Lines Around The Block To Buy Gold In London; Banks Placing "Unusually Large Orders For Physical"

Tyler Durden's picture




 

This is the best quarterly performance for Gold in 30 years...

 

And as Mike Krieger of Liberty Blitzkrieg blog details, physical demand is soaring...

First, let’s look at the improved fundamentals. Gold bugs will exasperatingly proclaim that fundamentals have been great for the past four years yet the price plunged anyway, so who cares about fundamentals? To this I would respond with two observations. First, large institutional investors and sovereign wealth funds have been anticipating a rate hike cycle for a very long time now. They didn’t know when, but they expected it. The fact that the gold bugs never believed this is irrelevant; what matters is that big money believed it, and it was perceived to be very gold negative. In their minds, this anticipated rate hike cycle would confirm that things were getting back to normal, and if things are normal you don’t need to own gold, right?

 

The problem is that this assumption is quickly being called into question. Sure the Fed hiked rates once, but it is starting to look more and more like a policy error. Meanwhile, other major central banks around the world are going in the opposite direction, toward negative rates. I am a huge believer in market psychology, and the psychology dominating the minds of most institutional investors over the past few years has been that things were slowly getting back to normal. This has weighed on institutional demand for gold in a big way, and been a meaningful factor in the bear market (manipulation aside). If this psychology shifts, the shift back into gold could be very meaningful.

 

While that backdrop is interesting in its own right, what may make the move into gold that much more explosive is the lack of alternative investments…

 

– From the February 3, 2016 post: GOLD – It’s Time to Pay Attention

What a difference a couple of weeks can make. The Telegraph is reporting the following:

BullionByPost, Britain’s biggest online gold dealer, said it has already taken record-day sales of £5.6m as traders pile into gold following fears the world is on the brink of another financial crisis.

 

Rob Halliday-Stein, founder and managing director of the Birmingham-based company, said takings today had already surpassed the firm’s previous one-day record of £4.4m in October 2014.

 

BullionByPost, which takes orders of up to £25,000 on the website but takes higher amounts over the phone, explained it had received a few hundred orders overnight and frantic numbers of phone calls this morning.

 

“The bullion market has been building with interest since the end of last year but this morning things have gone bananas,” said Mr Halliday-Stein. “Some London banks are placing unusually large orders for physical gold.”

 

London-based ATS Bullion added it had been inundated with orders for the past week. The firm has sold 4,000 gold bars and coins since February 1, a 40pc rise on the same period a year ago when it sold 1,500.

 

“It’s been crazy – it’s been the best week since 2012. We’ve had people queuing round the block,” said Michael Cooper of ATS Bullion, a family run firm that trades online and also from an outlet in the West End.

But that’s just part of the story. As reported by the World Gold Council, the buying really started to pick up in the fourth quarter, courtesy of the Chinese and central banks. Reuters notes:

Buying by central banks as well as Chinese investors seeking protection from a weakening currency helped lift demand for gold in the final quarter of last year and the trend looks set to continue, the World Gold Council said on Thursday.

 

Chinese demand for gold coins surged 25 percent in the fourth quarter from a year earlier as consumers sought to protect their wealth after Beijing devalued the yuan currency. But stock market turmoil and a slowing economy knocked consumer sentiment and Chinese demand for gold for jewelry fell 3 percent from a year earlier, WGC said.

 

Central banks have been buying gold to diversify their reserves away from the U.S. dollar and their purchases edged up to 588.4 tonnes last year, second only to a record high 625.5 tonnes in 2013, the report showed.

 

Central bank buying accelerated sharply in the second half of last year and jumped 25 percent in the fourth quarter, from a year earlier, as the need to diversify was reinforced by falling oil prices and reduced confidence in the global economy, WGC said.

 

Chinese demand for gold totaled 985 tonnes last year, followed by India on 849 tonnes. They accounted for nearly 45 percent of total global demand, with consumer demand up 2 percent and 1 percent respectively in those countries.

Think about the lack of gold buying from the U.S. relative to its global wealth and it becomes quite easy to see where the fuel for the next bull market will come from.

Meanwhile, on the supply side…

Global supply of gold fell 4 percent last year to 4,258 tonnes, partly because of slower mine production.

 

Mining companies have scaled back since 2013 in a bid to slash costs and mine production shrank in the fourth quarter of 2015, the first quarterly contraction since 2008, WGC said.

* * *

Keep in mind, all of the above is nothing compared to what may happen in China once gold fever returns to the mainland like in 2013, as Caixin profiled before:

0
Your rating: None
 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 02/11/2016 - 13:17 | 7171357 44MagnumPrepper
44MagnumPrepper's picture

ALL HAIL NOPAT

Thu, 02/11/2016 - 13:22 | 7171391 Durrmockracy
Durrmockracy's picture

YES!!  Tick tock mf'ers!!

EDIT:  Time's UP!

Thu, 02/11/2016 - 13:28 | 7171420 Dame Ednas Possum
Dame Ednas Possum's picture

In gold we trust.

I bought two lovely 'ten tola' bars last weekend to add to the stack.

Thu, 02/11/2016 - 13:41 | 7171536 BaBaBouy
BaBaBouy's picture

And So It Begins........... GOLD Beeaches...

Thu, 02/11/2016 - 13:48 | 7171589 undertow1141
undertow1141's picture

I wonder if there is a bank holiday this weekend?

 

Thu, 02/11/2016 - 14:09 | 7171767 BaBaBouy
BaBaBouy's picture

WOW... Perfect Storm...

Comex Vaults Near Fucking EMPTY...
Commercials/Hedgies Paper Short...
QE-1-2-3 Fiats BLOWBACK...

Thu, 02/11/2016 - 14:21 | 7171834 unrulian
unrulian's picture

soul glow called march weeks ago. ..might be prophetic 

Thu, 02/11/2016 - 14:36 | 7171924 JRev
JRev's picture

Isn't there something like a 20% VAT tax on silver in the UK? 

"You must be this rich for currency insurance."

Thu, 02/11/2016 - 14:38 | 7171932 Silky Johnson
Silky Johnson's picture

Articles like this give me a funny feeling in my weiner.

Thu, 02/11/2016 - 14:40 | 7171943 Zirpedge
Zirpedge's picture

You aren't alone, this article is intended for the clueless royal libtard to get fleeced in an overcrowded trade. Also, it's Chinese new year, so yeah alot of Chinese lining up to buy shiney trinkets. 

Thu, 02/11/2016 - 14:48 | 7171972 hedgeless_horseman
hedgeless_horseman's picture

 

 

for the clueless royal libtard to get fleeced in an overcrowded trade

So, smart guys like you are buying Credit Suisse and Deutch Bank stock, today? Grab some SWN, too!  They are on sale!!!!

Thu, 02/11/2016 - 15:14 | 7172159 BobPaulson
BobPaulson's picture

Conviction buy AMZN now with P/E waaaay down below 400.

Thu, 02/11/2016 - 15:23 | 7172217 hedgeless_horseman
hedgeless_horseman's picture

 

 

Conviction buy AMZN now with P/E waaaay down below 400.

On margin secured with blue chips like Twitter, Facebook, NetFlix, and Tesla.

Thu, 02/11/2016 - 16:00 | 7172500 Tarzan
Tarzan's picture

If there are lines in London, why the pics from China?  The telegraph is also reporting

buyers "queue round the block" to purchase the precious metal, yet no pictures, what gives?
Thu, 02/11/2016 - 16:06 | 7172533 Bunghole
Bunghole's picture

I doubt there are any lines anywhere buying gold.

This is just another way TPTB are going to get sheeple into the pen.

Thu, 02/11/2016 - 16:28 | 7172650 Bokkenrijder
Bokkenrijder's picture

London? Fish, chips, cup 'o tea, bad weather, worse food, Mary fucking Poppins? Well, then there are certainly a lot of Chinese living in London!

All those pictures look like they were taken in China, and yes, the gold price went up, but "lines around the block?" Really ZeroHedge? Is this the National Enquirer?

Thu, 02/11/2016 - 17:13 | 7172897 Twee Surgeon
Twee Surgeon's picture

Silver, Money and Civil War. an old story, in a nut shell.

http://www.thelocal.dk/20160210/700-year-old-danish-civil-war-coins-foun...

Thu, 02/11/2016 - 18:21 | 7173230 KesselRunin12Parsecs
KesselRunin12Parsecs's picture

Let them eat TUNGSTEN!

Thu, 02/11/2016 - 20:45 | 7173970 eforce
eforce's picture

Gold is VAT free in the UK, gold sovereigns are legal tender.

Thu, 02/11/2016 - 18:24 | 7173243 Transformer
Transformer's picture

"London? Fish, chips, cup 'o tea, bad weather, worse food, Mary fucking Poppins?"

Snatch!

Thu, 02/11/2016 - 16:53 | 7172773 Joe Tierney
Joe Tierney's picture

You could stuff it in your bunghole - looks big enuff. And you'd have the added benefit of stink-based theft guard....

Thu, 02/11/2016 - 16:53 | 7172775 Joe Tierney
Joe Tierney's picture

You could stuff it in your bunghole - looks big enuff. And you'd have the added benefit of stink-based theft guard....

Thu, 02/11/2016 - 17:22 | 7172942 Osmium
Osmium's picture

It's actually a winning strategy too.

 

https://www.youtube.com/watch?v=DO1Q7F23DxM

Thu, 02/11/2016 - 22:34 | 7174534 HyperinflatmyNutts
HyperinflatmyNutts's picture

So u r saying people should not buy Gold? I don't care about a small price movement I buy a little every few months. As long as they have FRN i will continue to trade them for real money.  PS I buys Silver as well. 

Thu, 02/11/2016 - 22:38 | 7174535 HyperinflatmyNutts
HyperinflatmyNutts's picture

sorry d post

Thu, 02/11/2016 - 23:55 | 7174833 Bunghole
Bunghole's picture

I wouldnt be buying today.

Those pics are from a story Tyler ran years ago.

Thu, 02/11/2016 - 19:42 | 7173603 Antifaschistische
Antifaschistische's picture

I'm sure these are real pictures from a special event in China....but when i was in China in October of last year, the gold stores in the malls were empty.  Always 4 or 5 cute uniformed ladies working behind the counter, with no customers.  But...that was also when everyone was planning on getting rich in the stock market, and P2P lenders, and Real Estate.  Now that all those dreams are being shattered...they may return to gold with a vengence.

Thu, 02/11/2016 - 15:29 | 7172256 FreeNewEnergy
FreeNewEnergy's picture

Buy some BAC, an absolute bargain at 11.05. Only down 7.8% today.

Or you could wait to buy when it has a single-digit handle, like maybe Monday.

Thu, 02/11/2016 - 15:40 | 7172334 undertow1141
undertow1141's picture

I'm heavy gold and silver miners and happen to be up 7% on the day.

Thu, 02/11/2016 - 16:00 | 7172501 JRobby
JRobby's picture

This is nothing

The real chaos is yet to come

Thu, 02/11/2016 - 16:24 | 7172655 Tarzan
Tarzan's picture

Ya, I'll know it's begone for real when the Dow dumps 1.000pts in the morning and ends the day even lower, no ramp

Thu, 02/11/2016 - 21:59 | 7174360 Theosebes Goodfellow
Theosebes Goodfellow's picture

Well, not to claim I'm prescient, but I did pick up half a doesn't pieces yesterday.

 

....

 

What? What!?! I'm going boating this weekend! It's frickin' 80 degrees down here in the SoCal, fer' Pete's sake!

Thu, 02/11/2016 - 15:26 | 7172235 Pickleton
Pickleton's picture

"Rob Halliday-Stein"

 

Poor bastard, his dumbass feminist mother hyphenated him.

 

Thu, 02/11/2016 - 19:13 | 7173448 auracle
auracle's picture

or maybe he took his partner's last name...

Thu, 02/11/2016 - 22:01 | 7174372 Theosebes Goodfellow
Theosebes Goodfellow's picture

~"Poor bastard, his dumbass feminist mother hyphenated him."~

@Pickleton: That's the damned funniest thing I've read in a week. Thanks!

Thu, 02/11/2016 - 22:02 | 7174373 Theosebes Goodfellow
Theosebes Goodfellow's picture

Echo...echo...

Thu, 02/11/2016 - 23:50 | 7174829 KesselRunin12Parsecs
KesselRunin12Parsecs's picture

Now pinch hitting for Pedro Borbon, Manny Mota!

Thu, 02/11/2016 - 15:30 | 7172250 Countrybunkererd
Countrybunkererd's picture

What is worse is the coming storm against "Free Market Capitalism" by "Socialists" and "Communists" when what we are witnessing is really "Inter-National Socialism" like the NAZI's where the markets are not at all free.  The World In General is very close in behavior to 1930's and 1940's Germany but nobody sees the truth.  as to what to buy... "I think Chesapeake Energy!!!"... /s.  Gamble the 1 month timeframe if you are brave enough, I don't have the stones for that.

Thu, 02/11/2016 - 15:31 | 7172267 Countrybunkererd
Countrybunkererd's picture

Maybe I should say the IMF and CFR in general...there is a list of internationalists/globalists leading the charge and it is a long interconnected web of entities.

Thu, 02/11/2016 - 16:23 | 7172651 Zirpedge
Zirpedge's picture

You make one good point, the banks and insiders with access to the discount window will always come out on top. 

Thu, 02/11/2016 - 18:33 | 7173289 Bay of Pigs
Bay of Pigs's picture

Sure. Just like Bear Stearns and Lehman did?

Nice try assclown.

Thu, 02/11/2016 - 19:14 | 7173454 centerline
centerline's picture

Chances are, all the dumbfucks going all in for gold are going to squeezed out of that physical at rock bottom prices. 

Timing is a motherfucker. I'm with ZIRP here.  Seems I am in the minority - which is a comfort lately.

I look forward to buying people's gold at a fraction of the price when it really matters. 

Oh, and its not like hedging isn't worthy.  So, no binary bullshit arguments better follow from the ZH PM cheerleading squad.

 

Thu, 02/11/2016 - 22:20 | 7174463 kliguy38
kliguy38's picture

timing IS a motherfucker........enjoy your wait, one thing is certain either way you'll never own an ounce of actual gold 

Fri, 02/12/2016 - 02:46 | 7175263 FIAT CON
FIAT CON's picture

I will not be squeezed out of my gold ever.

 Thanks for the BS line though you sound good!

Thu, 02/11/2016 - 18:19 | 7173222 Zymurguy
Zymurguy's picture

Oh, yeah and don't forget to buy up as much Bitcoyn as you can, bitchez!  /sarc

Thu, 02/11/2016 - 15:10 | 7172130 NorthernPike
NorthernPike's picture

Zirpedge - I tried to one up you, but the system will not let me. That is OK as we live in a world of "Likes" of shiney trinkets related to lemmings dying to die. OMG! Gimme, gimme, gimme that thing. Keep on shining bro!

Pike

Thu, 02/11/2016 - 15:46 | 7172382 pods
pods's picture

I find it ironic that someone with a handle named "NorthernPike" would complain about people chasing shiny things.

Any pike fishermen out there know what I mean.

pods

Thu, 02/11/2016 - 16:21 | 7172640 Zirpedge
Zirpedge's picture

They have teeth like a Barracuda and hit like a ton of bricks. Fortunately, the shiney comes from their instinct to hit on healthy living bait fish..not barbarous relics.

Do NOT follow this link or you will be banned from the site!