Welcome to illuminati silver, we tell you the truth about silver.
Today is Monday 21st March 2016 and we are analysing an article published by Bullion
Vault suggesting that there is plenty of gold in London despite what the pumpers claim.
A little over a week ago Bullion Vault published an article by Adrian Ash (who runs their research
desk) entitled “China & India’s Hotel California for Gold”, in which he highlights
that although gold imports can go into these countries, they generally cannot get back
out.
To those of us who follow the gold market, this suggests of course that this can only
be bullish for gold prices.
However, within India for example, this can mean something very different, especially
as large discounts are currently hitting India’s gold retailing Industry.
According to Ash “Whereas, with India's wholesalers currently glutted with gold – but
unable to ship it out to the world's wholesale bullion market – discounts have yawned to
$50 below the global benchmark of London prices.
A similar but less dramatic discount hit China in 2014, thanks first to the huge flows sucked
in during the previous year's gold price crash, but also to the explicit ban on re-exporting
excess stockpiles.”
He adds “it is India's inability to re-export bullion which really distorts and damages
its domestic gold industry…….
Contrast London – heart of the world's wholesale bullion trade.
Metal comes in, metal goes out.
So much of the stuff, in fact, that gold bullion regularly features in the UK's top 5 imports
and exports, despite the UK having zero mine production, no wholesale-market approved refineries,
and next-to-no consumer demand……
But that still leaves 1,000 tonnes accrued by bullion banks, their clients, and other
private owners of wholesale gold in London vaults since 2005.
And if prices continue to rise, one can only expect the pattern of net inflows -- led of
course by those same money managers and wealthier families whose investment pushes up prices
-- to return as well……..
Either way, there is plenty of gold traded globally outside the big Asian centres – and
there is currently plenty of metal available in London's wholesale market, too.”
Now Adrian also has a comment concerning the shortly to be introduced Shanghai Gold Fixing
arrangement, this is what he says: “Meantime, "sources" say that April 19 will
bring the first-ever Shanghai Gold Fixing – a new benchmarking auction to ape and
then overtake the century-old process now refreshed in London as the LBMA Gold Price.
Good luck with that.
Ten banks classed as market makers will bid and offer metal to help find that single price
which does the most business.
But lacking the ability to ship out bullion to the wider world, China's new fixing will
remain a wholly Chinese affair.
It's the ability to ship it out which entices it in.
Maybe someone should tell Beijing, never mind New Delhi.”
So there you have it.
Plenty of gold in London, and if prices rise, even more may appear and a limited threat
to be encountered by the New envisaged Shanghai system.
Interestingly in a note to us, Adrian pointed out quote: “I do find it signal that, since
we first reported strong selling by private Western investors to match the upturn in interest,
several major US and UK coin outlets are now advertising "special" deals on popular items
-- suggesting that they too have seen a rise in customers selling.”
So to us this simply means, whilst indeed precious metals have firmed and may continue
to do so short term, be under no illusion that the shortages the pumpers are attempting
to frighten you with do not exist and also it is very unlikely indeed that any activity
carried out by China or any of these proposed Banks will have a limited impact on price,
again contradicting what the pumpers would have you believe.
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Disclaimer:
Illuminati Silver owners come from a background of Banking, International Wealth Management
and Economics.
Having now retired from these worlds we are not qualified to give investment advice.
Therefore, this and other productions must not be deemed to be giving such advice and
merely represent the personal views of its owners.