - then explode!!!  When it gets to strong it will be too high to use in trade... also those who owe in USD will refuse to pay... foreign govs will hopefully ban it's use..

any nation that has QE is bankrupt anyway... about time we realized that. China needs to demand payment in non USD

Sat, 11/07/2015 - 10:57 | 6761396 Latitude25
Latitude25's picture

Gold buyers are happily soaking up Venezuela's gold.  Maduro is an idiot.

Sat, 11/07/2015 - 15:37 | 6761695 The Dogs of Moar
The Dogs of Moar's picture

Is selling gold not like selling anything privately?  The seller gets to choose the buyer and the price of the object sold'

Did Maduro sell Venezuela's gold to the Saudi's or Kuwatis because they bid 37 cents more per ounce than China?

With global politics today, I doubt it. 

Sat, 11/07/2015 - 11:06 | 6761408 lester1
lester1's picture

So for all you gold haters out there, if gold isnt valuable, why is China buying it en mass?

 

Why is gold stored in underground vaults guarded by guys with machine guns?

 

You tell a girl you are rich in gold and she wants you. You tell a girl you are rich in bitcoins she laughs in your face and calls you a geek.

Sat, 11/07/2015 - 11:22 | 6761442 FireBrander
FireBrander's picture

Who said gold isn't valuable? Of course it is and that value changes daily.

You "gold lovers" refuse to accept the reality of "Buy and Hold" not being a "no lose" strategy.

Government can (AND HAVE) steal your wealth through gold just as easily as anything else...review history.

Mon, 11/09/2015 - 02:01 | 6766386 Not My Real Name
Not My Real Name's picture

It isn't gold's value that is changing -- it's the dollar's value. 

Sat, 11/07/2015 - 11:42 | 6761499 silvermail
silvermail's picture

- If the gold - a "barbarous relic of the past."
- If the gold - it's just "tradition."
- If gold - is "not important".
That is why it is important never to do an audit of volumes of gold in Fort Knox?
Why should it be a secret from all the world's people, if gold does not matter?!

Sat, 11/07/2015 - 11:45 | 6761504 VinceFostersGhost
VinceFostersGhost's picture

 

 

That's a buckeye!

 

Ya smartass.

Sat, 11/07/2015 - 11:47 | 6761515 Kirk2NCC1701
Kirk2NCC1701's picture

Let's cut the crap and speculative wanking:

As long as China plays the Deception & Manipulation game, the same way that other CB's and Banksters do, we have NO way of "knowing" what their true intentions are -- besides a good chunk of the gold being moved into the hands of their oligarchs, many of whom are moving their gold out of the country. They hedge their bets by going global. Duh!

When you cannot proceed on Trust (reliable data and trustworthy behavior), you have to proceed on Principle.

And Principled investing means that you Diversify and Allocate prudently. Although it's fine to Speculate with a small percentage of your overall portfolio, let's be honest and clear here: you are Gambling. That's OK and can be fun (and not just for Adrenaline junkies), just don't go overboard.

If you don't keep your gambling habit on a short leash, then it will put You on a short leash. Invest/Allocate and Gamble accordingly.

Sat, 11/07/2015 - 13:51 | 6761756 38BWD22
38BWD22's picture

 

 

True dat.

Diversification is about the best protection there is.

Gold is part of dviersification.

Sat, 11/07/2015 - 12:13 | 6761565 Consuelo
Consuelo's picture

"...but because in China's attempt to get an IMF stamp of approval it wants to show a diversified asset base."

 

Looking through a purely geopolitical lens, I have to wonder just how much China needs (or wants) 'IMF approval' for anything...?

 

"As for China's ongoing accumulation of gold, we expect it to get no coverage in the press at all."

 

Assuming we're not in a Brandon Smith alternative geopolitical universe, China will use its gold reserves at an opportune time of its choosing, to direct events in its favor.    Gold is a 'weapon' after all, and although no shots need be fired with its use, it can nonetheless precipitate shots being fired if a desperate dying hegemon considers its use an act of war.   We shall see --

Sat, 11/07/2015 - 13:02 | 6761669 Fenix
Fenix's picture

Can anyone comment why is it so cheap? Is it legit? 12 euros for American Eagle https://www.eurgold.eu/silver/silver-coins/american-eagle-1oz-silver-coi...

Sat, 11/07/2015 - 14:03 | 6761778 justdues
justdues's picture

Yeah , that does n,t make sense . Their own site quotes silver in Euros at eur 13.76,  shipping from Estonia which is VAT free so no tax cost ,yet American Eagles 12 eur each ?? They dont seem to be making it up on overpriced shipping at least not in quantity, generous special offer or scam ? Maybe just buy a small amount and see if its for real ?

Sat, 11/07/2015 - 13:10 | 6761682 DrZipp
DrZipp's picture

China is a polluted shithole facing ecological collapse one day.  If you can get out you do.  The elites are sending their familiies out, they call them 'naked officials' and it makes the leaders nervous.  So they are selling t-bills, using the strong dollar to buy gold.  It either never leaves the Swiss vaults or when it gets to China as physical it is resmuggled out ASAP.  

Sat, 11/07/2015 - 14:20 | 6761811 Magnum
Magnum's picture

Polluted shithole indeed. You have to see it to believe. A sad comment about humanity, after going to China and seeing the pollution not just in cities but far away also, I have a sense of disgust for Chinese people in general, unfortunately.  They can blame themselves for their ecological catastrophe.  Maybe I'm missing something.  I'd like to reduce immigrant numbers from china just thinking they'll come here and bring their stinking pollution ways with them.  

Sat, 11/07/2015 - 13:35 | 6761728 InnVestuhrr
InnVestuhrr's picture

I hope the chinks buy ALL the shiny lead and sell their treasuries to do it, so that the treasury prices fall and I can buy more of them at a higher yield, while they sit on their piles of inert substance.

Sat, 11/07/2015 - 15:05 | 6761886 tenpanhandle
tenpanhandle's picture

At zirp, UST's are fairly inert, also.  Return free risk.  When the faith is gone, gold remains.

Sat, 11/07/2015 - 15:54 | 6761973 InnVestuhrr
InnVestuhrr's picture

Absurd nonsense - my treasuries are paying ME interest that I use to pay MY living expenses - that is valuable activity. Your shiny lead requires YOU to pay to transact it and to pay ITS keeping expenses, ie big waste of money. The faith in treasuries worldwide, in spite of the incompetence of the USA regimes, is strong and will outlive you.

Mon, 11/09/2015 - 01:04 | 6766290 onmail1
onmail1's picture

West had always sold gold & bought provisions

When they run outta gold they attack & loot it back(colonialism)

However this time eastern gold is backed by nuclear bombs

(except Indians , they can gift all the gold to west, whenever asked)

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