Michael Lombardi: I have said it many times: central banks will be the major drivers of gold bullion prices going forward. Countries like China and Russia will need more of the yellow metal, because they simply don’t have enough in their reserves compared to the United States, France, Germany, or Italy (the four central banks with the biggest gold bullion reserves).
A news story that ran last week in the Shanghai Daily said the People’s Bank of China is expected to announce it has more than doubled its gold bullion reserves—from 1,054 tons to 2,710 tons. The article explained that China’s central bank bought about the same amount of gold in 2013 that it did during the years from 2009 through to 2011 combined! (Source: Shanghai Daily, January 17, 2014.)
Yes, I hear the stories of how gold prices are being manipulated. But how long can the manipulation—if it really does exist—go on in light of such aggressive gold buying from central banks like China’s?
In 2013, the Bundesbank, the central bank of Germany, said it would like to bring half of its gold bullion stored at the central bank of France and the U.S. Federal Reserve back to Germany. This amounts to 674 tons. But Germany was told it would take seven years to get the gold back to Germany!
In 2013, only 37 tons of the gold bullion came back to the Bundesbank: five tons came from the Federal Reserve and the rest came from France. (Source: Kitco News, January 20, 2014.) So where’s the gold? If the Bundesbank is bringing back only five percent of its gold each year, it’s going to take 20 years for the country to get back its 674 tons of gold bullion…forget the seven years promised!(...)Click here to continue reading the original ETFDailyNews.com article: Massive Shock Coming To The Gold Market [SPDR Gold Trust (ETF), iShares Silver Trust (ETF)]You are viewing an abbreviated republication of ETF Daily News content. You can find full ETF Daily News articles on (www.etfdailynews.com)
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