More on China and Gold

King World News brings us a perspective from an anonymous "London Trader" who describes "Staggering gold demand leading to shortages".  Much of this is likely driven by Eurozone troubles and Greece's coming default:

The demand for euro gold here in London is so intense it’s shocking to some of the players.  This is what has left some market participants in the US wondering why the price of gold has risen along with the dollar.  It’s because demand in the eurozone is unimaginably strong.  The euro physical gold demand is off the charts and it is creating shortages for metal, in size, here in London.

The physical gold market is actually being drained by euro gold buyers.  People are converting their euros to gold and there is only a finite amount of physical gold available.  Again, that’s why you are seeing the dollar and gold rallying together.

He also apparently has similar thoughts about my previous post on China's gold strategy:

The Chinese are long-term thinkers and they really don’t care whether they are paying $1,600 or $1,700 for gold.  What they do is get the best price they can.  When the new floor eventually becomes $1,700, they will buy everything available at that price.  When it becomes $1,800 they will buy at that price.  They are just looking to accumulate gold and they are never sellers, never.

There are two things here.  Yes, China wants a cheap gold price and they’ve been enjoying the fact the gold market was taken down.  They have recently taken another roughly 150 tons away from the Western central banks.  The Western central banks essentially donated that gold in an attempt to prop up their paper currencies.  Yet again these traitorous Western central bankers have given away more power. 

I see gold as power and once again they have given it away to the Eastern Hemisphere.  The Chinese continue to laugh.  As much as the Chinese would like to have a cheap gold price and have this manipulation keep going, they also want to bring the renminbi to the center stage.  

To them, it’s more important the Chinese currency becomes the world’s currency.  The dollar, despite the latest rally, is dying, we all know it’s dying.  So, the Chinese are moving to become the international currency of the world and the best way to do that is through gold.  It’s a very clever tactic.  Every time more gold arrives in China, the more their currency is backed, the closer they move technically to becoming the world’s reserve currency.”

The flow of gold from Western vaults to Eastern vaults is the most important symbol of the decline of the West.  As the East rises, the West falls.  “So goes the gold, so goes the power.”  Remember to be your own central bank by owning physical gold.  Many in Europe have apparently figured this out as gold demand is, “off the charts.”

Keep in mind that China has essentially nationalized their own gold mine production with the government buying 100% of gold mined domestically. More importantly, they don't sell. Once gold is bought by China, its off the market as they become long term accumulators.


And finally I leave you with this: Zerohedge reports Pricewaterhouse Coopers surveyed mining companies and found that 80% of executives expect gold to increase this year to $2,000/oz.  Central bank purchases have increased in the last few years and are expected to continue.