A tale of two gold markets?

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pmbug

pmbug

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Two news stories from today:
Gold wrapped up the year with the biggest loss in six years, and analysts point to a lack of investor interest as one of the key triggers behind the precious metal's underperformance in 2021.
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GLD saw its biggest annual outflow in nearly a decade, losing approximately $14.1 billion in assets in 2021, which translates to around 195 metric tons worth of bullion. Based on the numbers provided by the GLD, this is the biggest annual outflow since 2013 ...
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www.kitco.com

Gold ETF suffers largest outflow in nearly a decade

Outlook 2022
www.kitco.com

...
Updated sales data released from the U.S. Mint on Monday showed demand for physical gold hitting its highest level since 2009. The U.S. Mint said that in 2021 it sold more than 1.25 million ounces of gold in various denominations of its American Eagle gold coins, up more than 48% from last year.
...
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www.kitco.com

U.S. Mint sees strongest gold coin sales in 12 years, sells 1.25 million ounces in 2021

Outlook 2022
www.kitco.com
 
11C1P said:
I'd add crypto currency to that. Honestly I think crypto is worse, at least if the power goes out you can burn paper to stay warm.
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I totally agree.

Crypto is not anonymous either, it only obfuscates the transaction party's identities. Just look what happened in several countries where credit, debit and digital transactions are the primary means of payment and certain individuals and groups no longer could buy or travel anywhere because their accounts were frozen for whatever reason the government claimed, valid or invalid. (Mostly invalid.)
 
I never understood cryptos but I notice the only safe security wise way to obtain it was to mine it yourself. At the time it wasn't cost effective.
To buy any crypto from another I saw as a Fool's Errand.
So as one of our Lost Leaders at the former camp would say " If you don't hold it, You don't own it" - Ponce (RIP).
 
BTW, the OP for this thread talks about market data from 2021. Today, sanctions on Russia prevent European nations from buying/importing gold from Russia which apparently was traditionally one of the largest suppliers. So one should logically expect a shortage of physical gold if demand has stayed the same, much less increased, in spite of whatever the paper gold market is signalling.
 
pmbug said:
BTW, the OP for this thread talks about market data from 2021. Today, sanctions on Russia prevent European nations from buying/importing gold from Russia which apparently was traditionally one of the largest suppliers. So one should logically expect a shortage of physical gold if demand has stayed the same, much less increased, in spite of whatever the paper gold market is signalling.
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A shortage is only possible if there is demand for physical delivery greater than available physical supply. Because gold has a socioeconomic function that is much more monetary than industrial we need a monetary catalyst for demand. This catalyst simultaneously must be met by a loss of confidence in any other liquid alternative.
 
Well, my point in the previous post was that supply has been severely constricted. IMO, it's likely the double whammy - constrained supply and increased demand
 
From YT vids I've seen it's apparent that the sanctions are doing NOTHING to Russia.

The Ruble is stronger than ever. The POO is filling their coffers faster than the US can steal $600B.

Russia prepared for this moment back when Obama kicked Iran off the SWIFT system. That was the 'wake up' call to the world.

Now there is a new kid in town and all nations of the world signed on except for one.

The dollar is in decline and the International Bankers need a world war to hide their fake fiat Great Reset.

I sure hope somebody doesn't set off a tactical nuke and blame it on Russia.
 
...
In a recent interview with Kitco News, Nitesh Shah, head of commodity research at WisdomTree, ...
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Shah said that he suspects the growing divergence between the physical market and the paper market is the reason why gold has performed well in the current environment.

The latest data from the Commodity Futures Trading Commission shows that bearish speculative positioning in the gold market is at its highest level in four years, which has weighed on paper markets.

While institutional investors have fled the gold market, Shah said retail investors are stepping in to buy the physical. He noted that premiums for gold and silver remain extremely high, an indication of a tight physical market.

"The physical market is providing a lot more support to the market than we might actually think," he said. ...
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www.kitco.com

There is a growing divergence between physical gold and the paper market - WisdomTree

Kitco News talks with some of the most influential gold market analysts, economists, investors and mining CEOS to get their take on the industry and financial markets and the global economy
www.kitco.com

I'm curious how the GLD outflows compare to gold eagle sales over the last six months or so.
 
pmbug said:
I'm curious how the GLD outflows compare to gold eagle sales over the last six months or so.
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Anybody can buy and hold physical GAEs. Only recognized partners ( not the term used in the prospectus) can take physical gold from GLD.
Your are thinking about comparing apples to oranges. As they are not the same market.
 
Goldbrix said:
... Your are thinking about comparing apples to oranges. As they are not the same market.
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I'm aware of the difference. I'm interested (as per the OP of the thread) to see how the demand for gold compares - physical vs. paper - with some real data rather than subjective opinions.
 
OldGarandDad said:
Probably people panicking that the UK bond market locked up and that Credit Suisse is going belly up; add in how many companies will crash and burn because they can't get cheap natural gas, or any natural gas at all.

People probably fear that the Euro will become the new Lira or Bolivar.
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I gotta step in here and complain, OGD... You just somehow read my mind. Word for word agree.
 
pmbug said:
BTW, the OP for this thread talks about market data from 2021. Today, sanctions on Russia prevent European nations from buying/importing gold from Russia which apparently was traditionally one of the largest suppliers. So one should logically expect a shortage of physical gold if demand has stayed the same, much less increased, in spite of whatever the paper gold market is signalling.
Click to expand...
Din' know that. No wonder there are lines.

And you just know there are some super-clever people out there laughing at those lines because they are safe with their embossed gold storage certificates.

The paper vs actual myth is clearly imploding. But here's the key: When this rapidly growing disconnect is complete, and the valuation is real gold100% and paper gold 0%... the Wall Street repercussions due to total entanglement in all products and services will define the end of the USD.

It's that Slinky "magic" where the Slinky stays at the same level in the air when dropped... until the contraction reaches 100%. Then it falls immediately to the ground.

Picture this: The top of the Slinky is the pressure of real gold. The bottom is paper gold, holding the low price by the spring action of short/buy/short again/ <-- which works as long as there is room... then it becomes ALL real gold action and the spring means nothing at all anymore.
 
pmbug said:
I'm aware of the difference. I'm interested (as per the OP of the thread) to see how the demand for gold compares - physical vs. paper - with some real data rather than subjective opinions.
Click to expand...
All data can be subjective. As in creating a computer program " Junk IN = Junk OUT".

Remember: The Manipulators are also creating the data. Until it all crashes.
 
You wouldn't know it from watching the spot price...

Retail investors can expect to continue to pay high premiums for physical gold and silver bullion as the precious metals markets deal with global supply issues and unprecedented demand, according to speakers at the London Bullion Market Association Global Precious Metals Conference.

Unprecedented physical demand for gold and silver continued to dominate discussion at the LBMA's annual conference, with panelists expecting global uncertainty to dominate bullion purchases through 2023 and into the first half of 2024. ...
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More (recommended):

www.kitco.com

Premiums for gold and silver bullion aren't dropping any time soon - LBMA

Kitco News' general-interest stories takes a look at what is making headlines in the marketplace and how that is impacting precious metals prices
www.kitco.com
 
pmbug said:
BTW, the OP for this thread talks about market data from 2021. Today, sanctions on Russia prevent European nations from buying/importing gold from Russia which apparently was traditionally one of the largest suppliers. So one should logically expect a shortage of physical gold if demand has stayed the same, much less increased, in spite of whatever the paper gold market is signalling.
Click to expand...
A peek behind the curtain on what has been happening with Russian gold in the wake of sanctions:
Russia's central bank sees no need in raising gold holdings in its gold and forex reserves, its deputy governor, Alexei Zabotkin said on Tuesday, shrugging off a plea from the gold miners to increase state purchases amid Western sanctions.

The association of the Russian gold producers told a meeting of officials at Russia's upper house of the parliament on Tuesday that the government should support the industry with purchases amid sanctions on the Russian banks and disrupted exports.
...
Sergei Kashuba, the head of Russia's Gold Industrialists' Union, told the meeting that the central bank's purchases in spring were carried out with a 12-15% price discount to the London gold prices.

Western sanctions, imposed shortly after Moscow sent its troops to Ukraine on Feb. 24, froze around half of Russia's gold and forex reserves. The sanctions also hit the country's main banks which used to be the main buyers of the miners' gold.

In a further blow, the London Bullion Market Association suspended Russian gold refineries from its "good delivery" lists.

"After that no one wanted our bullion outside Russia ... Third-party countries took the advantage of the situation and started asking for discounts... even more of what the central bank was asking for," an official at the finance ministry, Yuliya Goncharenko, told the meeting.
...
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You would think that such a blow to global physical supply would have some impact on the paper markets.
 
pmbug said:
View attachment 2054


Gold Demand Trends Q3 2022

www.gold.org www.gold.org
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The LBMA claims Strength of the US Dollar. They omit compared only to other fiat currencies. Review gold and silver prices in markets other than usds. Gold, Silver and commodities are all higher in local currencies. Only the manipulation practices of JPM (Proxy for US Treasury) COMEX, LBMA and a fewer ( Lesser) TBTFBs such as Credit Suisse ( cracking too). Are hanging by their fingernails. Which will fail them in time.
"Strength of the US Dollar" - means The last/fattest pig in the slaughterhouse.
OBTW: the number your articles discuss were YoY. This third Qu has met and beat all those previous years going back to 1967 with another Qu to go..
 
Follow up to the LBMA/Russian gold tangent:
The London Bullion Market Association (LBMA) is creating a database of Russian gold bars held by banks in London to help prevent sanctions evasion by Russian companies or the Russian central bank, the industry group said.

Banks and the LBMA are reluctant to say how much Russian gold is held in vaults but disclosures by gold-owning investment funds show that hundreds of tonnes accumulated in London, Zurich and New York before Russia invaded Ukraine in February.

Numbers from eleven funds show around 7% of all the gold they hold – currently around 160 tonnes worth some $9 billion – is Russian.

The LBMA will make its data available to customs authorities and market participants – but not the public – to help them check that Russian gold bars moving between countries or owners were outside Russia before sanctions were imposed.

It said it had an interim database up and running but was working on improving access and simplifying maintenance.
...
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London gold body creates database of Russian bullion bars

LONDON — The London Bullion Market Association (LBMA) is creating a database of Russian gold bars held by banks in London to help prevent sanctions evasion by Russi…
financialpost.com financialpost.com
 
LONDON, Dec 21 (Reuters) - Gold worth $2.2 billion has left the accounts of exchange-traded funds (ETFs) since July as some banks and asset managers seek to purge Russian bullion from investor holdings, according to Reuters calculations based on publicly available data.
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In an analysis about investors shunning Russian gold, Reuters examined lists of gold bars owned by eleven large funds.

Around July 12, these funds between them held 2,540 tonnes of gold. By late November, that total had fallen 10% to 2,295 tonnes. The eleven funds account for two-thirds of all the gold held by ETFs globally.

In July, all eleven held Russian metal.

By late November, the proportion of Russian gold in the stockpiles of eight had fallen. In five funds, the amount of Russian gold tumbled by more than 40%. Two of these got rid of Russian gold altogether.

In three funds, the proportion of Russian gold in their holdings rose slightly.

The gold owned by ETFs is managed by banks, which can give the funds any gold eligible to trade in London, including Russian metal manufactured before the war in Ukraine.

Funds can ask for gold of a particular type or origin to be prioritised, but banks are not typically obliged to do this.
...
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www.reuters.com

Russian gold taken out of exchange-traded fund stockpiles

Gold worth $2.2 billion has left the accounts of exchange-traded funds (ETFs) since July as some banks and asset managers seek to purge Russian bullion from investor holdings, according to Reuters calculations based on publicly available data.
www.reuters.com www.reuters.com

Edit: more on the same topic here:

...
Two sources at exchange traded funds (ETFs) with hundreds of tonnes of gold said they would like to divest from metal originating in Russia. One said he had asked the bank paid to store his fund's gold to allocate as little Russian metal as possible to it.

ETFs are among the biggest holders of bullion and many list publicly the bars they own. This means investors can see whether they have Russian gold as each bar is stamped with its origin.

"Some clients click on the bar list, see a lot of Russia and they are like, 'Whoa, what's going on?'," one source said.

"Explaining it to them is difficult. We want to make the barriers to entry (to the fund) as low as possible and anything that would make them doubt that this is the right product we try to eliminate," the source added.
...
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The amount of metal held in gold-backed exchange-traded funds (ETFs) dropped by 110 tonnes in 2022, according to the World Gold Council.

Holdings in these financial instruments dropped 3% year on year, the organisation said on Monday. This amounted to $3 billion worth of metal.

The WGC said the decline reflected "an interesting year for gold ETFs, in which demand surged during the first four months – as geopolitical risk took centre-stage – before steadily giving back these gains as aggressive rate hikes dominated the narrative."

At the end of 2022, global gold ETFs held 3,473 tonnes of metal. Total assets under management were worth $203 billion.

Holdings fell for their eighth successive month in December, the WGC said. However, it added that the pace of outflows continued to slow, with total holdings falling by four tonnes (or $534 million in value).
...
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More:

www.forbes.com

Gold ETFs Recorded Outflows Of 110 Tonnes In 2022 - World Gold Council

Total holdings stood at 3,473 tonnes at the end of last year.
www.forbes.com www.forbes.com
 
Goldbrix said:
I never understood cryptos but I notice the only safe security wise way to obtain it was to mine it yourself. At the time it wasn't cost effective.
To buy any crypto from another I saw as a Fool's Errand.
So as one of our Lost Leaders at the former camp would say " If you don't hold it, You don't own it" - Ponce (RIP).
Click to expand...
I don't think crypto is the way to go either, and for many reasons.
However, the reason I've registered here, and am answering your post, Goldbrix, is that you've mentioned a past friend of mine, Ponce, who I spoke with often, and learned so much from, but became disconnected to over the years.
This evening I decided to look him up, after around seventeen years, hoping that he'd still be doing, at least, one forum, but, here, I sadly find that he's no longer with us. He was a great guy who I spent hours reading and typing to, back in the day. I'd be grateful if you could enlighten me about his demise?
Thank you.
 
zeitsuss said:
I don't think crypto is the way to go either, and for many reasons.
However, the reason I've registered here, and am answering your post, Goldbrix, is that you've mentioned a past friend of mine, Ponce, who I spoke with often, and learned so much from, but became disconnected to over the years.
This evening I decided to look him up, after around seventeen years, hoping that he'd still be doing, at least, one forum, but, here, I sadly find that he's no longer with us. He was a great guy who I spent hours reading and typing to, back in the day. I'd be grateful if you could enlighten me about his demise?
Thank you.
Click to expand...

See post #1,018 in the gim refugee thread:

https://www.pmbug.com/threads/gim2-refugees.4016/post-59477
 
All I know is he was a GIM2 and one day he was gone. Some member that was closer may have posted more about him at the time. He may have been having medical issues. IDK
I enjoyed reading him too. A Sad loss none the less.
RIP Ponce
FYI GIM2 is still up at this time you may want to see what may still be there about PONCE.
 
Global gold-backed exchange-traded funds continued to struggle in January even as the precious metal saw its best start to the year in a decade, with prices rising more than 6%, according to monthly data from the World Gold Council.

This is the ninth consecutive month gold investors have liquidated their ETF holdings.

Thursday, the WGC said 26 tonnes of gold, valued at $1.6 billion, flowed out of ETFs last month. The report said outflows in Europe and Asia outweighed inflows into North American funds. January bucked the trend seen through most of 2022; last year, North American funds saw the biggest outflows.

"North American funds likely benefited from gold's strong price performance as the dollar weakened and interest rates stabilized," the analysts said.

The analysts said that North American-based ETF saw inflows of 9 tonnes, valued at $572 million; however, this was dwarfed by the liquidation seen in Europe as those funds saw their gold holdings drop by 33 tonnes, valued at $2.1 billion.
...
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www.kitco.com

Gold ETFs see the ninth straight month of outflows, but the trend is reversing - World Gold Council

Kitco News' general-interest stories takes a look at what is making headlines in the marketplace and how that is impacting precious metals prices
www.kitco.com
 

Exclusive: From Russia with gold - UAE cashes in as sanctions bite​

May 25, 20231:07 AM EDTUpdated 4 hours ago

LONDON, May 25 (Reuters) - The United Arab Emirates has become a key trade hub for Russian gold since Western sanctions over Ukraine cut Russia's more traditional export routes, Russian customs records show.

The records, which contain details of nearly a thousand gold shipments in the year since the Ukraine war started, show the Gulf state imported 75.7 tonnes of Russian gold worth $4.3 billion - up from just 1.3 tonnes during 2021.

More here:

www.reuters.com

Exclusive: From Russia with gold - UAE cashes in as sanctions bite

The United Arab Emirates has become a key trade hub for Russian gold since Western sanctions over Ukraine cut Russia's more traditional export routes, Russian customs records show.
www.reuters.com www.reuters.com
 
The World Gold Council (WGC) has tapped former UK Deputy Prime Minister Dominic Raab to investigate Russia’s global ‘blood gold’ trade, which is generating billions in funding for the country’s ongoing war against Ukraine, according to a Telegraph report.

The WGC said Russian-led smuggling efforts in Africa are successfully circumventing Western sanctions even as they suppress smaller gold miners.

“The targeting of artisanal gold miners by mercenaries, terrorists and organised crime has inflicted the most appalling suffering,” Raab told the newspaper. “Meanwhile, the illicit gold plundered is funding war, terrorist groups and organised crime.”

Raab’s investigation is intended to produce recommendations on how to address the problem, such as the introduction of new industry supply chain standards and better enforcement of sanctions.
...
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More:

 
* bump *

A drop in gold prices this month has drawn in buyers of the metal who had been waiting for the market's lightning rally this year to subside, industry players and analysts said.
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"Physical demand has picked up quite a bit since October and especially after the sharp November price drop as there has been a change in the market sentiment," Robin Kolvenbach, co-CEO of Swiss-based refinery Argor-Heraeus, told Reuters.
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"Demand has increased quite a bit for the minted products, which are predominantly for private investors, but we also have seen an increase in production requests for physical gold from institutional investors," Kolvenbach added.
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More:
 
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