Friday, August 9, 2013

Gold Bullion Stories That Caught My Attention This Week

Demand for Gold is Still Very Strong in Asia

Huge increase in gold being smuggled in to India.

Vietnam's central bank sold 52 metric tons of gold to domestic (Vietnamese) banks and institutions since March 28th.  "the sales were aimed at boosting domestic supply and helping local institutions stock up on the yellow metal to pay back gold depositors who put their gold savings into banks some years ago."  Is there a gold run going on Vietnamese banks and institutions by depositors who now want to hold the physical in their hot hands?

Premiums for physical gold at the Shanghai Gold Exchange remain elevated

If I were in China's position, I would create an alternative to the ever printing US Dollar.  The author describes what this alternative could look like and how it could be implemented.  At this point the only evidence of China pursuing such a strategy is that "Yao Yudong, a member of the People's Bank of China's Monetary Policy Committee recently penned an article in the China Securities Journal, in which he called for a new Bretton Woods system. This would help stabilise the global exchange rates. By implication, he is calling for a return to the gold standard."  Oh yeah and one more thing: China is hoarding gold.

A New 'Supply' of 400 ounce Gold Bars?
It is not new gold.  But this is the first time that someone has redeemed units of the Sprott Physical Gold Trust (PHYS) for bullion.
The PHYS trust includes a process to redeem shares or units for bullion.  Redemption requests must exceed the value of one London Good Delivery Bar, which is about 400 troy ounces.  The recent redemption was for 8,292 ounces.  The trust held 11,616,833 ounces as of June 7, 2013.  
Was this just a skeptical investor or a test run for something bigger.  Perhaps this will eventually explain why the market value of the trust's shares has been trading at a discount to the market value to the bullion in PHYS.  Are the bullion banks suppressing the share price and purchasing more shares on the cheap so that they can get their hands on more bullion?  Are they that desperate?  

Battle for $1,300
And what a week for the gold price!!  It endured several smashes and dropped well below $1,300 a couple times.  But, the bulls pushed the price right back above $1,300 each time.  Hopefully this is the bottom and we can now start building.

Just one more thing . . . 

No comments:

Post a Comment