Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
US Coronavirus Pandemic Final Catastrophe 2021 - 15th Jan 21
The World’s Next Great Onshore Oil Discovery Could Be Here - 15th Jan 21
UK Coronavirus Final Pandemic Catastrophe 2021 - 14th Jan 21
Here's Why Blind Contrarianism Investing Failed in 2020 - 14th Jan 21
US Yield Curve Relentlessly Steepens, Whilst Gold Price Builds a Handle - 14th Jan 21
NEW UK MOT Extensions or has my Car Plate Been Cloned? - 14th Jan 21
How to Save Money While Decorating Your First House - 14th Jan 21
Car Number Plate Cloned Detective Work - PY16 JXV - 14th Jan 21
Big Oil Missed This, Now It Could Be Worth Billions - 14th Jan 21
Are you a Forex trader who needs a bank account? We have the solution! - 14th Jan 21
Finetero Review – Accurate and Efficient Stock Trading Services? - 14th Jan 21
Gold Price Big Picture Trend Forecast 2021 - 13th Jan 21
Are Covid Lockdowns Bullish or Bearish for Stocks? FTSE 100 in Focus - 13th Jan 21
CONgress "Insurrection" Is Just the Latest False Flag Event from the Globalists - 13th Jan 21
Reflation Trade Heating Up - 13th Jan 21
The Most Important Oil Find Of The Next Decade Could Be Here - 13th Jan 21
Work From Home £10,000 Office Tour – Workspace + Desk Setup 2021 Top Tips - 12th Jan 21
Collect a Bitcoin Dividend Without Owning the King of Cryptos - 12th Jan 21
The BAN Hotlist trade setups show incredible success at the start of 2021, learn how you can too! - 12th Jan 21
Stocks, Bitcoin, Gold – How Much Are They Worth? - 12th Jan 21
SPX Short-term Top Imminent - 12th Jan 21
Is This The Most Exciting Oil Play Of 2021? - 12th Jan 21
Why 2021 Will Be the Year Self-Driving Cars Go Mainstream - 11th Jan 21
Gold Began 2021 With a Bang, Only to Plunge - 11th Jan 21
How to Test Your GPU Temperatures - Running Too Hot - GTX 1650 - Overclockers UK - 11th Jan 21
Life Lesson - The Early Bird Catches the Worm - 11th Jan 21
Precious Metals rally early in 2021 - 11th Jan 21
The Most Exciting Oil Stock For 2021 - 11th Jan 21
Financial Market Forecasts 2021: Navigation in Uncharted Waters - 10th Jan 21
An Urgent Message to All Conservatives, Right-Wingers and Patriots - 10th Jan 21
Despite Signs to the Contrary, Gold Price at or Near Top - 10th Jan 21 -
Ultimate Guide On The 6 Basic Types Of Index Funds - 10th Jan 21
Getting Vaccinated at TESCO - Covid-19 Vaccinations at UK Supermarket Pharmacies and Chemists - 10th Jan 21
Cheers for the 2021 Stock Market and These "Great Expectations" - 9th Jan 21
How to Plan Your Child With Better Education - 9th Jan 21
How To Find The Best Casino - 9th Jan 21
Gold Is Still a Bargain Buy - 8th Jan 20
Gold Price Set to Soar as Hyperinflation Looms - 8th Jan 21
Have Big Dreams? Here's How to Pay for Them - 8th Jan 21
Will the Fed Support Gold Prices in 2021? - 8th Jan 21
Stocks trading strategies for beginners - 8th Jan 21
Who is Buying and Selling Stocks in 2021 - 8th Jan 21
Clap for NHS Heroes 2021 as Incompetent Government Loses Control of Virus Again! - 8th Jan 21
Ultimate Gaming and Home Working PC System Build 2021 - 5950X, RTX 3080, Asus MB - Scan Computers UK - 7th Jan 21
Inflation the bug-bear looking forward through 2021 - 7th Jan 21
ESG ETF Investing Flows Drive Clean Energy to Fresh Highs - 7th Jan 21
5 Financial Market Surprises in 2021 - 7th Jan 21
Time to ‘Reset’ Your Investment Portfolio in 2021? - 7th Jan 21
Bitcoin Price Collapses almost 20% at the start 2021 - 7th Jan 21
Fed Taper Nervous Breakdown - 6th Jan 21
What Will the U.S. Dollar Ring in for 2021? - 6th Jan 21
Stock market frenzy- Ride the bandwagon but be sure to take along some gold coins - 6th Jan 21
Overclockers UK Custom Build Gaming System Review Heat Test and Final Conclusion - 6th Jan 21
Precious Metals Resuming Bull Market, Gold, Silver, GDX Trend Forecasts 2021 - 5th Jan 21
Trump’s Iran-COVID-Gate Anniversary  - 5th Jan 21
2021 May Be A Good Year For The Cannabis / Marijuana Sector - 5th Jan 21
Stock Market Approaching an Important Target - 5th Jan 21
Consumer Prices Are Not Reflecting Higher Inflation; Neither Is The CRB - 5th Jan 21
NEW UK Coronavirus PANIC FULL Lockdown Imminent, All Schools to Close! GCSE Exams Cancelled! - 4th Jan 21
The Year the World Fell Down the Rabbit Hole - 4th Jan 21
A Year Like No Other for Precious Metals… and Everything Else - 4th Jan 21
The Stocks Bull Market is Only Half Completed - 4th Jan 21
An In- Depth Look At Gold Price Trend - 4th Jan 21
Building America Back After a Dark Covid Winter - 4th Jan 21
America's Dark Covid Winter Ahead - 4th Jan 21
Buy a Landrover Discovery Sport in 2021? 3 Year Driving Review - 3rd Jan 21
Stock Market Major Peak in Early April 2021 - 3rd Jan 21
Travel and Holidays 2021 - Flight Knight Cabin Bag Review - 3rd Jan 21
�� Happy New Year 2021 Fireworks and Drone Light Show from London and Sheffied - BBC�� - 2nd Jan 2
The Next IMMINENT Global Catastrophe After Coronavirus - 1st Jan 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

The Gold Chart That Has Central Banks Extremely Worried

Commodities / Gold and Silver 2016 May 20, 2016 - 07:17 PM GMT

By: Steve_St_Angelo

Commodities

This gold chart should have Central Banks extremely worried.  Why?  Because the change in physical gold and Central Bank demand since the first crash of the U.S. and global markets in 2008 is literally off the charts.

I advise precious metals investors not to focus on the short-term gold price movement, rather they should concentrate on the long-term trend changes.  This is where the ultimate payoff will be by investing in gold.   Now, I say “INVESTING”, in gold because that is what we are doing.


Many analysts such as Jim Rickards don’t believe that gold is an investment.  Mr. Rickards looks at gold as money or insurance on the collapse of the U.S. Dollar and fiat monetary system.  However, I look at gold as an investment due to the collapse of U.S. and World energy production.

While I have been a broken record on this, many investors still don’t understand what I am trying to get across here.  Gold and silver are more than money today because of the 40+ year funneling of investors funds away from REAL ASSETS and into PAPER CLAIMS on future economic activity.  Thus, 99% of investors have sent their money into the largest Ponzi Scheme in history.

Jim Rickards fails to understand this principle because he doesn’t’ factor in energy into the equation.  I find most precious metals analysts do the same thing as they forecast the future gold price based on how much fiat currency (or money supply) is outstanding.

Folks…. it won’t matter how much money is floating around in the future as energy production plummets.  Who cares if there are trillions of M2 or M3 outstanding, when we won’t have the energy to continue running a system that only can function by a growing energy supply.  To base the future value of gold on outstanding currency is FOLLY.

Which is precisely why I label gold and silver as INVESTMENTS.  Their values will surge as most paper and physical asset values collapse.  The revaluation of gold and silver will occur well beyond the collapse of fiat money… they will also rise in value due to the disintegration of most physical and paper assets.  This is well beyond the scope of money or insurance.

The Gold Chart That Has Central Banks Extremely Worried

A2A-TFmetals-SRSrocco-May-19-2016Before I get into the details of this gold chart, I would like to let my readers and followers know about my recent interview on TFmetals Report.  I sat down with Mr Ferguson (Craig) and discussed a lot of the Gold Market in a live webinar with many of his subscribers.  He has now made the interview public:

You can either click on the image and go to the TFmetals Report website and listen to the interview, or you can click on the link below:

TFmetals Report A2A With Stephen St. Angelo Of The SRSrocco Report

Okay, here is the gold chart that Central Banks should be worried about:

World-Physical-Gold-&-Central-Bank-Demand

This chart represents the change of physical Gold Bar & Coin demand including Central Bank net purchases.  Before the first collapse of the U.S. and Global markets in 2008, Central Banks dumped approximately 3,956 metric tons (mt) of gold on the market.  I have figures for 2002-2015 from the World Gold Council, but I estimated a total of 800 mt for 2000 and 2001.  This is based on data from the chart in the article, Germany Stops Selling Gold, Eurozone Sales Fall To Zero.

If we subtract the Central Bank dumping of 3,956 mt of gold from total Gold Bar & Coin demand of 2,776 mt, we get a net negative 1,180 mt during the 2000-2007 period.  Thus, Central Bank sales added 1,180 mt more gold supply than was consumed by investor physical gold purchases.

NOTE:  These figures do not include Gold ETF or similar product demand.  I decided to exclude this data as it is impossible to know if the gold held by these Electronic Traded Funds or similar products is not oversubscribed to one or more owners.  We know that when someone purchases either physical Bar & Coin or Central Bank gold.. there is more of a guarantee that this gold is likely unencumbered.

However, this situation changed drastically since 2008.  Even though Central Banks still sold 235 mt of gold in 2008 and 34 mt in 2009, this changed to net purchases in 2009.  If we add up all Central Bank gold sales and purchases from 2008 to 2015, it turned out to be 2,657 mt. 

While this was a big change from Central Bank net sales of 3,956 mt (2000-2007), the real winner was the increase of Gold Bar & Coin demand.  Gold Bar & Coin demand surged to 9,461 mt from 2008-2015 versus 2,657 mt during 2000-2007.  Thus, physical gold investment and Central Bank demand totaled a whopping 12,118 mt from 2008-2015.  This equals a massive 390 million oz (Moz) for total physical gold and Central Bank demand since 2008 compared to a net supply of 38 Moz in the first period.

Investors need to really take a good look at the chart.  What a change in demand from 38 Moz of net supply from 2000-2007 versus net demand of 390 Moz during the 2008-2015 period.  To get more understanding of the changing gold trends, I discuss this in my interview on TFmetals Report which I highly recommend listening to at the link above.

Lastly, now that Mainstream investors piled into Gold ETF’s during the first quarter of 2016, this could really upset the market going forward.  Currently, Gold Bar & Coin demand and Central Bank purchases are averaging about 1,600 mt annually for the past several years.  This could easily jump to 2,000 mt once the U.S. and global stock markets start to crash as investors move into the SAFETY TRADE (of gold).

If western Gold ETF demand really starts to surge, this could cause serious trouble for Central Banks as availability of gold supply tightens.  Global Gold ETF demand hit a high of 645 mt in 2009 as the U.S. and world stock markets crashed to their lows.  However, we already saw a huge 364 mt inflow of Gold ETF’s during the first quarter of 2016… and the DOW ONLY FELL 2,000 points.  What happens when the market really tanks??

If Gold ETF demand jumps to 1,000 mt along with Gold Bar-Coin demand and Central bank purchases totaling 2,000 mt, this would equal 3,000 mt or nearly 75% of total supply. 

At some point, demand for gold will overwhelm supply causing the price to skyrocket.  This isn’t a matter of if, but a matter of when.  So, the more Central Banks screw around with monetary policy and as the broader stock markets continue their collapse, the closer we are to seeing record gold prices.

Lastly, if you haven’t checked out our new PRECIOUS METALS INVESTING page, I highly recommend you do.

Please check back for updates at the SRSrocco Report and you can also follow us at Twitter:

SRSroccoReport Twitter Button

2016 Copyright Steve St .Angelo - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules