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Central Banks Quietly Accumulating Gold - Declared Purchases of 206 Tons Through September 2011

Tyler Durden's picture





 

From GoldCore

Central Banks Quietly Accumulating Gold - Declared Purchases of 206 Tons Through September 2011

Gold is trading at USD 1,759, EUR 1,271.10 , GBP 1,097.40, JPY 137,261, CHF 1,552.30 and AUD 1,690.40 per ounce.

Gold’s London AM fix this morning was USD 1,756.00, GBP 1,096.47, and EUR 1,269.61per ounce.

Yesterday's AM fix was USD 1,732.50, GBP 1,083.69, and EUR 1,257.25 per ounce.

Cross Currency Table

Gold is lower in most major currencies including in US dollars after rising more than 1% in majors yesterday. Prices remain near their highest in six weeks as uncertainty surrounding the euro zone debt crisis and the prospect of a Greek exit from the euro continues to support.

Gold appears to have broken out above resistance at $1,750/oz after consolidating between $1,600 and $1,750 in recent weeks.
Demand for gold bullion remains broad based and global in nature. One of the most important sources of demand continues to be central bank demand.

According to data from the IMF, central banks continue to be significant net buyers of gold. Mexico has added most to its reserves, with a net 83.7T of gold between January and September 2011, followed by Russia, which has added 59.3T this year, and Thailand, which has added 52.9T (see chart).


 
Central Bank Purchases of Gold So Far in 2011

Many market participants and non gold and silver experts tend to focus on the daily fluctuations and “noise” of the market and not see the “big picture” major change in the fundamental supply and demand situation in the bullion markets – particularly due to investment and central bank demand from China, India and the rest of an increasingly wealthy Asia.

The central banks of India and China are rightly believed to be again quietly accumulating gold and the IMF figures do not include this potentially very important and significant source of demand.

China’s gold reserves are very small when compared to those of the U.S. and indebted European nations. They are miniscule when compared with China’s massive foreign exchange reserves of over $3 trillion.
 

The People’s Bank of China is almost certainly continuing to quietly accumulate gold bullion reserves. As was the case previously, they will not announce their gold bullion purchases to the market in order to ensure they accumulate sizeable reserves at more competitive prices. They also do not wish to create a run on the dollar – thereby devaluing their sizeable reserves.

The deepening Eurozone debt crisis and real possibility means that central bank demand will remain robust and may even increase in the coming months.

Central bank demand has put a floor under the gold market and will likely help propel prices above the nominal record high in the coming weeks.

Comparing the gold market of today to the gold market of 1980 is ridiculous. Talk of the gold bubble bursting remains extremely ill informed.

For breaking news and commentary on financial markets and gold, follow us on Twitter
NEWS
(Reuters) -- Gold eases after rally, holds near 6-week top
http://www.reuters.com/article/2011/11/04/us-markets-precious-idUSTRE7A0...

(MarketWatch) -- Gold futures climb to six-week high
http://www.marketwatch.com/story/gold-futures-climb-past-1750-an-ounce-2...

(Bloomberg) -- Gartman Sees Gold in Euros at Record as Currency Slides: Chart of the Day
http://www.bloomberg.com/news/2011-11-03/gartman-sees-gold-in-euros-at-r...

(24.com) -- G20 mulls global liquidity boost using IMF
http://www.fin24.com/Economy/G20-mulls-global-liquidity-boost-using-IMF-...

COMMENTARY
(Bloomberg) -- James Rickards on the U.S Dollar, Treasuries, Euro and China
http://www.bloomberg.com/video/79517616/

(Barron’s) -- Gold Clears Key Hurdle: Can It Hold? ABX, GG Lead Miners Higher
http://blogs.barrons.com/focusonfunds/2011/11/03/gold-clears-key-hurdle-...

(ZeroHedge) -- MF Bankruptcy Causes Biggest Foreign Bank Liquidity Scramble To 'Fed Safety' Ever, Harbinger Of Major Eurobank Stress
http://www.zerohedge.com/news/mf-bankruptcy-causes-biggest-foreign-bank-...

 


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Fri, 11/04/2011 - 07:27 | Link to Comment Mongo
Mongo's picture

SPAM!

Fri, 11/04/2011 - 07:41 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

I like green eggs, gold, and ham to go with my spam.

Fri, 11/04/2011 - 07:42 | Link to Comment legal eagle
legal eagle's picture

You mean BAM! We at ZH are not quiet about our gold acquisitions!

Fri, 11/04/2011 - 09:00 | Link to Comment Michael Victory
Michael Victory's picture

 

 

see it, hold it, smell it...

WATCH: Jimmy Rickards talks Gold On Bloomberg

Fri, 11/04/2011 - 09:34 | Link to Comment theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

Buffalos are the coolest looking coin.

I'd buy some if the premiums weren't so big

Fri, 11/04/2011 - 09:25 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

"The central banks of India and China are rightly believed to be again quietly accumulating gold and the IMF figures do not include this potentially very important and significant source of demand."

...........................

China quietly purchases gold and accumulates it in various 'soverign wealth funds', such as SAFE. Occasionally China transfers gold from their SWFs to their central banks... that is when they make announcements of their accumulations.

My personal belief is that China is under reporting the amount of gold they are accumulating... as did Saudia Arabia when they announced they had 'found' some more gold and their reserves increased from 143 tons to 323 tons.

If you believe that gold and oil never flow in the same direction it is difficult to believe that the Mid East oil exporters are not under reporting their gold reserves. After all, there is no law that requires a soverign or central bank to report their gold holdings... Ask the Fed.

Fri, 11/04/2011 - 07:27 | Link to Comment knight99
knight99's picture

Gold bitchez

Fri, 11/04/2011 - 08:27 | Link to Comment i-dog
i-dog's picture

Why are they wasting time and money on collecting a barbarous relic when there are problems in the EZ waiting to be solved!?!

Fri, 11/04/2011 - 08:28 | Link to Comment bernorange
bernorange's picture

That's easy - tradition!

www.pmbug.com

Fri, 11/04/2011 - 07:29 | Link to Comment TIMMAYYY
TIMMAYYY's picture

Fail UK....brown was such a twat

Fri, 11/04/2011 - 07:36 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

It's OK, you have the King.

Fri, 11/04/2011 - 07:55 | Link to Comment CPL
CPL's picture

I would love to be given power and money by proxy of falling out of some slut's cunt.

Fri, 11/04/2011 - 08:13 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

I meant Mervyn King but I don't disagree, excuse the miscommunication.

Fri, 11/04/2011 - 07:29 | Link to Comment HD
HD's picture

Just wait till the Fed tooth fairy comes to pry out your gold fillings in the night...Ben will leave you a post 1986 nickel however.

Fri, 11/04/2011 - 08:09 | Link to Comment goldfreak
goldfreak's picture

you meant post 1946 nickel

Fri, 11/04/2011 - 07:30 | Link to Comment Motley Fool
Motley Fool's picture

Intermission over. Back to the show. :P

Fri, 11/04/2011 - 07:32 | Link to Comment Spitzer
Spitzer's picture

The ECB has more gold then the US. The Fed has basically none.

Just sayin...

Fri, 11/04/2011 - 07:34 | Link to Comment EL INDIO
EL INDIO's picture

US had 8133T  in 2010 !

 

Is it not in 1971 ?

 

Shows us the Gold (or the copper or whatever)

 

Fri, 11/04/2011 - 08:03 | Link to Comment Sudden Debt
Sudden Debt's picture

It's in the Rocky mountains!

Rumor has it that those 8133T are based on the geological reserves in the mountains. They just need to be dug up....

 

Fri, 11/04/2011 - 13:03 | Link to Comment earleflorida
earleflorida's picture

some rumor mongers/ conspiracy theorists say/claim that the vaults in the WTC were storage facilities for vast amounts of the PM

any whoo,... just a rumor, eh? 

Fri, 11/04/2011 - 07:34 | Link to Comment apberusdisvet
apberusdisvet's picture

 

Let's hope for true price discovery when the Pan Asian Gold Exchange is fully operational.

Fri, 11/04/2011 - 07:35 | Link to Comment EL INDIO
EL INDIO's picture

Oh yeh, you mean the one that just approved JPM china to operate there ?

Fri, 11/04/2011 - 07:44 | Link to Comment theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

Thats utter BS - you won't get price discovery from that bullshit exchange, not from litigation, not from gata, not from lawsuits, not from "making people aware" etc etc

Price discovery will come when the physical market trumps the paper market

Fri, 11/04/2011 - 07:49 | Link to Comment EL INDIO
EL INDIO's picture

That's right, when your coin and bullion dealers refuse to sell you at the COMEX/LBMA/whatever price quotes then you will have true prices.

It will also be game over.

Fri, 11/04/2011 - 08:36 | Link to Comment HoofHearted
HoofHearted's picture

We reached that in silver already. Gold is sure to follow...

Fri, 11/04/2011 - 09:33 | Link to Comment theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

We haven't reached it in silver yet either. Sure apmex and other dealers didn't have any on offer at 26 bucks, but the wholesalers, or a firm like goldmoney.com did. It was just bottlenecking and dealers choosing to hold on because they knew they price would bounce off the bottom by at least 10%

the day you can't buy from goldmoney.com, bullionvault, or go direct to a mine and buy wholesale at the spot price, thats the day it all unravels...

Fri, 11/04/2011 - 09:31 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

"That's right, when your coin and bullion dealers refuse to sell you at the COMEX/LBMA/whatever price quotes then you will have true prices."

..........................

Indio, you left out fiat... then we will have a true exchange rate of labor for gold. No more paper for gold.

Fri, 11/04/2011 - 08:49 | Link to Comment Smiddywesson
Smiddywesson's picture

Let's hope for true price discovery when the Pan Asian Gold Exchange is fully operational.

Sorry, not gonna happen.  Take a look at that chart up above.  Kicking the can and keeping gold prices low is allowing China to accumulate gold and make the transition to a gold standard.  The Western nations have collectively 19,269 tons of gold and China has only 1054 (that we know about).  That excludes all the other members of the EU and the ECB itself, which is probably over 70% backed by gold at this time.  There's no way in Hell China would upset that scam, they are the cheif beneficiaries of the status quo, and you can see that in their actions inasmuch as they are coordinating margin hikes and buying in a slow and measured fashion. 

Now I have said on this site numerous times that the Fed and the EU are going to screw China, but it is clear that for now, their self interests are all aligned in one big scam:  Kick the can and suppress gold prices.

PS:  I am overwhelmed by the chart up above.  I had no idea how far these countries have progressed in replacing the foreign currencies component of their balance sheets with gold (for the most part), and how far behind the game China is.  Inasmuch as central banks always lie, I would be willing to wager we are even closer to end game then the chart shows.

Fri, 11/04/2011 - 09:48 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

SW... China isn't 'behind this game'. China has been playing the game for 5,000 yrs and their population has the highest overall IQs in the world save the Jews, who are first as a group in IQs.

If you think of the continuous horrendous circumstances both groups have suffered it's easy to think that only the smartest lived to reproduce. Neither the Chinese nor the Jews are simple minded... Both groups have been to far more schools of hard knocks than the average American.

Anyway, why would China or any other soverign report their gold reserves when the US Fed does not?

If a soverign reports it's total gold reserves and is then invaded, the invaders will look for all the gold thats been reported. Why not under report and avoid losing all one's gold to invaders? Perhaps Gaddafi could answer this one?

Fri, 11/04/2011 - 09:50 | Link to Comment youngman
youngman's picture

China has computers too...and an army of hackers doing their dirty work......I bet alot of the PM´s "crashes" were China induced...you bet they are buying gold....in thier eyes...the long term..they want to be the worlds reserve currency...and when they own enough..and enough commodities..they will shit out the dollars and let the world know what the new standard is...if you want to buy their coal, oil, rare earths....you buy in their currency

Fri, 11/04/2011 - 10:07 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

You bet, youngman. We are seeing a huge transfer of gold from West to East and the morons playing the paper gold/take physical delivery game are assisting the transfer.

Fri, 11/04/2011 - 07:39 | Link to Comment Sudden Debt
Sudden Debt's picture

Luckely, the US and EU have already so much of this stuff that they don't need to buy it.....  .... ..... I wonder who sold again.... ... ...

 

Fri, 11/04/2011 - 07:45 | Link to Comment legal eagle
legal eagle's picture

Fort Tungsten!

Fri, 11/04/2011 - 07:50 | Link to Comment EL INDIO
EL INDIO's picture

Tungstenfinger!

Fri, 11/04/2011 - 09:11 | Link to Comment Smiddywesson
Smiddywesson's picture

It's been apparant for over a decade where this is heading.  It's been crystal clear for several years it is unavoidable that paper currencies are going to fail.  So why would the Fed and the Treasury, with unlimited funds, enjoying near complete secrecy, not replace the gold?  I don't doubt for a second that the gold was moved around to facilitate their scam, but they have had the ability to replace it and every reason to do so.  I would bet that gold is there, or nearly all replaced by this time.  TPTB have no intention of abdicating the throne.

Here's a source of bullion.  The prospectus of the GLD requires the fund to track the price of gold, but it doesn't require it to hold any gold at all.  They could have already moved out that $70.26 billion in bullion and replaced it with paper.  That's 2,500,711 pounds of gold, or 1250 U.S. standard tons. 

From our perspectives, kicking the can has been very self destructive.  But, from the perspective of TPTB, kicking the can has bought them time to set up a new gold referrenced standard.  I have to believe we are kicking the can so countries that don't have gold can get up to speed, and countries that are supposed to have gold, but leased it out, can replace it.

Fri, 11/04/2011 - 09:53 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

Since world gold production is only ~ 2,500 tons per year and normal demand for jewelry, coins and industrial use is 3,500 tons per year, where did all the gold that the US supposedly replaced come from?

China is now the worlds largest gold producer, surpassing S Africa several years ago, and China isn't exporting any gold... except a very few Pandas with high prices on them.

Fri, 11/04/2011 - 07:42 | Link to Comment Clowns on Acid
Clowns on Acid's picture

Ron Paul...Go find our gold !! If we have any left.

Fri, 11/04/2011 - 08:07 | Link to Comment Sudden Debt
Sudden Debt's picture

No Problem! Let's just check everybody's visa bills for purchases that have the word "Gold" and "Bullion" in it and they'll have found already 1/3 of what they need!

Fri, 11/04/2011 - 08:06 | Link to Comment Anne Ominous
Anne Ominous's picture

BOOM...

Fri, 11/04/2011 - 08:09 | Link to Comment N57Mike
N57Mike's picture

Could Mr. Banzai or the ZH cultural committee come up with a poem, to celebrate the investment theme stacking. Something along the lines of imortal Robert Frost' "I am a bender of birches"... but set to a theme of the joys of stacking.

Fri, 11/04/2011 - 08:22 | Link to Comment ZeroPoint
ZeroPoint's picture

Bernake must be 'perplexed' with all this 'traditional' supersticion about buying all this 'barberous relic'.

Fri, 11/04/2011 - 08:29 | Link to Comment bentaxle
bentaxle's picture

Just gotta love the hypocrisy!

And Tajikistan has a central bank? Ex-Goldman employees by any chance?

Fri, 11/04/2011 - 08:41 | Link to Comment jez
jez's picture

This is all very well, but I'd have liked to see some details on the whereabouts of all this gold that has changed hands, or indeed the form in which it is being held by these central banks.

For example, we are told that Thailand has bought 53 tonnes of it this year. Does that mean that there's an extra 53 tonnes of it sitting in the Bank of Thailand's vaults? Or have they got nothing more substantial than some numbers on some bits of paper that add up to 53? If the latter, does anyone know for sure that this gold exists?

Fri, 11/04/2011 - 09:22 | Link to Comment Smiddywesson
Smiddywesson's picture

If the Fed and the ECB want this to end well, with countries like China and Thailand having currencies that are strong enough that we have any hope at all of some kind of balanced trade, then those countries have to stack gold before we shift to a new monetary system.  I suspect that is why gold prices are going up during their trading hours, but generally fall prior to our open and throughout the day. 

TPTB would love the emerging economies standard of living to go up and yours to go down so that trade is more balanced under the new monetary system.  That's why Joe China is being encouraged to buy gold, and Joe six-pack here in the West is being barraged by anti-gold propaganda.

This is all about kicking the can to create security for TPTB, not security for you. 

Fri, 11/04/2011 - 09:26 | Link to Comment TGR
TGR's picture

Good point. IFRS, or some other supposedly transparent set of reporting rules, should include a clause that if a listed or accountable entity is going to claim gold in its vault, it must be audited.

A seemingly innocuous rule likely to never see the light of day.

 

 

Fri, 11/04/2011 - 09:59 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

TGR... The only way an 'international gold audit rule' could be inforced is by war.

Gold reserves quantities are more closely guarded than nuclear secrets...Rest assured, any data released by any soverign regarding gold reserves is automatically suspect... I simply assume all are lying.

Fri, 11/04/2011 - 10:22 | Link to Comment TGR
TGR's picture

Yes, it would be largely unenforceable, just like most standards and ethical accounting measures some people assume these entities adhere to.

Though as the issue here is trust - not just between the banks (central or otherwise), but between the banks and the unwashed masses - maybe if some did get a well publicized gold audit from a reputable third party, others may feel obliged to follow.

Wishful thinking though, perhaps.

Fri, 11/04/2011 - 13:18 | Link to Comment earleflorida
earleflorida's picture

the "BIS" knows all -

China has been accumulating PM's for years, under the radar,... directly from the dirt farmers [especially their favorite 'hedge free' small miners - s.america, africa, and neighboring australia -

they steer clear of listed agents. why?  check out the distinguished oligarch ownership,... whom by the way controls  'basel' - which disseminates the massaged data of all!

Fri, 11/04/2011 - 08:57 | Link to Comment johny2
johny2's picture

Once most the unsuspecting monopoly game figures sell their wedding rings for cheap price, the monopoly game will be over, and there is going to be a new game with a new currency backed by tradition.

Fri, 11/04/2011 - 08:59 | Link to Comment BigInJapan
BigInJapan's picture

Aug 3, WSJ:

 

"South Korea became the latest government to disclose a big bullion purchase, saying Tuesday that it recently bought 25 metric tons - more than doubling its holdings to 39 metric tons. Mexico, Russia and Thailand have also been major buyers in 2011."

 

Yet the figures above have Korea listed at 0...

Surely they haven't sold...

Fri, 11/04/2011 - 09:26 | Link to Comment Smiddywesson
Smiddywesson's picture

Not necessarily the author's fault.  They all lie about CPI and GDP, does anyone think they are telling the truth about their acquisition of life jackets on this sinking ship?  Nobody knows how much gold the central banks hold, and I strongly suspect they lie to each other too.

Fri, 11/04/2011 - 10:01 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

I have no doubt that all soverigns lie about gold reserves all the time. For them to do otherwise would be dumb.

Fri, 11/04/2011 - 09:33 | Link to Comment Taffy Lewis
Taffy Lewis's picture

Somebody high up in Thailand must be a regular ZH reader.

 

Fri, 11/04/2011 - 09:46 | Link to Comment Kokulakai
Kokulakai's picture

 

 

I find it curious the price remains as stable as it has.

Is it due to the fact Mexico hasn't taken possesion of it's 83t ?

Has Venezuala secured delivery of their gold?

The emperor is naked, and has no gold.

 The hour grows late; Do you know where your gold is?

Fri, 11/04/2011 - 12:05 | Link to Comment xcehn
xcehn's picture

China's gold grab will lead to Chinese global hegemony.  Most likely China is looking towards eventually having a gold-backed currency.  The US and Europe are becoming increasingly irrelevant.

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